JU 


TREATISE 


ON   THE 


LAW    or    PARTNERSHIP. 


BY 


THEOPHILUS  PARSONS,  LL.D. 

Ill 

DANE    PROFESSOU   OF    LAW    IN    HAKVAKD    UNIVERSITY,    AT    CAMBRIDGE. 


FOURTH  EDITION,  REVISED  AND  ENLARGED, 
BY 

JOSEPH   HENRY   BEALE,  Jr. 

ASSISTANT  PROFESSOR   OF   LAW   IN   HARVARD   UNIVERSITY. 


BOSTON: 
LITTLE,   BROWN,    AND  COMPANY. 

1893. 


T 


Entered  according  to  Act  of  Congress,  in  the  year  1866,  by 

Theophilus  Parsons, 

in  the  Clerk's  OflSce  of  the  District  Court  of  the  District  of  Massachusetts. 


Entered  according  to  Act  of  Congress,  in  the  year  1870,  by 

Theophilus  Parsons, 

in  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


Entered  according  to  Act  of  Congress,  in  the  year  1878,  by 

Theophilus  Parsons, 
in  the  Office  of  the  Librarian  of  Congress,  at  Washington. 


Entered  according  to  Act  of  Congress,  in  the  year  1893,  by 

David  L.  Webster,  Francis  A.  Dewson,  and  Charles  M.  Reed,  Trustees, 

in  the  Office  of  the  Librarian  of  Congress,  at  Washington. 


TTniversitt  Press: 
John  Wilson  and  Son,  Cambridge,  U.  S.  A. 


3^ 

a 

u. 


PREFACE 

TO   THE  LAW  OF  PARTXERSHIP. 


I  HAVE  followed  the  same  plan  in  this  as  in  my  former 
works,  judging  from  the  favor  they  meet  with  and  all 
I  can  learn  about  them  that  it  is  satisfactory  to  the 
profession. 

It  may  be  briefly  described  thus :  In  the  text,  I  state 
the  law  as  clearly  and  succinctly  as  I  can,  enlarging  upon 
the  reasons  and  principles  involved  "when  I  treat  of  ques- 
tions more  than  usually  important,  difficult,  or  uncertain. 
In  the  notes,  I  give  all  that  the  complete  library  of  this 
Law  School  could  supply  me  with,  of  authorities  needed 
to  verify  the  law  as  stated,  or  exhibit  the  qualifications  or 
modifications  to  which  it  is  subject,  and  enable  an  inquirer, 
with  a  library  at  command,  to  make  a  thorough  investiga- 
tion of  any  question.  The  great  and  still  growing 
increase  in  the  number  of  reports  makes  it  very  difficult 
for  any  individual  to  have  a  full  collection  of  them ;  and . 
leads  me  to  believe  that  a  work  intended,  on  the  one  hand, 
to  supply  on  its  specific  subjects  the  want  of  a  library 
so  far  as  any  single  work  can  hope  to  do  this,  and,  on  the 
other,  to  facilitate  the  use  of  a  complete  library  for  those 
who  have  access  to  one,  will  be  found  useful  to  students 
and  practitioners. 


735706 


iv  PREFACE. 

This  work  has  been  long  in  hand,  and  would  have  been 
published  some  years  ago,  had  I  not  thought,  with  my 
publishers,  that  it  was  better  to  wait  for  peace.  I  shall 
not  regret  this  delay,  if  it  has  enabled  me,  by  additional 
labor  and  the  use  of  recent  authorities,  to  offer  it  in  a  less 
defective  condition  to  the  profession,  whose  kind  reception 
of  my  other  works  gives  me  so  much  cause  for  gratitude. 

T.  P. 

Cambridge,  1867. 


PREFACE 

TO   THE   FOURTH   EDITION. 


Ix  preparing  a  fourth  edition  of  this  work,  two  things 
have  been  kept  in  mind :  first,  to  bring  the  work  down  to 
date  not  only  in  the  citation  of  authorities,  but  also  in  the 
statement  of  principles  ;  second,  to  keep  the  work  within 
the  limits  of  a  single  easily-handled  volume.  In  collecting 
new  authorities  the  editor  has  attempted  to  give  as  many 
as  possible  of  the  English  and  American  cases  decided 
since  the  publication  of  the  last  edition,  and  to  add  such 
earlier  authorities  as  would  establish  or  illustrate  the 
statements  of  principle  added  in  this  edition.  Some  such 
statements,  which  seemed  necessary  to  a  complete  pres- 
entation of  the  subject,  have  been  inserted  in  the  text 
or  added  in  the  form  of  notes.  The  recent  development 
in  importance  of  new  forms  of  business  combination 
seemed  to  call  for  a  brief  statement  of  the  principles 
governing  such  combinations,  and  a  chapter  has  accord- 
ingly been  added  upon  that  subject. 

The  important  change  in  the  conception  of  a  partner- 
ship held  by  many  legal  minds,  which  was  caused  by  the 
decision  of  the  House  of  Lords  in  the  case  of  Cox  v. 
Hickman, — a  change,  the  full  significance  of  which  is  even 
yet  scarcely  apprehended,  —  made  it  necessary  to  rewrite 
the  first  and  fifth  chapters  of  this  work.  Much  of  the 
discussion  in  them  was  rendered  unnecessary,  and  has 
been  omitted ;    and  the  mercantile  conception  of  a  partner- 


Vi  PREFACE. 

ship,  which  seems  in  consequence  of  that  decision  to  have 
become  the  legal  conception  also,  has  been  carefully  ex- 
plained. A  comparison  with  the  earlier  editions  will  show 
with  what  sagacious  legal  insight  the  author  himself 
arrived  at  what  we  must  think  very  nearly  the  true 
conception  of  a  partnership  at  a  time  when  it  had  little 
recognition  from  bench  or  bar.  Great  acknowledgment  is 
due  to  Prof.  J.  B.  Ames,  to  whom"  more  than  to  any  one 
in  this  country  we  owe  the  acceptance  of  the  doctrine. 

With  a  view  to  prevent  an  increase  of  bulk,  all  that 
seemed  unnecessary  or  obsolete  in  the  last  edition,  both 
in  the  text  and  in  the  notes,  has  been  omitted.  Nothing 
pertinent  to  the  subject,  however,  has  been  stricken  out 
unless  it  was  a  restatement  of  matter  found  elsewhere  in 
the  work.  Many  notes  have  been  materially  shortened 
by  compressing  statements  of  cases  contained  in  them. 

That  the  book  might  be  more  conveniently  consulted, 
it  has  been  divided  into  sections,  and  it  has  therefore  been 
necessary  to  abandon  the  original  paging.  The  index  has 
been  entirely  rewritten  and  much  enlarged,  and  no  diffi- 
culty, it  is  hoped,  will  be  experienced  in  finding  a 
reference  to  an  earlier  edition.  An  appendix  of  Forms  of 
Articles  of  Copartnership  has  been  annexed,  as  useful  to 
the  practitioner. 

All  matter  added  to  the  text  and  to  the  author's  notes 
has  been  enclosed  in  brackets.  The  editor's  notes  are 
distinguished  by  being  numbered. 

J.  H.  BEALE,  Jr. 

Cambridge,  September  1,  1893. 


CONTENTS. 


PAGE 

Table  of  Cases xi 

CHAPTER  I. 
Definition  and  Nature  of  a  Partnership 1 

CHAPTER  11. 
How  Partnership  may  be  made 5 

CHAPTER  III. 
Of  Partners 15 

CHAPTER  IV. 
Of  the  Purposes  and  Kinds  of  Partnership 34 

CHAPTER  V. 
Who  are  Partners 39 

CHAPTER  VI. 
Who  are  liable  as  Partners  as  to  Third  Parties  ....       72 


CHAPTER  VII. 

Of   the   Rights    and   Duties    of   Partners   between   Them 

selves     

Sec.      I.  Rights  and  powers  of  a  partner 

Sec.  II,  Extent  of  the  power  of  a  single  partner  .  . 
Sec.  III.  Power  of  one  partner  to  issue  negotiable  paper 
Sec.  IV.  Of  the  power  of  a  majorit}-  of  the  partners  . 
Sec.  V.  Of  the  dut}^  of  partners  toward  each  other  . 
Sec.  VI.  Interpretation  of  partnership  agreement  .  . 
Sec.  VII.  Of  the  rights  of  property-  of  the  partners  inter  se 


127 
127 

140 

lfi7 
1«7 
102 
20.5 
229 


viii  CONTENTS. 

CHAPTER  VIII. 

Of  the  Remedies  of  Partners  inter  se   .......    .     246 

Sec.      I.  General  considerations 246 

Sec.  II.  Questions  between  partners  cognizable  at  law  .  .  251 
Sec.  hi.  Questions    between    partners   cognizable   only   in 

equity 269 

Sec.  IV.  On  the  methods  and  processes  of  equity  applicable 

in  cases  of  partnership 278 

CHAPTER  IX. 

Of  Remedies  by  Partners  against  Third  Parties     •     .     .    .     307 

CHAPTER  X. 

Of  the   Remedies   of  Third   Persons  against  the  Partner- 
ship AND  against  Partners 324   ^ 

CHAPTER  XI. 
Of  the  Real  Estate  of  a  Partnership 348 

CHAPTER  XII. 
Of  Dissolution 370 

CHAPTER  XIII. 

Of  a  Change  in  the  Partnership 398 

Sec.      I.  Of  the  effect  of  any  change  in  the  partnership    .     .  398 

Sec.    II.  Of  a  retiring  partner 400 

Sec.  III.  Of  an  incoming  partner 426 

Sec.   IV.  Of  the  death  of  a  partner 431 

CHAPTER  XIV. 
Of  Dissolution  by  Decree 454   / 

CHAPTER  XV. 

Of  Bankruptcy  and  Insolvency 463 

Sec.      I.  When  and  how  a  bankruptcy  dissolves  a  partner- 
ship  463 

Sec.    II.  Of  the  effect  of  the  bankruptcy  of  a  partner  upon 

solvent  partners 465 

Sec.  III.  How  the  funds  are  appropriated  to  the  debts  .  .  475 
Sec.   IV.  What  debts  or  funds  are  joint,   and  what  are 

several 481 


CONTENTS.  IX 

CHAPTER  XVI. 

Of  an  Account 505 

Sec.      I.  When  an  account  will  be  ordered 505 

Sec.    II.  Of  opening  an  account  for  error 511 

Sec.  III.  How  an  account  should  be  taken 517 

CHAPTER  XVII. 

Of  Limited  Partnerships 532 

CHAPTER   XVIII. 

Of  Joint-stock  Companies 549 

CHAPTER  XIX. 

Business  Combinations  and  "  Trusts  " 557 


Appendix  of  Eorms 569 


Index = .     579 


TABLE   OF   CASES. 


References  are  to  pages. 


A. 

Aas  V.  Benham  (1891,  2  Ch.  244) 
Abat  V.  Penny  (19  La.  Ann.  289) 
Abbot  V.  Bayley  (6  Pick.  89) 

V.  Smith  (2  W.  Bl.  947)         254, 

276, 
Abbott  V.  Jackson  (43  Ark.  212) 

('.  Jolinson  C62  N.  H.  9) 

V.  Omaha  Smelting  Co.  (4  Neb. 

416) 
Abbott's  Appeal  (50  Pa.  234) 
Abel  V.  Forgue  ( 1  Root  502) 
V.  Sutton  (3  Esp.  108)  381,  382, 


Abell,  Ex  parte  (4  Ves.  837)  478, 

V.  Phillips  (13  S.  W.  109) 

Abernathy  v.  Moses  (73  Ala.  381 

363, 
Abpt  V.  Miller  (5  Jones  .32)  172, 

Abrahams  v.  Myers  (40  Md.  499) 
Ackerman,  Ex  />arte  (14  Ves.  604) 
Ackley  v.  Staehlin  (56  Mo.  558)      98, 
Adam,  Ex  parte  (2  Rose  36,  1  Ves.  & 
B.  493)  21,  488, 

Adams,  Ex  parte  (  1  Rose  305)     474, 

V.  Adams  (7  Abb.  N.  C.  292) 

V.  Bankart  (1  C.  M.  &  R.  685) 

V.  Carroll  (85  Pa.  209) 

';.  Carter  (53  Ga.  160) 

V.  Eatherly   Hardware    Co.   (78 

Ga,  485,  3  S.  E.  480) 

V.  May  (27  F.  U.  907) 

V.  Morrison  (113  N.  Y.   152,  20 

N.  E.  829) 
r.  Thornton  (82  Ala.  260,  3  So. 

20)  134, 

V.  Warren  (11  So.  754) 

Adams  Bank  v.  Rice  (2  All.  480) 
Adamson,  Ex  parte  (8  Ch.  D.  807) 
Addams  i;.  Tutton  (39  Pa.  447)     259, 
Adderly  v.  Dixon  (1  Sim.  &  S.  610) 
Addis  t'.  Wright  (2  Mer.  117)        3.30, 
Addison  V.  Overend  (6  T.  R.  766) 
Adee  v.  Cornell  (93  N.  Y.  572) 
Adickes  v.  Lowry  (15  S.  C.  128) 
Aflalo  V.  Fourdrinier  (6  Bing.  309) 
Agace,  Ex  parte  (2  Cox  312)       96,  99, 


198 
399 

23 
267, 
336 

23 
191 

50 
359 
144 
402, 
406 
491 
265 
359, 
364 
173 
159 
479 
100 

496 

497, 
499 
243 
148, 
152 
66 
58 

89 
334 

68 

1.35 
201 
5 
487 
875 
209 
444 
320 
135 
476 
499 
147 


Agawam  Bank  v.  Morris  (4  Gush.  99) 

182,  485 
Agnew  V.  Johnson  (17  Pa.  373)  304 

y.  Piatt  (15  Pick.  417)  468 

Ah  Lep  V.  Gong  Choy  (13  Ore.  205,  9 

Pac.  483)  89 

Airey  v.  Borham  (29  Beav.  620)  530 

Akhurst  v.  Jackson  (1  Swanst.  85,  1 

VVils.  47)  214,  276,  501,  528,  530 

Ala.   Coal  Min.  Co.  v.  Brainard  (35 

Ala.  476)  170 

Alabama  Fertilizer   Co.  v.  Reynolds 

(79  Ala.  497)  8.3,  103,  105 

Albers  i;.  Wilkinson  (6  G.  &  J.  358)  150 
Albretcht  v.  Sussman   (2  Ves.  &  B. 

323)  26,  309 

Alcock  V.  Taylor  (1  Tam.  506)  372,  392 
Alder  v.  Fouracre  (3  Swanst.  489)  288 
Alderson  v.  Pope  (1  Camp.  404)     78,  105, 

164 
Aldrich  v.  Grimes  (10  N.  H.  194)  18 

V.  Lewis  (60  Miss.  229)  249 

Alexander,  Ex  parte  (1  Glyn  &  J.  409)  109 
V.  Alexander  (85  Va.  353, 7  S.  E. 

335)  1.55 

V.  Barker  (2  Cr.  &  J.  133)      143,  272 

316,  317,  498 
V.  Gorman  (15  R.  L  421,  7  Atl. 

243)  478 

V.  Handley  (11  So.  390)  68,  104 

«;.  Heriot  (Bail.  Eq.  223)  18 

V.  Hutcheson  (2  Hawks  535)  19 

V.  Jones  (90  Ala.  474,  7  So.  903)  .309 

('.  Kimbro  (49  Miss.  529)  3-54 

V.  King  (87  Ala.  642,  6  So.  382)     309 

V.  Stern  (41  Tex.  193)  145 

Alexandria  v.  Patten  (4  Cranch  317)   420, 

421 
Alfele  V.  Wright  (17  Ohio  2-38)  138 

Alger  V.  Thacher  (19  Pick.  51)  402 

Alkire  v.  Kahle  (123  111.  496, 17  N.  E. 

693)  352 

AUcott  V.  Strong  (9  Cush.  323)       69,  164, 

422,  425 
Allegheny  Nat.  Bank  v.  Bailey  (147 

Pa.  HI,  23  Atl.  439)  539 

Allegre  v.  Insurance  Co.  (6  H.  &  J. 

413)  219 

Allen,  In  re  (41  Minn.  430,  43  N.  W. 

382)  537,  542 


xu 


TABLE   OF   CASES. 


Allen  V.  Blanchard  (9  Cow.  631)  35 

V.  Gary  (33  La.  Ann.  1455)      98,  186 

V.  Centre  Vale  Co.    (21    Conn. 

130)  327,  332,  339 

t'.  Cheever  (61  N.  H.  32)  152 

V.  Coit  (6  Hill  318)  181,  520 

c.  Davis  (13  Ark.  28)  34,63 

V.  Dunn  (15  Me.  292)  GO,  346 

V.  Farrington  (2  Sneed  626)  144 

f.  Hill  (16Cal.  113)  434 

V.  Kilbre  (4  Madd.  464)  503 

V.  Owens  (2  Speers  170)  164 

r.  Rostain  (11  S.  &  R.  362)  6 

V.  Second  Nat.  Bank  (6  Lea  558)  442 

V.  Wells  (22  Pick.  450]  329,  336,  338 

414,  446,  478 

V.  Whetstone  (35  La.  Ann.  846)    351 

V.  White  (Minor  365)  109,  312 

V.  Withrow  (110  U.  S.  119)  364 

V.  Woonsocket  Co.  (11  R.  I.  288)     27 

AUfrey  v.  Allfrey  (1  McN.  &  G.  87)  514 
Alliance  Bank  v.  Keaseley   (L.  R.  6 

C.  F.  433)  147 

Allison  V.  Ferry  (130  111.  9,  22  N.  E 


492) 


7,349 

332 

445,  452 

339 

11,  130 

45 


Anderson  v.  Pollard  (62  Ga.  46)  445 

V.  Powell  (44  la.  20)  9 

V.  Taylor  (2  Ired.  Eq.  420)    200,  384 

V.  Tompkins  (1  Brock.  4-56)   131, 132, 

133,  134,  135,  153,  154, 367,  508 

f.  Wallace  (2  Moll.  540)  285 

V.  Wanzer  (5  How.  Miss.  587)        164 

'•.  Weston  (6  Bing.  N.  C.  296)       406 

Andrew,  Succession  of  (16  La.  Ann. 
197)  464 

V.  Boughey  (Dyer  75  a)  484 

Andrews,  Ex  parte  (25  Ch.  D.  505)         497 

V.  Brown  (21  Ala.  437)  349,  356,  362, 

366,  367 

V.  Conger  (26  U.  S.  L.  Co-op.  Ed. 

87 

258, 

277 

5 

325 

82 


Alpaugh  V.  Savage  (19  Atl.  380) 
Alsop  V.  Mather  (8  Conn.  584) 
Alter  I'.  Brooke  (9  Fhila.  258) 
Alvord  V.  Smith  (5  Pick.  232) 
Ambler  v.  Bradley  (6  Vt.  119) 

V.  Whipple  (20  Wall.  546)  455 

America,  Bank  of  v.  Shaw  (142  Mass. 

290,  7  N.  E.  779)  187 

American  Bank  v.  Doolittle  (14  Pick. 

126)  143 

American   Bank   Note  Co.  v.  Edson 

(56  Barb.  84)  216 

American  Biscuit  &  Mfg.  Co.  v.  Klotz 

(44  F.  R.  721)  559,  568 

American  Exch.  Bank  v.  Ga.  Const. 

&  Inv.  Co.  (87  Ga.  651,  13  S.  E.  505)     98 
American  Linen  Tliread  Co.  v.  Wor- 

tendyke  (24  N.  Y.  -550)  402 

Ames  V.  Ames  (37  F.  R.  30)  352,  366 

V.  Downing  (1  Brad.  321)      436,  439, 

534,  543 
Amidown  v.  Osgood  (24  Vt.  278)  406,  407, 

408 
Amory  v.  Francis  (16  Mass.  308)  485 

Amoskeag  Mfg.  Co.  v.  Spear  (2  Sandf. 

599)  244 

Amplilett  V.  Hubbard  (29  Mich.  298)    491 
Anderson  v.  Ackerman  (88  Ind.  481)  248. 

433 

V.  Anderson  (25  Beav.  190)  455 

V.  Clav  (1  Stark.  405)  6 

V.  Henshaw  (2  Day  272)  95 

I',  Holmes  (14  S.  C.  162)  418 

V.  Lemon  (8  N.  Y.  236,  4  Sandf. 

552)  196 

V.  Levan  (1  W.  &  S.  334)  69, 76, 93, 107 

V.  Maltbv  (4   Bro.  C.  C.  423,  2 

Ves.  Jr.  244)  489 

V.  Moncrieff  (3  Desaus.  124)  209 

I'.  Norton  (15  Lea  14)  136 


90) 
V.  Ellison  (6  J.  B.  Moo.  199) 


V.  Garstin  (10  C,  B.  n.  s.  444) 

V.  Keith  (34  Ala.  722) 

V.  Lehott  (10  Barr  47) 

V.  Planters'  Bank  (17  Sm.  &  M. 

192)  185 

V.  Schott  (10  Barr  47)  543,  545 

Andriessen's  Ajjpeal  (123  Pa.  303,  16 

Atl.  840)  305 

Angler  v.  Webber  (14  All.  211)  239 

Anon.  (2  Ca.  Ch.  38,  16  Vin.  Abr.  242) 

132,  147,  290 

(12  Mod.  446) 

(W.  Jones  253) 

(Styles  370  a) 

(2  Eq.  Abr.  12) 

(1  Ves.  476) 

(2  Ves.  Sen.  629) 

(1  Madd.  Ch.  525) 

(2  K.  &  J.  441) 


434) 
Ansell 


(Taylor  113) 
(2  Hayw.  99) 
Lay  field   (1 


142,  144,  466 

320 

2,  168 

515 

291 

209,  279 

209 

284 

150 

150 

Salk.   292,    Holt 

2,  142,  163,  185 
Waterhouse  (6  M  &  S.  390)  254, 
267,  268.  269 
Anten  v,  Ellingwood  (51    How.   Pr. 

359)  57 

Anthon  i'.  Fisher  (Doug.  649)  26 

Anthony  v.  Butler  (13  Pet.  423)  150 

Apperly  r.  Page  (1  Phil.  779)  510 

Ai)pleby,  Ex  parte  (2  Deac.  482)  419.  484 
Apsey,  Ex  parte  (3  Bro.  C.  C.  265)  123 
Arbonin,  Ex  parte  (1  De  Gex  359)       488, 

493,  •194 
Arden  v   Sharpe  (2  Esp.  525)        168,  170, 

180 

V.  Tucker  (4  B.  &  Ad  815)  317 

Areall  v.  Smith  (3  Den  435)  547 

Arkwright,  Ex  parte  (3  Mont.  D.  &  D. 

129)  495 

Arlington  v.  Merrick  (2  Saund.  412)  315 
Armsby  v.  Farnam  (16  Pick.  318)        312, 

313,  416 
Armstrong  v.  Armstrong  (2  M.  &  K. 
45)  8 

V.  Fahnestock  (19  Md.  59)  138 

V.  Hussey  (12  S.  &  R.  315)       74,  409 


TABLE   OF   CASES. 


XIU 


Armstrone  )•,  Lewis  (2  C.  &  M.  274)  8,  10 

r.  Kirbinson  (5  (i.  &  J.  412)  14'J 

Arnold  v.  Arnold  (UO  N.  Y.  580)  248 

V.  Brown  (24  Pick.  80)    132,  179,  301, 

392,  4(34 

V.  Camp  (12  .Johns.  400)  417 

V.  Danziger  (30  F.  K.  898)  543 

V.  Hagerman  (45  N.  J.  Eq.  186, 

17  Atl.  03)  332 

Artisans'  Hank  v.  Treadwell  (34  Barb. 

553)  540,  542,  545 

Artman   r.  Ferguson  (73  Mich.  146, 

40N.  W.  907)  24 

Arton  V.  Booth  (4  J.  B.  Moore  192)      142, 

145,  307 
Ash  V.  Guie  (97  Pa.  493)  52 

Ashley  v.  Williams  (17  Ore.  441,  21 

Pac.  550)  508 

Ashton  V.  Robinson  (L.  R.  20  Eq.  25)  354 
Ashuelot  R.  R.  v.  Elliot  (57  N.  H.  307)  203 
Ashworth  v.  Munn  (15  Ch.  D.  363)  360 
Askew  V.  Springer  (HI  111.  602)  201,  300 
Aspinall  v.  London  &  N.  W.  Ry.  (11 

Hare  325)  312,  342,  375,  392 

Aspinwall  v.  Williams  (1  Ohio  38)        12, 

103,  110 
Astle  V.  Wright  (23  Beav.  77)  530 

Astley  V.  Weklon  (2  B.  &  P.  346)  224 
Atchison  u.  Jones  (1  S.  W.  406)  136 

Atchison  Savings  Bank  v.  Templar 

(26  F.  R.  580) 
Atchison,  T.  &  S.  F.  R.  R.  ;;.  Roach 

(35  Kas.  740,  12  Pac.  93) 
Atherton  v.  Tilton  (44  N.  H.  452) 
Atkin  V.  Berry  (1  Lea  01) 
Atkins  f.  Atkins  (Buck  479) 

V.  Hunt  (14  N.  H.  205) 

I,-.  Prescott  (10  N.  H.  120) 

V.  Tredgold  (2  B.  &  C.  23)    156,  157, 

159,  448 
Atkinson  v.  Farmers'  Bank  (Crabbe 

529)  470 

V.  Laing  (D.  &  R.  16)     109,  312,  313, 

388 

V.  Mackreth  (L.  R.  2  Eq.  570)  54, 118, 

247 
Atkyns  v.  Kinnier  (4  Ex.  776) 
Atlantic  Glass  Co.  v.  Paulk  (83  Ala. 

404,  3  So.  800) 
Atlantic  State  Bank   v.   Savery   (82 

N.  Y.  291) 
Atlas  Nat.  Bank  v.  Savery  (127  Mass. 

75)  99,  187 

Attaway  v.  Third  Nat.  Bank  (15  Mo. 

App.  577)  8 

Attorney-General  v.  Brooksbank  (2 

Y.  &j.  42)  518 

V.  Burges  (Bunb.  223)  124,  125 

V.  Heelis  (2  Sim.  &  S.  67)  553 

V.  Hubbuck  (13  Q.  B.  D.  275)       360 

V.  Pamther  (3  Bro.  C.  C.  441)         27 

V.  Siddon  (1  Cr.  &  J.  220)  124 

V.  Strongforth  (Bunb.  97)  124 

V.  Wilson  (Cr.  &  Ph.  1)  269 

Attwater  v.  Fowler  (1  Hall  180)  260 


145 


65 


98 
470 


345 


225 
124 


187 


Attwater  v.  Fowler  (1  Edw.  417)  519 

Attwood  V.  Banks  (2  Beav.  102)  94 

V.  Rattenbury  (6  J.  B.  Moo.  579)  316 

Atwood  V.  xMaude  (L.  R.  3  Ch.  369)  530 
Aubert  v.  Maze  (2  B.  &  P.  371)  9,  269 
Auld  ('.  Butclier  (2  Kas.  135)  508 

Auley  V.  Osterman  (65  Wis.  118,  25 

N.  W.  657)  480 

Ault  V.  Goodrich  (4  Russ.  430)     157,  193. 

384,  448 
Aultman  v.  Fuller  (53  La.  60)  344 

Austin  V.  Appling  (88  Ga.  54, 13  S.  E. 

955)  409 

V.  Bostwick  (9  Conn.  496)     160,  162 

V.  Holland  (69  N.  Y.  571)  407 

V.  Vandermark  (4  Hill  261)     184, 185 

V.  Walsh  (2  Mass.  401)  313 

V.  Williams  (1  Ohio  282)  12,  103 

Averill  v.  Lyman  (18  Pick.  351)  143;  416 
Avery  v.  Louve  (1  La.  Ann.  457)      12,  13 

V.  Myers  (60  Miss.  367)  65,  452 

V.  Rowell  (59  Wis.  82,  17  N.  W. 

875)  83 

Axe  V.  Clarke  (2  Dick.  549)  290 

Ayer  v.  Tilden  (15  Gray  178)  203 

Ayrault  v.  Chamberlin  (26  Barb.  89)  409, 

428 
Ayres  v.  C.  R.  I.  &  P.  R.  R.  (52  la. 

478,  3  N.  W.  522)  435 
V.  Gallup  (44  Mich.  13)                  429 


B. 


Babb  V.  Read  (5  Rawle  151)  553 

Babcock  c.  Brashear  ( 19  La.  404)        444 

V.  Stewart  (58  Pa.  179)  429 

V.  Stone  (3  McLean  172)       180,  247, 

308 
Babonneau  v.  Farrell  (15  C.  B.  360) 
Bachurst  ;;.  Clinkard  (1  Show.  169) 


320 
324, 
339 
168 
476 
320 
404 


Backhouse  v.  Charlton  (8  Ch.  D.  444) 
Backus  V.  Murphy  (39  Pa.  397) 

V.  Richardson  (5  Johns.  483) 

V.  Taylor  (84  Ind.  503) 

Badeley  v.  Consolidated  Bank  (38  Ch. 

D.  238)  42,  43,  47,  58 

Baer  v.  Wilkinson  (35  W.  Va.  422, 

14  S.E.I)  332 

Bagley  v.  Peddie  (5  Sandf.  192)     223,  225 

v.  Smith  (10  N.  Y.  489)  259 

Bagshaw  v.  Parker  (10  Beav.  532)  460 
Bailey  v.  Clark  (6  Pick.  372)  61,  78 

V.  Ford  (13  Sim.  495)  457 

V.  Lyman  (1  Story  396)  311 

V.  Moore  (25  111.  347)  506 

V.  Starke  (6  Ark.  191)     252,  257,  267 

Bainbridge  n.  Wilcocks  (1  Bald.  536)  515 
Baird  v.  Baird  (1  Dev.  &  B.  524)    280,  509 

V.  Cochran  (4  S.  &  R.  397)      97,  172 

V.  Planque  (1  F.  &  F.  344)  103 

Bake  v.  Smiley  (84  Ind.  212)  476 
Baker,  Ex  parte  (8  Law  Rep.  461)  485 
V.  Biddle  (Bald.  418)              612,  515 


SIV 


TABLE   OF   CASES. 


Baker  v.  Charlton  (1  Peake  80)     106, 

182, 

V.  Jewell  (6  Mass.  460) 

V.  Mayo  (129  Mass.  517) 

V.  Middlebrooks  (81  Ga.  491,8  S. 

E.  320) 

V.  Nachtrieb  (19  How.  126) 

V.  Nappier  (19  Ga.  520) 

V.  Plaskitt  (5  C.  B.  2(52) 

I'.  Slieelian  (29  Minn.  235.  12  N. 

W.  704) 

V.  Stackpoole  (9  Cow.  420) 

r.  Wheaton  (5  Mass.  509) 

Baker's  Appeal  (21  Pa.  76) 

Baldey  v.  Bra';kenridge  (39  La.  Ann. 

660,  2  So.  410)  103, 

Baldney  v.  Ritchie  (1  Stark.  338) 
Baldwin  v.  Johnson  (Saxt.  Cli.  441) 

V.  Leonard  (39  Vt.  260) 

V.  Useful  Knowledge  Society  (9 

Sim.  393) 
Ball  V.  Britton  (58  Tex.  57)  372, 
V.  Farley   (81   Ala.  288,  1  So. 

253) 
Ballam  i;.  Price  (2  J.  B  Moore  235) 
Ballard  v.  Callison  (4  W.  Va.  326) 
Ballon  V.  Spencer  (4  Cow.  163) 
Balmain  v.  Shore  (9  Ves.  500)       127, 
Balmer,  Ex  parte  (13  Ves.  313) 
Baity de  v.  Trump  (1  Md.  Ch.  517) 
Bamford  v.  Baron  (2  T.  R.  594) 
Banchor  v.  Cilley  (38  Me.  553) 
Bandier,  Ex  parte  (1  Atk.  98) 
Bangor  v.  Warren  (34  Me.  324) 
Bank,  Appeal  of  (32  Pa.  440) 

,  Ex  parte  (2  Glyn  &  J.  363) 

, (12  Ch.  D.  917) 

I'.  Alberger  (101  N.  Y.  202) 

V.  Almy  (117  Mass.  476)  50, 

V.  Altheimer  (91   Mo.  190,  3  S. 

W.  858)  68, 

V.  Andrews  (2  Sneed  535) 

V.  Astor  (11  Wend.  87) 

V.  Avmar  (3  Hill  262) 

V.  Bailey  (147  Pa.  HI,  23  AtL 

439) 

V.  Bangs  (10  S.  W.  633) 

V.  Bank   of  Commerce  (94   III. 

271)  475, 476, 
V.  Barnes  (86  Mich.  632, 49  N.  W. 

475) 

V  Baugh  (9  Sm.  &  M.  290) 

V.  Bavless  (35  Mo.  428) 

V.  Bayliss  (41  Mo.  274)  89, 

V.  Bigler  (83  N.  Y.  51) 

V.  Binney  (5  Mas.  176)      29,  36, 

212,  394,  443, 

V.  Bowen  (7  Wend.  158) 

V.  Bradner  (43  Barb.  379) 

V.  Breese  (39  la.  640) 

V.  Brooking  (2  Litt.  41) 


V.Burt  (93  N.  Y.  233) 
V.  Cameron  (7  Barb.  143) 


169, 
184, 
113, 

163, 


170, 
193 
313 
627 

363 

37 

106 

650 

335 
163 

468 
327 

805 
272 
367 
118 

278 
393 

252 
144 
293 

53 

432 

9 

200 

493 

48 
479 
483 
327 
146 
442 
168 
550 

187 
433 
206 
180 

539 
526 

487 

187 
381 
181 
181 
451 
114, 
520 
185 
177 
170 
180, 
206 
488 
180, 
184 


Bank  v.  Campbell  (75  Va.  534) 
V.  Carrollton    K.    R.    (U    Wall. 

624)  231, 

V.  Carter  (20  S.  W.  836) 

u.  Case  (8  B.  &  C.  427)    113,114, 

181, 

V.  Christie  (8  CI.  &  F.  214) 

V.  Clark  (32  N.  E.  255) 

V.  Clarke  (4  Leigh  603) 

V.  Colgate  (120  N.  Y.  381,  24  N. 

E.  799) 
V.  Collins  (28  Eng.  L.  &  Eq.  7) 

V.  Conway  (67  Wis.  210,  30  N. 

W.  215)  68,  69, 

V.  Cox  (38  Me.  500)  75, 

V.  Davis  (2  Hill  264) 

V.  Day  (12  Heisk.  413) 

V.  Dearborn  (20  N.  Y.  244) 

V.  Delafield   (126  N.  Y.  410,  27 

N.  E.  797) 

V.  De  Puy  (17  Wend.  47) 

V.  Doolittle  (14  Pick.  126) 

V.  Dumell  (5  Mas.  56)  381, 

V.  Eaton  (5  Humph.  499)         89, 

V.  Fitch  (49  N  Y.  539) 

V.  Foster  (44  Barb.  87)  87, 

V.  French  (6  All.  313) 

V.  Frye  (148  Mass.  498,  20  N.  E. 

325)  170, 

V.  Furness  (114  U.  S.  376) 

V.  Ga.  &c.  Inv.  Co.  (87  Ga.  651, 

13  S.  E.  505) 

V.  Gore  (15  Mass.  75) 

V.  Gould  (6  Hill  309)     538,  540, 


V.  Gray  (14  Barb.  479) 
V.  Green  (30  N.  J.  316) 
V. (40  Ohio  St.  431) 


95, 
414 


V.  Greely  (16  Me.  419) 

V.  Hackett  (61  Wis.  335,  21  N. 

W.  280) 

('.  Hale  (8  Bush  672) 

V.  Hall  (101  U.  S  43) 

V. (35  Ohio  St.  158) 

V. ( 1  Harp.  245)  376, 

V.  Hennessey  (48  N.  Y.  545) 

V.  Herz  (89  N.  Y.  629) 

V.  Hibbard  (48  Mich.  452,  12  N. 

W.  651) 

V.  Hildreth  (9  Cush.  359) 

V.  Hine  (49  Conn.  236)  49, 

V   Hooper  (36  Me.  222) 

V.  Horn  (17  How.  157) 

V.  Horton  (1  Hill  572) 

V.  Howard  (35  N.  Y  500) 

V.  Hume  (4  Mack.  90) 

V.  Humphreys  (1  McC.  388) 

V.  Hyde  (11  Me.  196)      270.271, 

V.  Johnson  (79  la.  290,  44  N.  W. 

551)  134, 
V. (47  Oh.  St.  306,  24  N.  E. 

603) 


98 

340 

30 
168, 
206 
425 
642 
159 

543 

206, 
216 

405 
114 
413 

89 
408 

247 
143 
143 
403 
170 
345 
180 
170 

405 
427 

98 
119 
546, 
547 
28 
412 
380, 
415 
171 

335 
354 
427 
50 
377 
114 
404 

114 
382 
427 
420 
465 
381 
403 
186 
381, 
413 
807 

146 

351 


TABLE   OP   CASES. 


XV 


Bank  v.  Jones  (119  111.  407,  9  N.  E. 

885)  347 

V.  Keasley  (L.  R  6  C.  P.  433)       147 

V.  Keech  (2G  Md.  521)  187 

y.  Keizer  (2  Duv.  109)  477 

V.  Kendall  (7  R.  I.  77)  170 

V.  Kenney  (79  Ky.  133)  477,  487 

u.  Klein  (64  Miss.  141)  332 

V.  Knapp  (3  Pick.  113)  511 

V.  Landon  (45  N.  Y.  410)  49,  51,  550 

V.  Law  (127  Mass.  72)  99,  187 

V.  Lewis  (13  Sm.  &  M.  226)  168,  180 

V.  Locke  (89  Iiid.  428)  476 

V.  Luinbert  ( 10  Me.  416)  180, 185,  186 

V.  McCaskill  (16  Col.  408,  26  Pac. 

821)  109,  171,404,405 

V.  McChesney  (20  N.  Y.  240)  408,  411 

V.  Matthews  (49  N.  Y.  12)  403 

V.  Meader  (40  Minn.  325,  41  N. 

W.  1043)  87,  89,  163 

V.  Messenger  (9  Cow.  37)  143 

V.  Mitchell  (58  Cal  42)  331 

V. (8  Yerg.  Ill)  307 

V.  Monteath  ( 1  Den.  402)      110,  113, 

114,169,206 

V.  Moore  (13  N.  H.  99)  69,  164 

V.  Moorehead  (5  W.  &  S.  542)      420 

V.  Morgan  (73  N.  Y.  593)  96,  171.445 

V.  Morris  (4  Cush.  99)  182,  486 

V.  Mudgett  (44  N.  Y.  514)  187 

y. (45  Barb.  663)  411 

0.  Mumford  (2  Barb.  Ch.  696)       312 

V.  My  ley  (12  Pa.  544)  361 

V.  Needell  ( 1  F.  &  F.  461)  410 

V.  Norton  (1  Hill  572)     379,  408,  413 

V.  Noyes  (62  N.  H.  35)  83 

y.  Ogden  (29  III.  248)  28 

V.  Osgood  (4  Wend.  607)  144 

V.  Padgett  (69  Ga.  159)  50 

V.  Page  (98  III.  109)  168,  374 

V.  Palmer  (47  Conn.  443)  60 

V.  Parsons  (128  Ind.  147,27  N.  E. 

486)  136 

V.  Phetteplace  (8  R.  L  56)  354 

I'.  Pratt  (51  Me.  563)  380 

V.  Rice  (2  All.  480)  5 

V.  Richardson  (33  La.  Ann.  1312)  98 

V.  Ritter  (12  Atl.  659)  136 

V.  Rollins  (13  Me.  202)  417 

V.  Root  (4  Cow.  126)  165 

V.  Rudolf  (5  Neb.  527)  118 

V.  St.  John  (25  Ala.  566)         32,  273 

V.  Saffarans  (3  Humph.  597)  174, 184 

('.  Savery  (127  Mass.  75)  99,  187 

V. (82  N.  Y.  291)  187 

V.  Sawyer  (38  Oh.  St.  339)    351,  366 

V.  Seton  (1  Pet.  299)  469 

V.  Shaw  (142  Mass.  290,  7  N  E. 

779)  187 

V.  Shryock  (48  Md.  427)        344,  345 

V.  Sirret  (97  N.  Y.  320)  537 

y.  Smith  (26  W.  Va.  641)  49 

V.  Sprague  (20  N.  J.  Eq.  13)  364,  490 

V.  Stall  (15  Wend.  364)  180,  185 

V.  Stewart  (4  Bradf.  254)  331 


Bank  v.  Stone  (38  Mich.  779)  50 

i>.  Strauss  (32  N.  E.  1066)      536,  540 

V.  Templar  (26  F.  R.  580)  145 

V.  Thomas  (47  N.  Y.  15)  89 

V.  Tracy  (77  Mo,  594)  432,  451 

V.  Treadwell  (34  Barb.  553)         540, 

542  545 
1-.  Underbill  (102  N.  Y.  336,  7 

N.  E.  293)  98,  99 

V.  Vanderhorst  (32  N.  Y.  553)      432 

V.  Walker  (66  N,  Y.  424)  50 

y.  Warren  (15  N.  Y.  577)       173,187 

V.  White  (30  F.  R.  412)  83,  87 

V.  Whitney  (4  Lans.  34)  540 

V.  Wilkins  (9  Me.  28)     137,  320,  325, 

327,  339,  344,  346,  500 
V.  Williams  (128  N.  Y.  77, 28  N.  E. 

33)  331 

V.  Wilson  (36  U.  C.  Q.  B.  9)  171 

V.  Winship  (5  Pick.  11)  114,  171 

Bankhead  v.  Alloway  (6  Cold.  56)       139, 

170 
Banks,  Ex  parte  (1  Atk.  106)  487 

. (2  J.  &  La  T.  212)  488 

V.  Gibson  (34  Beav.  566)  243 

V.  Gould  (Edw.  Rec.  316)  301 

V.  Mitchell  (8  Yerg.  Ill)  246 

V.  Steele  (27  Neb.  138,  42  N.  W. 

883)  497 

Bannatyne  v.  Leader  (10  Sim  350)  494 
Banner  Tobacco  Co.   v.  Jeni.son  (48 

MiclL  459,  12  N.  W.  655)  84 

Barber  v.  Backhouse  (1  Peake61)    97, 176 

V.  Hartford  Bank  (9  Conn.  407)    446 

Barclay,  Ex  parte  ( 1  Glyn  &  J.  272)     485 

V.  Gooch  (2  Esp.  571)  269 

('.  Lucas  (1  T.  R.  291)  314 

".  Phelps  (4  Met.  397)     470,  476,  486 

Barckle  v.  Eckart  ( 1  Den.  337, 3  N-  Y. 

1.32)  60 

Barcroft  v.  Snodgrass  (1  Cold.  430)       96 

Bardwell  v.  Perry  (19  Vt  292)     329,  3-36, 

.3.38,  36.5,  476 

Barfield  v.  Loughborough  (L.  R.  8  Ch. 

1)  202 

Barfoot  v.  Goodall  (3  Camp.  147)  412 
Bargate  v.  Shortridge  (5  H.L.  C.  297)  130 
Barhydt  v.  Perry  (57  la.  416,  10  N.  W. 

820)  427 

Baring  v.  Crafts  (9  Met.  380)       113,  128, 

416 

V.  Dix  (1  Cox  213)         455,  457,  462 

V.  Lyman  (1  Story  423)  247 

Barker  r.  Blake  (11  Mass.  16)  96,  416,  422 

V.  Burgess  (3  Met.  273)  97 

V.  Buttress  (7  Beav.  134)  448 

V.  Goodair  (11  Ves.  78)         290,  391, 

463,  464,  466,  468,  470,  476,  503 

V.  Parker  (1  T.  R.  287)  314,  452,  503 

V.  Richardson  (1  Y.  &  J.  362)       142, 

145 
Barklie  v.  Scott  (1  H.  &  B.  83)  17,  48,  49 
Barlow  v.  Reno  (I  Blackf.  252)  155 

V.  Wiley  (3  A.  K.  Marsh  467)        22 

Barnard,  In  re  (32  Ch.  D.  447)  183 


XVI 


TABLE    OF   CASES. 


Barnes  v  Boyers  (34  W.  Va.  303,  12 

S.  E.  708)  418 

V.  Jones  (91  Ind.  161)  293 

u  Union  Ins.  Co.  (51  Me.  110)      236 

Barnett,  Ex  parte  (1  De  Gex  194)         494 

V.  Smith  (17  111.  565)  107 

Barnewall,  Ex  parte  (6  De  G.  M.  &  G. 

795)  487 

Barney  v.  Currier  (I  D.  Chip.  315)        165 

r.  Smith  (4  H.  &  J.  485)  443 

Barnley  v.  Rice  (18  Tex.  481)  167 

Barnstead  v.  Empire  Mining  Co     (5 

Cal.  299)  454,  507 

Barratt  y.  Collins  (10  J.  B.  Moo  446)  320 
Barrett   v.    Furnish   (21  Ore.    17,  26 

Pac.  861)  336 
V.   McKenzie   (24   Minn.   20,   1 

N.  W.  123)  340,  344,  345 

V.  Swann  (17  Me.  180)  58,  171 

Barring  v.  Dix  (1  Cox  213)  371 
Barringer  v.  Sneed  (3  Stew.  201)  162 
Barrow,  Ex  parte  (2  Rose  252)  10,  70, 
128,  129,  138 
V.   Rhinelander   (1   Johns    Ch. 

550)  511 

Barrows  v.  Downs  (9  R.  I.  446)  540,  547 
Barry  i-.  Nesham  (3  C.  B.  641)  40 

Barstow  r.  Adams  (  2  Day  70)  465 

V.  Gray  (3  Me  409)  273 

Barter  v.  Wheeler  (49  N.  H.  9)  65 

Bartle  v.  Coleman  (4  Pet.  184)  8 

Bartlett  v.  Jones  (2  Strobli.  471)  45,  56 
Barton   v.    Hanson    (2   Camp.  97,   2 

Taunt.  49)  88, 103 

V  Williams  (5  B  &  Aid.  395)        54, 

131,  132,  303 
Barwis,  Ex  parte  (6  Ves.  601)  21 

Bascom  v.  Young  (7  Mo.  1)  142,  143 

Bass  V  Estill  (50  Miss.  300)  331 

V  Taylor  (34  Miss.  342)  383 

Bassett  v.  Miller  (39  Mich.  133)     333,  434 

a.  Percival  (5  All.  345)  239 

V.  Shepardson  (52  Mich.   3,  17 

N.  W.  217)  388 

Batard  v.  Hawes  (2  E.  &  B,  287)  254 

Bate,  Ex  parte  (3  Deac.  358)  488 

Bates  V    Callender  (3  Dak.  256,   16 

N.  W.  506)  335 
V.  Forcht  (89  Mo.  121,  1  S.  W. 

120)  206 
V  Lane  (62  Mich.  132,  28  N.  W. 

753)  252 

Batson,  Ex  parte  (1  Glyn  &  J.  269)       480 

, (Cooke,  B.  L.  503)  497 

, (2  Ca.  Ch.  139)  499 

Battaille  v.  Battaille  (6  La.  Ann  682)  542 
Battley  v.  Bailey  (1  Scott  N.  R.  143)  12 
Batty  v.  Adams  Co    (16  Neb.  44,  20 

N.  W.  15)  352,  367 

V.  McCnndie  (3  C.  &  P.  202)  78 

Bawden  v.  Howell  (3  M.  &  G.  638)  316 
Baxter  v.  Clark  (4  Ired.  127)  74,  78 

V.  Connoly  ( 1  Jac.  &  W.  580)        240 

V.  Plunkett  (4  Houst.  450)  170 

V.  Rodman  (3  Pick.  435)  60,  61 


Baxter  v.  West  (1  Dr.  &  Sm.  173)        454 
Baylis  v,  Dineley  (3  M  &  S.  477)  16 

Bays  V.  Conner  (105  Ind.  415,  5  N  E 

18)  84 

Beacannon  v.  Liebe  (11  Ore.  443,  5 

Pac.  273)  271 

Beach  v.  Hay  ward  (10  Ohio  455)   273,443 

f.  Hotchkiss  (2  Conn.  425)   250,  260, 

264,  507 

V. (2  Conn.  697) 

V.  State  Bank  (2  Ind.  488) 


Beacham  v.  Eckford  (2  Sandf. 

116) 
Beak  v.  Beak  (3  Swanst.  627) 


313 
111,  169, 

185 
Ch 

507,  524 
380,  383, 

384 

521 
293, 

114,  316 
439,  527 
131,  425 

225 
426,  430 

105 


V. (Cas.  t.  Finch  190) 

Beakes  v.  Da  Cunha  (126  N.  Y 

27  N  E.  251) 
Beale  v.  Beale  (2  N.  E.  65) 

V  Caddick  (2  H.  &  N.  326) 

V.  Hayes  (5  Sandf.  640) 

V.  Mouls  (10  Q.  B.  976) 

Beall  V.  Lowndes  (4  S.  C.  258) 

V.  McCullough  (27  Md.  645)         426 

Beaman  v.  Whitney  (20  Me.  413)  12 

Bean  v.  Morgan  (4  McC.  148)  23 

Beard  v.  Webb  (2  B  &  P.  93)  22 

Beardsley  v.  Hall  (36  Conn.  270)  160 

Beatson  v.  Harris  (60  N.  H.  83)  98 

Beatty  v.  Bates  (4  Y.  &  C.  182)  .34 

V.  Wray  (19  Pa.  516)  201,  439 

Beaumont  r.  Bramlev  (1  Turn.  51)      512 

V.  Meredith  (3  Ves.  &  B.  180)        35, 

456,  462,  553 
Beauregard  r.  Case  (91  U  S.  134)  13,  58 
Beaver  v.  Lewis  (14  Ark.  1.38)  371 

Beck,  In  re  (19  Ore  503, 24  Pac.  1038) 

399,  431,  523 

V.  Martin  (2  McMull.  260)      142,  147 

Beckett  v.  Ramsdale  (31  Ch.  D.  177)   409 
Beckham  v.  Drake  (9  M.  &  W.  79)        90 

V.  Knight  (4  Bing  N.  C.  243)  90 

V.  Peag  (2  Bail.  133)  178 

Beckford  v.  Wade  (17  Ves.  87)  514 

V.  Wildman  (16  Ves.  438)  520 

Beck  with  v.  Manton  (12  R.  I.  442)       350 

V.  Talbot  (95  U.  S  289)  63 

V. (2  Col.  639)  57,  63 

Bedford  v.  Brutton  (1  Scott  245,  1 
Bing.  N.  C.  407)  257,  258,  277 

V.  Deakin  (2  Stark    178,  2  B  & 

Aid.  210)       387,416,417,418,482,485 
Beebe  v.  Rogers  (3  Greene  319)  89 

Beech  f.  Eyre  (5  M.  &G.  415)  426 

Beecham  v.  Dodd  (3  Harr.  485)    6,  45,  55 

V.  Eckford  (2  Sandf.  Ch.  116)        199 

Beecher  v.   Bush   (45  Mich.   188.  7 
N.  W.  785)  46,  47,  51 

V.  Guilhane  (Mos.  3)  194 

Beers  v.  Reynolds  (12  Barb.  288,  11 

N   Y.  97)  539,  543,  544,  545 

Beitz  V.  Fuller  (1  McC.  541)  159,  160 

Belknap  v.  Gibbens  (13  Met.  471)  270 

Bell,  Ex  parteil  M.  &  S.  761)  9,  269 


TABLE   OP   CASES. 


XVU 


Belly,  Ansley  (16  Kast  141)  318 

y.  Banks  (3  M.  &  G.  258)  91.  92 

.;.  Baniett  (21  VV    K.  11<J)  204 

V.  Hep  worth  (134  N   Y.  442,  31 

N.  E.  918)  451 

0.  Hudson  (73  Cal   285,  14  Pac. 

791)  512 

r.  Laginaiis  (1  Men  40)  304 

V.  Morrison  ( 1  I'et.  31J7)  150, 160, 102 

l:  Newman  (5  S.  &  R.  78)     327,  440, 

478,  500 

. i:  riiyn  (7  Ves.  453)  357 

Bellairs  v   P^lswortli  (3  Camp  53)  315 

Belote  V.  Wynne  (7  Yerg.  534)  100 

Belton  r.  Hodges  (9  limg.  .-JOo)  21 

Bendell  r.  Hettrick  (45  H.nv.  Pr.  198)  57 

Benedict  v.  Davis  (2  McLean  347)  104, 

107 

Benfield  ;'.  Solomons  (9  Ves.  76)  350 

Benhain  o.  Bishop  (9  Conn.  330)  19 

r.  Gray  (5  C.  B.  138)  377 

Benjamin  u.  Covert  (47  Wis.  375,  2  N. 

W.  025)  409 

V.  Porteus  (2  H.  Bl  590)  00 

■'.  Stremple  (13  111.  406)  304 

Bennet,  Er  parte  (2  Atk.  527)  465 

,  (Cooke  B.  L.  229)  4t)7 

Bennett,  Re  (2  Low  400)  463 

/■.  Marsliall  (2  Mills  436)  155 

0.  Kiissell  (34  Mo.  524)  200 

r.  Smitli  (40  Mich.  211)  249 

o.  Stickney  (17  Vt.  531)  145 

r.  Woolfolk  (15  Ga.  213)  9 

Bennett's  Case  (18  Beav.  339,  5  De  G. 

M. &  G.  284)  384 
Benmnger  i'.  Clarke  (10  Abb.  Pr  n  s. 

264) 

r.  Hess  (41  Oh.  St.  64) 

Bensley  r.  Bignold  (5  B.  &  Aid.  335) 
Benson,  Ec  parte  (Cooke  B.  L.  278) 

IV  Hadfield  (4  Hare  32) 

V.  Heathorn  (1  Y.  &  C  326) 

V.  McBee  (2  McMuIl.  91) 


Bentley  v.  Bates  (4  Jur.  552) 

c.  (4  Y.  &  C.  182) 

r.  Craven  (18  Beav.  75) 

u.  Harris  (10  R.  1.  434) 

u.  White  (3  B.  Mon  263) 


240 

87 

9 

496 

419 

384 

37,  50. 

59,  82 

281 

298 

197 

47 

37,  59,81, 

82,  163 

Benton  v  Chamberlin  (23  Vt.  711)     409, 

410 

V.  Roberts  (4  La.  Ann  216)  84 

Bergamini  v.   Bastian  (35  La,   Ann. 

60)  237 

Bergland  v.   Frawley   (72   Wis.   559, 

40  N.  W.  372)  99 

Berkeley  v.  Hardy  (5  B.  &  C.  355)         150 
Berkshire  v.  Evans  (4  Leigh  223)  9 

Berksliire  Woolen  Co,  i:  Juillard  (75 

N.  Y.  535)  182 

Bernard  v.  Torrance  (5  G.  &  J,  383)    402, 

406,  410 

V.  Wilcox  (2  Johns.  Cas.  374)        109 

Berryw.  Cross  (3  Sandf,  Ch.  1)  450 


Berry  v  Folkes  (60  Miss.  576)     293,  352, 
300,  367,  527 

V.  Jones  (11  Heisk.  200)  299 

Berthold  v.  Goldsmith  (24  How  536)  00 
Besch  V.  Frolich  (1  Phil.  172,  7  Jur. 

73)  38y,  460,  461 

Best  V.  Givens  (3  B  Mon.  72)  18 

Beste  r.  Burger  (110  N.  Y.  044,  17  N. 

E  734)  130 
V.  His   Creditors   (15  La.    Ann. 

55)  194 

Bethel  v.  Franklin  (57  Mo.  460)  249,250 
Betts  V.  Bagley  (12  Pick   572)  468 

L\  Letciier  (40  N.  W.  193)      351,  300 

Bevan,  Ex  parte  (9  Ves.  222,  10  Ves. 

107)  480,  487,  488 

y.  Lewis  (1  Sim  370)        88,90,181, 

290,  344 
Be  vans  v.  Sullivan  (4  Gill  383)       09,  199, 

200 
Bewley  v.  Tarns  (17  Pa.  485)  154 

Biddlecombe  r.  Bond  (4  A.  &  E.  332)  219 
Biernan  /■.  Brasiies  (14  Mo.  24)  252 

Bigelow,  fn  re  (3  Ben.  146)  487 

V.  Graniiis  (2  Hill  120)  18 

r.  Reynolds    (08   Mich.   344,   36 

N.  W.  95)  .320 

Bigg,  Et  parte  (2  Rose  37)  488,  496 

Biggs  V.  Fellows  (8  B.  &  C.  402)  471 

V.  Hubert  (14  S.  C.  620) 

V  Lawrence  (3  T.  R   454) 

Bignold,  Ex  jiarte  (2  Mont.  &  A.  655)  146 

t:  Waterhouse  (1  Moo.  &  S.  249)     86, 

142,  164,  413 
Bill  a  Porter  (9  Conn.  23)  483 

Billings  V.  Meigs  (53  Barb.  272)  97 

Binford  r.  Domniett  (4  Ves.  756)  302,406 

I'.  Dormnett  (4  Ves  434)  498 

Bininger  r.  Clark  (00  Barb.  113)  237,243 
Binney  r.  Le  Gal  (19  Barb.  592)  155 
r.  Mutrie  (12  App.  Cas.  160)      222, 


8.3,  139 
323 


525 

98 

224 


Binns  v.  Waddill  (.32  Gratt.  588) 
Birch  V.  Stephenson  (3  Taunt.  409) 
Birchett  v.  Boiling  (5  Munf.  442)  209,  279 
Bird  i:  Bird  (77  Me.  499,  1  Atl.  4-55)     272 

i-  Caritat  (2  Johns.  342)  468 

V.  Hamilton  (Walk.  Ch.  361)      5,  13 

;•.  Lanius  (4  Wis.  615)  88 

i:  McCoy  (22  la.  549) 

V.  Morrison  (12  Wis.  138) 

Birdsall  v  Colie  (2  Stock.  63) 
Birks  V.  French  (21  Kas.  238) 
Birtwhistlo  r  Woodward  (95  Mo.  113, 

7  S.  W.  405) 
Bisel  V.  Hobbs  (6  Blackf.  479) 
Bishop  V.  Austin  (66  Mich.  515,-33  N 

W.  625) 
V.  Breckles  (1  Hoff.  Ch.  534) 


272 

7 

293,  297 

116 


340 
74 


49 
396, 
455 
109 

61 


r.  Hall  (9  Grav  4-30) 

/■.  Shepherd  (23  Pick.  492) 

Bisphain  r.  Patterson  (2  McLean  87)  160, 

162,  104 
Bissell  1-.  Adams  (35  Conn,  299)  160 


XVIU 


TABLE   OF   CASES. 


Bissell  V.  Foss  (114  U.  S.  252)  3i 

Bitter  v.  liatlinian  (01  N.  Y,  512)  24 

liuztT  v.  yiiuiik  (1  \V.  &  S.  340)  155 

Black  V.  Black  (15  Ga.  445)  34'J 

V.  Bush  (7  B.  xMuii  210)         327,  337 

Black's  Appeal  (44  Ta.  503)  470,  477 

Blackburn*,  Er  pane  (10  Ves.  204)         400 

r   McCallister  (Peck  371)  150 

Blackett  v.  Weir  (5  B.  &  C.  3^• )  254,  207 
Blades  v.  Free  ('J  B.  &  C.  107)  387 

Blain  v.  Agar  (  1  Sim.  37)  277 

Blair  V.  Bioiuiey  (5  Hare  542,  2  Pliil. 

354)  110, 142 

V.  Snover  (1  Halst.  153)  313 

v.  Wood  (108  Pa.  278)  445 

Blair  Miller  v.  Douglas  (Coll.   Part 

495)  180 

Blake,  A'.r  fjarte  (Cooke  B.  L  503)         490 

V.  Dorgan  (1  Greene  540)  371 

V.  Nutter  (19  Me.  10)  349 

V.  Sweeting  (121  III  07,  12  N.  E. 

67)  306, 392 

V.  Wlieadon  (2  Hayw.  109)  308 

I'.  Williams  (0  Pick.  286)  468 

Blakeley  r.  Graham  (111  Mass.  8)  259 
Blakeney  i:  Dufaur  (15  Beav.  40)  294, 
295,  298,  456 
Rlaker  v.  Sands  (29  Kas.  551)  84,  393 
Blanchard  v.  Coolidge  (22  Pick.  151)     45, 

66,60 

V.  Floyd  (93  Ala.  53,  9  So  418)     351 

V  Kaull  (44  Cal.  440)  50 

V.  Parteur  (2  Hayw.  393)  93 

V.  Paschal  (68  Ga.  32)  335,  351 

Bland  r.  Haselrig  (2  Vent.  152)  156 

Blankenliagen,  £j: parte  (Cooke  B.  L 

257)  487 

Blew  V.  Wyatt  (5  C.  &  P.  397)  387,  419 
Bliuh  V.  Brent  (2  Y.  &  C.  268)  554 

Blight  V.  Tobin  (7  Mon.  617)  117 

Blin  V.  Pierce  (20  Vt.  25)  272 

Blinn  v.  Evans  (24  111.  317)  175 

Blisset  V.  Daniel  (11  Hare  493)  193,  207, 
217,  391,  395,  399 
Bloch  V.  Price  (32  F.  R.  562)  404 

Blodgett,  In  re  (10  N.  B.  R.  145)   335,  491 

V.  Amer.  Nat.  Bank  (49  Conn.  1)  451 

I'.  Sleeper  (67  Me.  499)  99 

V.  Weed  (119  Mass.  215)  87,  170 

Blood  r.  Goodrich  (9   Wend.  75,  12 

Wend.  525)  1-50 

Bloodgood  V.  Zeily  (2  Cai.  Gas.  124)    511, 

512 
Blnomfield  r.  Buchanan  (14  Ore.  181, 

12  Pac.  238)  524 

Blount  V.  Hipkins  (7  Sim,  51)  555 

Bioxam  v.  Hubbard  (5  East  407)  320 

Bloxham,  Ex  jmrte  (6  Ves.  449)  485 

Bluck  V.  Capstick  (12  Oh.  D.  863)  214,  530 
Blue  v.  Leathers  (15  111.  31 )  53,  63,  262 
Blumer,  In  re  (12  F.  R.  489)  478 

, (13  F.  R.  622)  487 

Blundell  v.  Winsor  (8  Sim.  601 )     384,  550, 

552.  554,  556 

Blytli  V.  Fladgate  (1891,  1  Ch.  337)      121 


Blythe,  Ex  parte  (16  Cli.  D.  620)  497 

Board  of  Trade  i;,  Hayden  (4  Wash. 

St.  203,  30  Pac.  87) '  24 

Boardman  v.  Gore  (15  Mass.  331)    78,  119 

122 

1-.  Keeler  (2  Vt.  65)  273,  498 

V.  Mosman  (1  Bro.  C.  C.  68)  123 

Bobo  ('.  Hansel!  (2  Bail.  114)  18 

Bodenliam    v.  Purchas  (2  B.  &  Aid. 

39)  425,  522 

Bodle  V.  Chenango  Co.  Ins.   Co    (2 

N.  Y.  53)  235 

Boekle'n  v.   Hardenburgh   (37  N.  Y. 

Super.  110)  67 

Boggess  V.  Lilly  (18  Tex.  200)  9 

Bogget  c.  Frier  (11  East  301)  23 

BoKgs  V.  Curtin  (10  S.  &  R.  2il)  317 

Bo'hler  v.  Tappan  (1  F.  R.  469)  135 

Boire  i-.    McGinn  (8  Ore.  466)  519 

Bolitlio,  Ex  parte  (Buck  100)    75,  89,  113, 

114,  181 
Bolland,  Ex  parte  (Mont.  &  M  315)     121, 

122 
Boiling  r.  Boiling  (5  Munf.  334)  512 

Bolton,  Ex  parte  (Buck  18)  470 

V  Puller  (1  B.  &  P.  539)    70,  311,  491 

Bonbonus,  Ex  parte  (8  Ves.  540)    99, 175, 

177,496 
Bond,  Ex  parte  (1  Atk.  98) 
V.  Aitkin  (6  W.  &  S.  165) 


487,  496 

89,  92, 

151,  152 


V.  Gibson  (1  Camp.  185)  139 

V.  Hayes  (12  Mass.  34)  266 

V.  Milbourn  (20  W.  R.  197)  529 

V.  Nave  (02  Ind.  505)  470 

r.  Pittard  (3  M.  &  W.  357)       54,  107 

Bonfield  v.  Smith  (12  M.  &  W.  405)  272 
Bonnaffe  v.  Fenner  (6  Sm.  &  M.  212)  6,  255 
Bunnell  v.  Chamberlin  (20  Conn.  487)  95 
Bonner  v.  Campbell  (48  Pa.  286)  357 
Bonney  v.  Ridgard  (1  Cox  145)  514 
f.  Stoughton   (122   111.   536,    13 

N.  E.  833)  306 
Bonsall  v.  Comly  (44  Pa.  442)  491 
Bonsteel  v.  Vanderbilt  (21  Barb  26)  66 
Boor  r.  Lowrey  (103  Ind.  468)  105 
Booth  V.  Clark  (17  How.  .322)  296 
V.  Farmers'  «Sb  Merchants'  Bank 

(74  N.  Y.  228)  204 

V.  Hodgson  (6  T.  R.  405)  9,  269 

V.  Merer  ( 14  N.  B.  R.  575)  403 

V.  Parks  (1  Moll.  405)    212,  394,  436, 

438,  521 

V.  Smith  (3  Wend.  66)  483 

Borden  v.  Cuyler  (10  Cush.  476)  487 

Boro  i\  Harris  (13  Lea  30)  344 

Bosanquet  v.  Wray  (6  Taunt.  597)  70,  217, 
209,  271,  307,  309 
Boston  &  Col.  Smelting  Co.  v.  Smith 

(13RL27)  44,46,61 

Bostwick  i\  Champion  (11  Wend.  571, 

18  Wend.  175)  124 
Bosvil  1-.  Brander  (1  P.  Wms.  458)  479 
Bos  well  r.  Dunning  (5  Harr.  231)  316 
I'.  Green  (1  Dutch.  390)          131,  134 


TABLE    OF   CASES. 


XIX 


Botifeur  v.  Weyman  (1  McC.  Ch.  15C) 

611,  512,  514 
Bottomley  v.  Nuttall  (5  C.  B.  n.  s  122) 

'Jo,  90 
Rousliner  r.  Black  (83  Ky.  521)  303,  y2'J 
Buuldin  V.  Page  (24  Mo.  5y4)  165, 187,  413 
Boulter  v.  Peplow  (9  C.  B.  493)  255 

Bound  V  Lathrop  (4  Conn.  38(3)     159,  164 

V.  Freeth  (9  B.  &  C  032)        105,  107 

Bourne -f.    Wooldridge  (10  B.  Mon. 

4'.»2)  98 

Boussmaker,  .Ex /var<e  (13  Ves   71)         26 
Bovill  V.  Hammond    (6  B.  &  C.  148, 

9  D   &  li.  186)  35,  55,  58,  248,  250,  203, 

205 
Bowas  V.  Pioneer  Tow  Line  (2  Sawy. 

21)  06 

Bovvden  v.  Schatzell  ( 1  Ball.  Eq.  360) 

330,  444 
Bowen  V.  Argall  (24  Wend.  496)  538,  545, 

546,  547 
V.  Billings  (13  Neb.  439, 14  N.  W. 

152)  350, 

V  Mead  (1  Midi.  432) 

V.  Kuthertord  (OU  III.  41) 

Bower  v.  Twadlin  ( 1  Atk.  294) 
Bowers  v.  Still  (49  Pa.  65) 
Bowie  V.  Maddox  (29  Ga.  285)       103,  104 
Bowker  v.  Bradford  (140  Mass.  521, 

5  N.  E.  480)  24 

V.  Burdekin  (11  M.  &  W.  128)       154 

V.  Smith  (48  N.  H.  Ill) 

Bowler  v.  Huston  (30  Gratt.  260) 
Bowman  v.  Bailey  (20  S.  C.  550) 

V. (10  Vt.  170) 

u.  Spalding  (2  S.  W.  911)       231,  332 

Bowyer  v.  Anderson  (2  Leigh  550)  35,  4-5, 

62,  63 
Bowzer   v.   Stoughton   (119    111 

9  N.  E.  208) 
Boyce  v.  Burcliard  (21  Ga.  74) 

V.  Coster  (4  Strobh.  Eq.  25) 

V.  Owens  (I  Hill  S.  C.  8) 

V.  Watson  (3  J.  J.  Marsh,  498) 

Bovd  V.  Cann  (10  Md.  118) 

— -  l:  Emerson  (2  A.  &  E.  184) 

r.  Mvnatt  (4  Ala.  79) 

r.  Ki'cketts  (60  Miss.  62) 

r.  Tliompson  (25  Atl.  709) 

Boyden  v.  Boyden  (29  N.  H.  519) 


352 
172 

08 
143 

95 


336 

334 

363 

45 


47, 
248 
295 
337 
23 
103 
412 
148 
211,458 
69 
153,  155 
18 
Boyers  i'.  Elliott  (7  Humph.  204)  361 

Boynton  v.  Page  (13  Wend.  425)  199 

Boys  V.  Ancell  (7  Scott  304)  223,  224 

Bozon  r.  Farlow  (1  Mer.  459)         240,  241 
Brace  i-.  Taylor  (2  Atk.  253)  517 

b:  Washburn  (43  Me.  504)  55 

Braches  v.  Anderson  (14  Mo.  441)     74, 139 
Bracken  v.  Dillon  (04  Ga.  243)  4,  427 

c.  Kennedy  (4  111.  558)  240,  268,  507, 

508 
Bracket  v.  Winslow  (17  Mass.  153)  384 
Bradbury,  Ex  parte  (4  Deac.  202)  484 

V.  Barnes  (19  Cal.  120)  355 

I'.  Dickens  (27  Beav.  53)  237 


V.  Smith  (21  Me.  117) 


545,  546 


Bradford  v.  Kimberly  (3  Johns.  Ch. 

431)  200,  384,  500 

V.  Taylor  (01  Tex.  508)  168 

Bradford  Com.  Banking  Co.  v.  Cure 

(31  Ch.  D.  324)  136 

Bradley  v.  Brigiiam  (137  Mass  545)     527 

V.  Chamberlin  (16  Vt.  613)    212,  384, 

394,  443 

V.  Ilarkness  (26  Cal.  76)  128 

V.  Holdsworth  (3  M.  &  W.  422)     554 

V.  White  (10  Met.  303)  45 

Bradner  >:  Strang  (89  N.  Y.  299)  125 

Bradstreet  ;•.  Baer  (41  Md.  9)  23 

Brady  v.  Calhoun  (1  P.  &  W.  140)  35,  53, 

349 

V.  Hill  (1  Mo  315)  103 

Braithwaite  v.  Britain  (1  Keen   200) 

444,  445,  482 
V  Power  (1  N.  D.  455,  48  N.  W. 

354)  105 

Bralev  f.  Goddard  (49  Me.  115)  t,0 

Brand  v.  Boulcott  (3  B.  &  P.  235)  253 

Brandon  v.  Hubbard  (4  J.  B,  Moore 

307)  36 

V.  Nesbitt  (6  T.  U.  23)  26 

V.  Kobinson  (18  Ves.  429)  407 

Brandred  v.  Muzzy  (1  Dutch.  268)  57 

Brandrum  v.  Wharton  (1  B.  &  Aid. 

463)  157,  159 

Brannon  v.  Hursell  (112  Mass.  63)  203 
Brasfield  c.  French  (59  Miss.  632)  451 
Brasier  v.  Hudson  (9  Sim.  1)  144 

Brassington  v.  Ault  (2  Bing.  177)  273,498 
Braun's  Appeal  (105  Pa.  414)  222 

Bray  v.  Fromout  (6  Madd.  5)  10,  128,  138, 

555 
Brazier  v.  Bryant  (2  Dowl.  Pr.  477)  420 
Brecher  v.  Fox  (1  F.  R.  273)  98 

Breckenbridge    i-.   Ormsby   (1    J.    J. 

Marsh   236)  16 

Breckinridge  v.  Shrieve  (4  Dana  375)  82, 84 
Breen  c.  Richardson  ((>  Col.  605)  364 

Bremner  i'.  Chamberlayne  (2  C.  &  K 

500) 
Brenan  v.  Prestsn  (2  DeG.  M.  &  G. 

813) 

Brenchley,  Ex  parte  (2  Glyn  &  J.  127)  499 
Brennan  v.  Pardridge  (67  Mich.  449, 

35  N.  W.  85) 
Brent  i-.  Davis  (9  Md.  217) 
Brett  r.  Beckwith  (3  Jur.  n.  s.  31) 
Brettel  v.  Williams  (4  Ex.  623) 
Brewer  v.  Browne  (08  Ala.  210)  222.  306, 

361,  363 

V.  Worthington  (10  All.  329)         414 

V.  Yorke  (46  L.  T.  x.  s.  289)         530 

Brewster  v.  Hammet  (4  Conn.  540)      291, 

325,  344 

V.  Hardemnn  (Dud.  Ga.  138)  100 

V.  Mott  (5  111.  378)     97,  99,  100,  173. 

179. 274 

V.  Keel  (74  la.  506,  38  N.  W.  381)  99 

i:  Wakefield  (22  How.  118)  203 

Briar  Hill  Coal  &  Iron  Co.  v.  Atlas 

Works  (146  Pa.  290, 23  Atl.  326)  539, 549 


426 
298 


115 

78 
330 
186 


XX 


TABLE   OF   CASES. 


Briee's  Case  (1  Mer.  620)  387 

Brickhouse  v.  Hunter  (4  Hen.  &  M. 

3(5o)  520 

Brickwood  v.  Miller  (3  Meriv.  279)       468 
Bridge  v.  Grav  (14  Pick.  55)    6y,  162,  104 

V.  McCudough  (27  Ala.  601)  331 

Brierly  v.  Cripps  (7  C.  &  P.  709)     260,  204, 

265 
Briggs  V.  Vanderbilt  (19  Barb.  222)  60 
Brigham,  Ex  parte  (Cooke  B  L.  538) 

428 

V.  Clark  (100  Mass.  430)  55 

V  Dana  (29  Vt.  1)  51,  55,  200 

V.  Eveletli  (9  Mass.  538)         254,  263 

Bright  V.  liiitton  (3  H.  L  C.  341)  52 

V.  Rowland  (3  How.  Miss.  398)      225 

v.  Sampson  (20  Tex.  21)  145 

Brill  V.  Hoile  (53  Wis.  537,  11  N.  W. 

42)  414 

Brinley  v.  Knpfer  (6  Pick.  179)    261,  265, 

522 
Brisban  v  Boyd  (4  Paige  17)  163 

Briscoe  i'.  Anketell  (28'Miss.  361)         161 
Bristow  V.  James  (7  T.  R  257)  469 

V.  Tavlor  (2  Stark.  50)  307 

IV  Towers  (6  T.  R.  35)  26 

British  N.  America,  Bank  of  r.  Dcla- 

field  (120  N.  Y.  410,  27  N    E.  797)     247 
Broad  v.  Joilyfe  (Cro.  Jac.  596)  401 

Broadbent,£'j://ar^e  (I  Mont  &A.  635)  508 


]?roadus  v.  Evans  (63  N.  C.  633) 
Brock  v.  Bateman  (25  Oh.  St  609) 


97 
331, 

478 


Brockenbrough  v.  Hackley   (6    Call 

51)  '  100 

Brockwav  r.  Burnap  (16  Barb.  310)  45 
Brbda  i-.  Green wald  (66  Ala.  538)  248 
Brooke  v.  Enderby  (2  Br.  &  B.  70)       425 

V.  Evans  (5  Watts  190)  102 

V.  Washington  (8  Gratt.  248)  74,  350 

Brooks  r.  Martin  (2  Wall.  70)  8,  193,  195 
Broom  c.  Broom  (3  M.  &  K.  443)        350, 

364 
Broome,  Ex  parte  (1  Rose  69)  11, 103,  277, 
.  455,  473,  499 
Brothrovd,  In  re  (14  N.  B.  R.  323)  491 
Brown,  'Ex  parte  ( 1  Atk  225)  89,  92 
v.  Agnew  (6  W.  &  S.  235)     262,  266, 

268 
23,  168, 

38s 

r.  Clark  (14  Pa.  469)  381 

1-.  ])e  Tastet  (Jac.  284)     10,  70,  128 

129,  438,  443,  466,  468,  501,  523 

r.  Duncan  (5  B.  &  C.  93)  8 

V.  Duncanson  (4  H.  &  McH.  350)  172 

r.  Gordon  (16  Beav.  302)  419 

I'.  Grant  (39  Minn.  404,  40  N.  W. 

268)  104 

r.  Hardcastle  (63  Md.  484)  203 

V.  Heathcote  (1  Ves.  239)  137 

r.  Hicks  (24  F.  R.  811)  60 

V.  Higginbotham  (5  Leigh  583)       45 

r.  J.Tquette  (94  Pa.  113)  53 

r.  Jewett  (18  N.  H.  230)     23,  24,  389 


Chancellor  (61  Tex.  437) 


Brown  v.  Lawrence  (5  Conn.  397)        142 

V.  Litton  (1  P.  Wms.  140)     194,  443, 

600 

v. (1  P.  Wms.  224)  438 

V.  Leonard  (2  Chit.  120)    78,  403,  407 

V.  McFarland  (41  Pa.  129)  439 

17.  Marsli  (7  Vt.  327)  143 

V.  Rains  (53  la  81,  4  N.  W.  867)    69, 

104 

V.  Tapscott  (6  M  &  W.  119)  57,  248, 

258,  264,  269,  507 

V.  Turner  (7  T.  R.  630)  9 

V.  Vidler  (15  Ves  223,  2  Russ 

340)  443,  501 
f.    Watson   (66    Mich.   223,   33 

N.  W.  493)  364 
V. (72  Tex.  216,  10  S.  W. 

395)  60 

Brown's  Appeal  (89  Pa.  139)        201,  438. 

439,  526 
Browne  v.  Carr  (7  Bing  508)  470 

V.  Gibbins  (5  Bro.  P.  C.  491)  101,  276 

Brownel  v.  Brownel  (2  Bro.  Ch  62)  515 
Srownell  v.  Steere  (128  111.  209,  21 

N.  E.  3)  522,  527 

Browning  v.  Marvin  (22  Hun  547)  469 
Brownlee  i'.  Allen  (21  Mo.  123)  63,  354 
Brownrigg  v.  Rae  (5  Ex.  489)  133 

Brozel  v.  Poyntz  (3  B.  Mon.  178)  76 

Brubaker  v.  Robinson  (3  Pen.  &  W. 

295) 
Bruen  v.  Marquand  (17  Johns.  58) 


265 
152. 
307 
103 

65 


Brugman  v.  McGuire  (32  Ark.  733) 
Brundred  v.  Muzzv  (1  Dutch  268) 
Brunson  v.  Morgan  (76  Ala.  593)  351,  367 

V. (84  Ala.  598,  4  So  589)      352 

Brutton  v.  Burton  (1  Chit.  707)     151,  153, 

155 
Bry  V.  Cook  (15  La.  Ann.  493)  515 

Bryant  r.  Wardell  (2  Ex.  479)  55 

Brvce  v.  Joynt  (63  Cal.  375)  69,  164 

Bryden  v.  Taylor  (2  H.  &  G.  400)  48 

Brydges  v.  BranfiU  (12  Sim.  369)  116,  117 
Bryson  v.  Whitehead  (1  Sim.  &  S.  74)  401 
Buchan  v.  Sumner  (2  Barb.  Cii.  165)  349, 
358,  361,  367,369 
Buchanan  v.  Curry  (19  Johns.  137)      148, 


Buchoz  V.  Grandjean  (1  Mich.  367) 
Buck  V.  Mosley  (24  Miss.  170)  97,  98, 

r.  Smith  (29  Mich.  166) 

V.  Winn  (11  B.  Mon.  320) 

Buck  Stove  Co.  v.  Johnson  (7  Lea 

282) 
Bucki  V.  Cone  (25  Fla.  1,  6  So.  160) 


149 
148 
274 

279 
362 

231 
125, 
338 


Buckingham  v.  Burgess  (3  McLean 
364)  103,  104 

V.  Hanna  (20  Ind.  110)  127 

V.  Ludlum  (29  N.  J.  Eq.  345)         526 

V. (37  N.  J.  Eq.  137)  445 

Buckland  r.  Newsame  (1  Taunt.  477)    146 
Buckley,  Ex  parte  (14  M.  &  W.  469)    113, 

183 


TABLE   OF    CASES. 


XXI 


Buckley  v.  Bramhal  (24  How.  Pr.  455)  545, 

546 

V.  Buckley  (11  Barb.  43)       349,  354, 

358,  301 
Bucknal  v.  Roiston  (Free.  Ch.  285)  137 
Bucknam  v.  Barnuin  (15  Conn.  67)  45,  53, 

164 
Buckner  v.  Lee  (8  Ga.  285)  46,  114 

V.  Kies  (34  Mo.  357)  255 

Buell  V.  Cole  (54  Barb.  353)  251 

Buffalo   City    Bank    v.  Howard    (35 

N.  Y.  500)  403 

Biiffum  V.  Buffum  (49  Me.  108)        6,  3-50 
Biifkin  v.  Bovce  (104  Ind.  53)  293 

Biifurd  V.  Nccly  (2  Dev.  Eq.  481) 
Biilfiiich  u.  Winclienbach  (3  All.  161) 


391 
66. 
346 


Bulger  f.  Rosa  (119  N.  Y.  459,  24  N.  E. 

8')3)  332 

Bulkley  r.  Dayton  (14  Jolins.  387)        152 

u.  Marks  (15  Abb.  Pr.  454)  539,  544, 

545,  546 
Bull  V.  Coe  (77  Cal.  54,  18  Pac.  808)      252 

r.  Scliuberth  (2  Md.  38)  60 

BuUard  v.  Smith  (139   Mass.  492,  2 

N.  E.  86)  55 

Bullen  v.  Sharp  (L.  R.  1  C  P.  86)   42,  61, 

129 

V. (18  C.  B.  N.  s.  614)  129 

Bullock  i:  Boyd  (1  Hoff.  Cli.  294)         515 

V. (2  Edw.  Ch.  293)  515 

V.  Crockett  (3  Giff.  507)  529 

Bumage  v.  Prosser  (4  B.  &  C.  247)        320 
Bumpass  v.  Webb  (1  Stew.  19)  252 

Bundy  v.  Bruce  (61   Vt.  619,  17  AtL 

796)  69 
f;.    Youmans    (44    Mich.    376,   6 

N.  \V.  851)  438 

Bunn  i:  Grey  (4  East  190)  401 

Bunnel  v.  Taintor  (4  Conn.  568)  7 

Burbauk  v.  Wilev  (79  N.  C.  501)  134,  231 
Burden  v.  Burden  (I  Ves  &  B.  170)    200, 
201.  384,  4.36,  439,  448 
Burdick  i;.  Green  (15  Johns.  247)  483 

Burdon  n.  Dean  (2  Ves.  Jr.  607)  479 

Burgan  v.  Lyell  (2  Mich.  102)  406 

Burgess,  In   re  (83   Me.   339,  22  Atl. 

222)  254 

V.  Atkins  (5  Blackf.  337)  338 

r.  Badger  (124  111.  288,  14  N.  E. 

850)  201,  222 

v.  Burgess  (3  DeG.  M.  &  G.  896)  242, 

243 

v.  Lane  (3  Me.  65)  70 

r.  Merrill  (4  Taunt.  469)  22 

Burgue  '•.  Finnin  (3  Stark.  53)  69 

Burk  '•.  McClain  (1  H.  &  McH.  233)     468 
Burke  V.  Fuller  (41  La.  Ann.  740,  6 

So.  557)  512,  522 

r.  Noble  (48  Pa.  168)  144 

c.  Roper  (79  Ala.  138)  52 

r.  Winkle  (2  S.  &  R.  189)  23 

Burleigh  v.  Parton  (21  Te.x  585)   173, 178 

V.  Stott  (8  B  &  C.  36)  157 

Burley  «-.  Harris  (8  N.  H.  235)  270, 271, 309 


Burmester  v.  Norris  (6  Ex.  706)  82 

Burn,  Ex  parte  (1  Jac.  &  \V.  378)     4W, 

493 

V.  Burn  (3  Ves.  578)  150,  151 

V.  Morris  (3  Cai.  54)  313,  317 

Burnell  v.  Hunt  (5  Jur.  650)  5,  55 

r.  Minot  (4  J.  B.  Moo.  340)  254,265. 

267,  268 
Burnes  v.  Penned  (2  H.  L.  C.  497)       obo 
Burnett  v.  Eufaula  Ins.  Co.  (46  Ala. 
11)  236 

V.  Snyder  (76  N.  Y.  344,  81  N. 

Y.  550)  104,  128 

Buruham  v.  Whittier  (5  N.  H.  334)     169, 

311 
Burnhisel  v.  Firman  (22  Wall.  170)  203 
Burns  v.  Harris  (67  N.  C.  140)  491 

r.  McKenzie  (23  Cal.  101)  ■  162 

V.  Nottingham  (60  III.  531)     261,  264 

v.  Rowlands  (40  Barb.  368)  77 

Burnside  y.  Merrick  (4  Met.  537)  349,356, 
361,  .364,  436 
Burr  V.  De  La  Vergne  ( 102  N.  Y.  415, 
7  N.  E.  366)  198 

r.  Williams  (20  Ark.  171)  160 

J  Burrell,  Ex  jxirte  (Cooke  B.  L.  503)    497, 

499 
Burson  v.  Kincaid  (3  Pen.  &  W.  57)  143 
Burt  V.  Lathrop  (52  Mich.  106,  17  N. 

W.  716)  52 

Burton,  Ex  parte  (1  G.  &  J.  207)  406,  494, 

495 

V.  Baum  (32  Kas.  641,  5  Pac.  3)   335 

V.  Goodspeed  (69  111  237)  46 

V.  Issitt  (5  B.  &  Aid  267)  145,  382 
196,  198, 
286,  287 
327,  328. 
329,  339 

Burwell  v.  Mandeville  (2  How.  560)     432. 

447,  451 
Bury  V.  Allen  (1  Coll.  589)  530 

Busby  V.  Chenault  (13  B.  Mon.  554)     446 
Bush  y.  Clark  (127  Mass.  HI)  438 

V.  Crawford  (9  Phila.  892)  170 

V.  Linthicum  (-59  Md.  344)  17 

Bushell,  Ex  parte  (8  Jur.  937)  180 

Butchart    r.    Dresser   (10   Hare  45-3, 
4  De  G.  M.  &  G.  542)         295,  376,  378, 
382,  383,  434 

V. (4  Russ.  430)  376 

Butcher,  Ex  parte  (13  Ch.  D  465)        442 

V.  Forman  (6  Hill  583)    25-3,  471,499 

Burler  v.   Amer.  Toy  Co.  (46  Conn. 
136)  27 

f.  Burleson  (16  Vt.  176)  441 

V.  Stocking  (8  N.  Y.  408)  185 

Butlin,  Er  parte  (Cooke  B.  L.  257)       487 
Butte   Hardware   Co.  r    Wallace  (59 

Conn.  3.36,  22  Atl.  330)  69 

Butterfield  v.  Hartshorn  (7  N.  H.  345) 

482 

V.  Hensley  (2  Gray  226)  77 

Button  V.  Hampson  (Wright  93)  150 

Butts  V.  Dean  (2  Met.  76)  483 


V.  Wookey  (6  Madd.  367) 

Burtus  V.  Tisdall  (4  Barb.  571) 


XXll 


TABLE   OF    CASES. 


Buxton  V.  Edwards  (134  Mass.  567)     160, 

162.  383 

V.  Lister  (3  Atk.  383)  209,  279 

Buzard  v.  First  Nat.  Bank  (67  Tex. 
83,  2  S.  W.  54)  60 

v.  Jolly  (6  S.  W.  422)  69 

Bybee  v.  Hawkett  ( 12  V.  R.  649)    13, 128 
Byers  v.  Dobie  (1  II.  Bl.  2o6)  469 

V.  Van  Ueusen  (5  Wend.  268)       462 

Byrd  v.  Fox  (8  Mo.  574)  11,  210,  265 


Cabell  V.  Vaughan  (1  Sannd.  291)  316,  320 
Caddeck  v.  Simpson  (2  De  G.  &  J.  52)  7 
Cadwallader  v.  Blair  ( 18  la.  420)     9U.  427 

V.  Kroesen  (22  Md.  200)  98,  147 

Cadv  1-.  Kyle  (47  Mo.  340)  165 

'v.  Shepherd  (11  Pick.  400)    150,  151, 

162 
Calder  v.  Rutherford  (1  Br.  &  B.  302, 

7  Moo.  158)  444 

Calder  &  H.  Nav.  Co  v.  Pilling  (14 

M.  &  W.  200)  551 

Caldicott  V.  Griffiths  (8  Ex.  898)     52,  277 
Caldwell   v.    Bloomington    Mfg.    Co. 
(17  Neb.  489,  23  N.  W.  336)  332 

v.  Gregory  (1  Price  119)  468 

V. (2  Hose  149)  494 

('.  Lawrence  (20  Ga.  94)  161 

V.  Lieber  (7  Paige  483)    36,  198,  200, 

201,216,217,384,520 

V.  Miller   (127  Pa.  442,  17  Atl. 

983)  44, 46 

V.  Scott  (54  N.  H.  414)  98,  332 

V.  Siffourney  (19  Conn.  37)  159 

r.  Sitliens  (5  Blackf.  99)  111 

V.  Stileman  (1  Rawle  212)  380 

Calkins  v.  Smith  (48  N.  Y.  614)  171, 180 
Callender  v.  Robinson  (96  Pa.  454)  74 

Calhimb  v.  Reed  (24  N.  Y,  505)  358 

Calvert  v.  Marlow  (6  Ala.  342)  260 

V.  Miller  (94  N.  C.  600)  435 

Calvit   r.   Markham    (3    How.    Miss. 

,343)  270, 514 

Cambefort  v.  Chapman  (19  Q.  B.  D. 

229)  334 

Camblat  v.  Tupery  (2  La.  Ann.  10)  280,  509 
Cambridge  v.  Hobart  (10  Pick.  232)  159 
Cameron  v.  Blackman  (39  Mich.  108)   140 

V.  Havemeyer   (25   Abb.   N.   C. 

438)  567 

Cammack  v.  Johnson   (1  Green  Ch. 

163 )         1 1 5,  29 1 ,  330,  344, 346,  444,  498 
Camp  V.  Gant  {21  Conn.  41)  476 

Campanari  v.    Woodburn   (15  C.   B. 

400)  387 

Campbell  v.  Bowen  (49  Ga.  417)  189 

V.  Pol.  Coal  &  Iron  Co.  (9  Col. 

60,  lOPac.248)  113 

V.  Coquard  (16  Mo.  App.  552)      527 

v.  Dent  (54  Mo.  325)  57 

r.  Flovd  (25  Atl.  10:«)    160,  378,  418 

V.  Hastings  (29  Ark.  512)        68,  463 


Campbell  v.  Mathews  (6  Wend.  551;    143 

V.  Mullett  (2  Swanst.  551)    230,  R07, 

327,  328,  338, 4S6,  468,  490,  500,  501 
V.  Pence  (118  Ind.  313,  20  N.  E. 

840)  170 

K.  Stewart  (34  III.  151)  86 

Canada  r.  Barksdale  (76  Va.  899)  35,  59 
Canadian  Bank  v.  Wilson  (36  U.  C. 

Q.  B.  9)  171 

Candler  v.  Candler  (Jac.  225)  15,  241 

(,. (0  Madd.  141)  55 

Canfield  r.  Hard  (6  Conn.  180)  36,432,447 
Cann  v.  Cann  (1  P.  Wms.  727)  511 

Cannan  v.  Bryce  (3  B.  &  Aid.  179)  9 

Cannon  v.  Alsbury(l  A.  K.  Marsh.  76)     21 

V.  Lindsey   (85  Ala.   198,  3  Ho. 

676)  97,  347 

Cape  Sable  Co.'s  Case  (3  Bland  606)    871, 

375,  459 
Capen  v.  Alden  (5  Met.  268)  425 

V.  Barrows  (1  Gray  376)  257,  258, 261 

Capp  V.  Lacey  (35  Conn.  463)  542 

Garden  v.  General  Cemetery  Co.  (5 

Bing.  N.  C.  253)  553 

Carev  v.  Burruss  (20  W.  Va.  571)  23 

Cargiil  r'.  Corby  (15  Mo.  425)  78,  82 

Carico  v.  Moore  (29  N.  E.  928)  110 

Carlen  v.  Drurv  (1  Ves.  &  B.  154)  267, 
457,  549,  553 
Carleton  v.  Jenness  (42  Mich.  110,  3 

N.  W.  284)  168 

Carlisle  r.  Mulhern  (19  Mo.  56)  364,  366 
Carlock  v.  Cagnacci  (88  Cal.  600,  26 

Pac.  597)  228 

Carlton  v.  Coffin  (28  Vt,  504)  159 

V.  Cummins  (51  Ind.  478)       529,  530 

V.  Ludlow  Woolen  Mill  (27  Vt. 

496)  161 

V. (28  Vt.  504)  160 

Carmichael  v.  Greer  (55  Ga.  116)  103,  463 

V.  Latimer  (11  R.  I.  395)  242 

Carpenter,  Ex  parte  (1  Mont.  &  McA.l)  489 
Camp  (39  La.  Ann.  1024,  3  So. 


269) 


519 
42 

247 

225 

7 

263,  264 


V.   Greenop  (74  Mich.  664 

N.  W.  276) 

V.  Lockhart  (1  Ind.  434) 

Carr  v.  Leavitt  (54  Mich.  540) 

V.  Smith  (5  Q.  B.  128) 

Carrie  v.  Clovcrdale  B.  &  C.  Co.  (90 

Cal.  84,  27  Pac.  58)  132,  231 

Carrier  v.  Cameron  (31  Mich.  373)  171 
Carrington  v.  Cantillon  (Bunb.  107)  14i\ 
Carroll  v.  Blencow  (4  Esp.  27)  2ii 

V.  Gayarre  (15  La.  Ann.  671)         160 

V.  Little  (73  Wis.  52,  40  N.  W. 

582)  529 

Carson  v.  Byers  (67  la.  606,  25  N.  W. 

826)  182 

V.  Gillitt  (50  N.  W.  710)  69 

Carter,  Ex  parte  (2  Glvn  &  J.233)  473,  499 

V.  Flexner  (17  S."  W.  851)  363 

V.  Galloway  (36  La.  Ann.  473)       333 

r.  Home  (1   Eq.  Ca.  Abr.  "Ac- 
count" 13)  196 


TABLE    OF    CASES. 


XXlll 


Carter  v.  Roland  (53  Tex.  540)      128,  389 

V.  Soiithall  (:'>  M.  &  W.  128)  164 

V.  Wluilley  (1  li.  &  Ad.  11)    104,  403, 

40  J,  410 
Carver  v   Dows  (40  III   374)  'JO 

Carver  (iiii  &  Macli.  Co.  v.  Bannon  (85 

Tenn  712,  4  S.  W.  831)  98,  332 

Carvick  /;.  Vickery  (Doug.  653,   Holt 

•207,  March  61)  38,  48,  168,  532 

Cary  v.  Williams  (I  Duer  607)  303 

Casey   Ai)eel(i  Paige  .303)  430 

V.  Beauregard  (00  U.  8.  110)         331, 

332,  442 

r.  Maxey  (6  Cal.  276)  255 

/'.  Seger  (4  Wash.  St.  492,  30  Pao. 

616)  7,  352 

Casebolt  o.  Ackerman  (46  N.  J.  1)  160 
Casey  v.  Brusli  (2  Caines  293)        262,  51!) 

V.  Carver  (41  III.  22-5)  07,  100 

Casli  V.  Tozer  (1  W.  &  8.  519)  1-55,  150 
Cassels  v.  Stewart  (0  App.  Cas.  64)      13J, 

193,  204 
Cassidy  v.  Hall  (97  N.  Y.  159)  61 

Castell,  Ex  parte  (2  Glyn  &  J.  124)     474. 

4'.)9 
Castle,  Ex  parte  (3  Mopt.  D.  &  D.  117)  493 
Caswell  u.  Cooper  (18  III.  532)  253,  255 
V.   Hazard   (121    N.   Y.   484.   24 

N.  E.  707)  238,243 

Cater  v.  Everleigli  (4  Des.  19)  363 

Catron  v.  Shepherd  (8  Seb.  308)  204 

Catskill  Bank  r.  Gray  (14  Barb.  479)      28 

u.  Messenger  (0  (^ow.  37)  143 

V.  Stall  (15  Wend.  304)  180,  185 

Catt  r.  Howard  (3  Stark.  5)  428 

Caudell  r.  Shaw  (4  T.  R.  361)  22 

Cavanaugh  v.  Riley  (19  S.  W  745)         65 

Cavitt  V.  .James  (39  Tex.  189) 

Cecil  ('.  Hicks  (29  Gratt.  1) 

Central  Bank  v.    Walker  (6G  N.  Y 

424) 
Central  Nat.  B;ink  v  Frye  (148  Mass. 

498,  20  i\.  E.  325)  170,  405 

Central   Trust    Co.    v.    Ohio   Central 

R.  R.  (36  F.  R.  520)  559 

Chadsev  v.  Harris  (11  111.  151)      262,  263, 

264 
Chadwick  v.  Clarke  (1  C.  B.  700)  246,  5-53 
(':hafEe  r.  Ludeling  (27  La.  Ann.  607)  50 
Chaffraix  v.  Lafitte  (30  La.  Ann.  631)  46, 

47 

r.  Price  (29  La.  Ann.  176)  60 

Chalfant  v.  Grant  (3  Lea  118)  351,  366 
Chalmers  v.  Bradlev  (1  .lac.  &  W.51)  514 
Chamberlain  v.  Dow  (10  Mich.  319)      3H7 

V.  M.idden  (7  Rich.  395)  76 

r.  Walker  (10  All.  429)  252,  253 

Chambers  v.  Clearwater  (1  Abb.  App. 

341)  119 

V.  Goldwin  (9  Ves.  2.54)         514,  515 

V.  Howell  (11   Beav.  6,  12  Jur. 

905)  437 

Champion  v.  Bostwick  (18  Wend.  175)    46, 

55,  66 
V.  Munford  (Kirby  172)  169 


381 
203 


50 


Champion  v.  Rigby  (1  Russ.  &M.  5.39)  514 
Champlin  v.  Tilley  (3  Day  307)  164 

Chandler,  Ex  parte  (9  Ves.  35)       478,  479 

c.  Brainard  (14  Pick.  285)  48 

V.  Herrick  (19  Johna.  129)  144 

V.  Jessup  (31  N.  E.  1109)  352 

V.  Parkes  (3  Plsp.  76)  22 

Chaimel  ('.  Fassit  (16  Ohio  166)  10,  128 
Cliannell   v.  Ditchburn    (5  M.   &   W. 

494)  157 

Chapin  v.  Coleman  (11  Pick  331)  69 

Chapline  «.  Conant  (3  W.  Va.  507)  46, 57, 

62 
Chapman  v.  Beach  (1  Jac.  &  W.  594)  455, 

456,  510 

V.  Koops  (3  B  &  P.  289)       250,  290, 

324,  33»,  475 

r.  Lipscomb  (18  S.  C.  222)        .      53 

V.  Thomas  (4  Keves  216)  376 

V.  Wilson  (1  Rob.  Va.  267)         5,  1U7 

Chappedelaine      v.     Dechenaux      (4 

Cranch  306)  511,515 

Ghappel  ;;.  Brockway  (21  Wend.  157)  401 
Chappell  r.  Allen  (38  Miss.  213)  378 

Chappie  «.  Cadell  (Jac.  537)  221,  510 

Charlton  v.  Poulter  (19  Ves.  148)      2»5, 

286,  292 
v.  Sloan   (76  la.  288,  41  N    W. 

303)  195 

Charman  v.  Henshaw  (15  Gray  293)  115 
Charrington  v.  Laing  (6  Bing.  242)  224 
Chase  r.  Barrett  (4  Paige  14«)     55,  60,  63 

V.  Bean  (58  N.  H.  183)  144 

V.  Buhl  Iron    Works  (55  Mich. 

139,  20  N.  W.  827)  98 

V.  Garvin  (19  Me.  211)  264,  266 

v.  Stevens  (19  N.  H.  465)  48 

Chavany  v.  Van  Sommer  (1  Swanst. 

512)  210,  285,  291,  371,  391,  395 

Chazournes  v.  Edwards  (,3  Pick.  5)  96, 100, 
116,  172,  173 
Cheap  V.  Cramond  (4  B.  &  Aid.  663)  35. 
40,41,  .55,  58,  143,  164 
Cheddick  v.  Marsh  (1  N.  J.  463)  225 

Cheeny  r.  Clark  (3  Vt.  431)  52,  82,  252 
Cheeseman  v.  Sturges  (9  Bosw.  246)  131 
Chenango,    Bank    of,   r.    Osgood    (4 

Wend.  607)  144 

('.  Root  (4  Cow.  126)  165 

Cheney  r.  Newberry  (67  Cal.  126,  7 

Pac. 445)  228 

Chenowith  i-.  Chamberlin  (6  B.  Mon. 

60)  184 

Cheshire  v.  Barrett  (4  McC.  241)  18 

Ches-son  v.  Chesson  (8  Ired.  Eq.  141)  512 
Chester  r.  Dickerson  (54  N.  Y.  1)  7,  35, 3t)7 

V. (52  Barb.  349)  116,  119 

Chesterfield  v.  Janssen  (2  Ves.  Sen. 

155)  514 

Chevalier,  Ex  parte  (1  Mont.  &  A. 

345)  487,  496 

Chicago  Gas  Light  &  Coke  Co.  r.  Peo- 
ple's Gas  Light  &  Coke  Co.  (121  111. 

530,  13  N.  E.  169)  567 

Chidney  v.  Porter  (21  Pa.  390)  107 


XXIV 


TABLE   OF    CASES. 


CJiild  V.  Hudson's  Bay  Co.  (2  P.  Wms. 

309)  551 

Chilton  V.  L.  &  C.  Ry.  (IG  M.  &  W. 

212)  551 

Chippendale  v.  Thurston  (4  C.  &  P. 

9«,  1  M.  &  M.  411)  158 

V.  Tomlinson  (Cooke  B.  L.  431)    441 

Chissum  v.  Dewes  (5  Kiiss.  29)  240 

Ciiittenden  v.  W'itheck  (50  Mich.  401, 

15  N.  \V.  526)  204,  236 

Chitty  V.  Naisli  (2  Dowl.  Pr.  511)  420 

Christ  V.  Firestone  (11  Atl.  395)  131 

Christian  v.  Ellis  (1  Gratt.  396)  508 

V.  Lenhouse  (19  Vt-s.  157)  298 

Christie,  Ex  parte  (8  Jur.  919)  183 

I'.  Bishop  (1  Barh.  Ch.  105)  69 

Chuck,  Ex  parte  (8  Buig.  469)    30,  55,  65, 

494 

Church  V.  Knox  (2  Conn.  514)      137,  291, 

325,  3.37,  345,  346,  446,  475 

V.  Sparrow  (5  Wetid.  223)  74,  89,  143 

Churton  v.  Douglas  (Johns.  174)  236,237 
Cincinnati,   H.  &  D.  R.  R.  v.  Spratt 

(2  Duv.  4)  65 

Cirkel    v.   Croswell   (36   Minn.   323, 

31  N.  W.  513)  103 

Citizens'  Ins.  Co.   v.  Kountz  Line  (4 

Woods  268)  65 

V.  Ligon  (59  Miss  305)   65,  168,  442, 

452 

V.  Wallis  (23  Md.  182)  479 

Citizens'  Nat.  Bank  v.  Hine  (49  Conn. 

236)  49,  427 
,:  Johnson  (79  la.  290,  44  N.  W. 

551)  134,  146 
V.  Williams   (128  N.  Y.   77,  28 

N.  E.  33)  331 

City  Bank  r.  Dearborn  (20  N.  Y  244)  408 

V.  McChesnev(20N.  Y.240)  408,411 

Claflin  c.  Behr  (89' Ala.  503,  8  So.  45)    476. 

487 

I'.  Bennett  (51  F.  R.  693)        97,  512 

V.  Ostrom  (54  N.  Y.  581)  95,  96 

Clagett  r.  Hall  (9  G.  &  J.  81)  516 

Claggett  r.  Kilbourne  (1  Black  346)  35 
Claiborne  v.  Creditors  (18  La.  501)      456, 

462 
Clancarty  v.  Latouche  (1  Ball  &  B. 

428)  518 

Claiicey  v.  Onondaga  Fine  Salt  Mfg. 

Co.  (62  Barb.  395)  568 

Clancy  v.  Craine  (2  Dev.  Eq.  363)  7 

Clap,  In  re  (2  Low.  226)  95 

Clapp  V.  Rogers  (12  N.  Y.  283)     405,  406, 

408 
Clark,  In  re  (3  D.  &  R.  260)  15 

V.  Allee  (3  Harr.  80)  344 

'•.  Barnes  (72  la.  563,  34  N.  W. 

419)  61,  62 

V.  Clement  (6  T.  R.  525)  144 

V.  Cullen  (9  Q.  B.  D.  355)  333 

o.  Gushing  (52  Cal.  617)  344 

V.  Dibble  (16  Wend.  601)       260,  265 

V.  Fletcher  (96  Pa.  416)  32,  409 

V.  Flint  (22  Pick.  231)  209 


Clark  V.  Hooper  (10  Bing.  480)  158 

V.  Houghton  (12  Gray  38)  77 

V.  Howe  (23  Me.  560)  312,  443 

V.  Huffaker  (26  Mo.  264)  163 

V.  Johnson  (90  Pa.  442)  140 

V.  Jones  (87  Ala.  474,  6  So.  362)     50 

!•.  Leach  (8  L.  T.  n.  s.  40)  213 

V.  Miller  (4  Wend.  628)  273 

V.  Reid  (11  Pick.  446)  48 

V.  Sidway  (142  U.  S.  682)  59 

V.  Sigourney  (17  Conn.  511)  159 

V.  Smith  (52  Vt.  529)  60 

V.  Taylor  (68  Ala.  453)       87,  89,  347 

V.  Van  Reimsdyk  (9  Cranch  153)  69 

V.  Wilson  (19  Pa.  414)  136 

V.  Worden  (10  Neb.  87)  527 

Clarke,  Ex  parte  (1  De  Gex  153)  488 

V.  Hogeman  (13  W.  Va.  718)         131 

r.  Imperial  Gas  Co.  (7  Bing.  95, 

4  B.  &  Ad.  315)  555 
V.  McAuliffe   (81   Wis.   104,  51 

N.  W.  83)  7 
V.  Mills  (36   Kas.  393,  13  Pac. 

569)  249 

V.  Richards  (1  Y.  &  C.  351)     36,  230 

V.  Slate   Valley   R.  R.  (136  Pa. 

408,  20  Atl.  562)  192 

V.  Tipping  (9  Beav.  282)  515 

V.  Wallace  (1  N.  D.  404, 48  N.  W. 

339)  83 

Clarke's  Appeal  (107  Pa.  436)  254 

Clarkson,  Ex  parte  (4  Deac.  &  Ch.  56) 

494 

V.  Carter  (3  Cow.  84)  273,  498 

Clay,  Ex  parte  (6  Ves.  833) 

V.  Cottrell  (18  Pa.  408) 

V.  Field  (34  F.  R.  375) 

V.  Freeman  (118  U.  S.  97) 


329,  478, 491 

88,  97,  172 

363 

433,  435, 

439 

69 

322 

132 


V.  Lanslow  (1  M.  &  M.  45) 

V.  Rufford  (8  Hare  281) 

Clayton  v.  Hardy  (27  Mo.  536) 
Clayton's  Case  (1  Mer.  572)  123,421,425, 

426,  522 
Cleather  v.  Twisden  (28  Ch.  D.  340)  121 
Clegg  V.  Fishwick  (1  McN.  &  G.  294)  204, 

300,  383 

V.  Houston  (1  Phila.  352)  491 

Cleghorn  v.  Ins.  Bank  of  Columbus 

(9  Ga.  319)  327 

Clement  v.   British  America  Assur. 

Co.  (141  Mass.  298,  5  N.  E.  847)        539 

V.  Brush  (3  Johns.  Cas.  180)    91,  92, 

150,  154 
V.  Clement  (69  Wis.  599,  35  N. 

W.  17)  160,  403 

V.  Ditterline  (11  S.  W.  658)  202,  508 

V.  Foster  (3  Ired.  Eq.  213)  510 

V.  Hadlock  (13  N.  H.  185)  4.5 

Clements  v.  Hall  (2  De  G.  &  J.  173)   204, 


V.  Jessup  (36  N.  J.  Eq.  569)   56, 

I'.  Norris  (8  Ch.  D.  129) 

Clemontson  v.  Blessing  (11  Ex.  135) 


383 
332, 
344 
192 
26 


TABLE    OF   CASES. 


XXV 


Cleveland  v.  Battle  (68  Tex.  Ill,  3  S. 

VV.  681)  480 

0.  Woodword  (15  Vt.  SO'i)  272 

Cleveland    Paj)C'r  Co.  v.  Courier  Co. 

(()7  Mich.  152,  34  N.  W.  65G)  28 

Clifford  V.  Brooke  (13  Ves.  131)  277 

Clift  V.  Moses  (112  N.  Y.  426,  20  N.  E. 

392)  98 

Clifton  V.  Howard  (89  Mo.  192,  1  S. 

VV.  2(3)  46,  53 

Clough  V.  Radcliffe  (1  l)e  G.  &  S.  164)  450, 

402 
Clowes,  Ex  parte  (2  Bro.  C.  C.  595)      428 

V.  Hawley  (12  Johns.  487)  305 

Coakley  v.  Weil  (47  Md.  277)  132 
Coate  V.  Williams  (9  C.  B.  481)  56 
Coates  V.  Coates  (6  Madd.  287)  217,  287 
Coats  V.  Ilolbrook  (2  Siuidf.  Cli.  580)  244 
Cobb  V.  Abbot  (14  I'ick.  289)  06,  124 
i;.  Cole  (44  Minn.  278,  46  N.  W. 

804)  512 

V.  111.  Cent.  R.  R.  (38  la.  601)       107 

V.  New    Enjfland    Ins.    Co.    (0 

Grav  192)  148 

Cobham,  Ex  parte  (1  Bro.  Ch.  576)  496 
Coiihran  v.  Anderson  Co.  Bank  (83 

Ky.  30)  115 
V.  Bartle  (91  Mo.  636,  3  S.  W. 

854)  52 

V.  Perry  (8  W.  &  S.  202)         11,  130, 

391 
Cochrane  v.  Allen  (58  N.  H.  250)  260 

Cock  V.  Bailey  (146  Pa.  328,  23  Atl. 

370)  538 
Cockburn  v.  Thompson  (16  Ves.  321)  553 
Cocke  V.  Branch  Bank  (3  Ala.  175)  82,  84 
17.  Bank  of  Tennessee  (6  Humph. 

51)  105,187 

Cockerell  v.  Aucompte  (2  C.  B.  n.  8. 

410)  62 

V.  Cholmeley  (1  Russ.  &  M.  425)  514 

Cocks  I'.  Nash  (9  Binjj.  341)  143 

Codding,  In  re  (9  F.  R.  849)  359,  300 

Coddington  v.  Hunt  (6  Hill  595)  400 

V.  Idell  (29  N.  J.  Eq.  504)  201 

V. (30  N.  J.  Eq   540)  527 

Coder  V.  Huling  (27  Pa.  84)  309 

Codman  v.  Rodgers  (10  Pick.  112)  518 
Coffee  u.  Brian  (10  J.  B.  Moo.  341,  3 

Bing.  54)  255,  256,  264 

Coffin  r.  Day  (34  F.  R.  687)  332 

V.  Jenkins  (3  Story  108)  61 

Coffin's  Appeal  (106  Pa.  280)  542 

Cofton  v.  Horner  (5  Price  537)  291 

Coggswell  V.  Davis  (05  Wis.  191,  26 

N.  VV.  557)  405 

Cogswell  V.  Wilson   (11   Ore.  371,  4 

Pac.  1130)  46,  51 

V. (17  Ore.  31,  21  Pac  388)  344 

Cohen  •-.  Gibbs  (1  Hill  S.  C.  206)  465 

V.  Hannam  (5  Taunt.  101)     318,  319 

V.  N.  Y.  Ins.  Co.  (50  N.  Y.  610)      26 

Coit  V.  Tracy  (9  Conn.  1)  159 

Colbeck,  Li  vp  (Buck  48)  40,  65 

Colburn  v.  Phillips  (13  Gray  64)  317 


Cole  V.  Albers  (1  Gill  412)  490 

V.  Pennell  (2  Rand.  174)  22 

V.  Pennoyer  (14  111.  158)  17 

V.  Reynolds  (18  N.  Y.  74)  307 

c.  Sackett  (1  Hill  516)  94,  483 

V.  Terry  (2  Dev.  &  B.  252)  304 

Coleman  v.  Coleman  (78  Ind.  344)  50 

V. (12  Rich.  183)  254 

V.  Darlmg  (00  Wis.  155,  28  N.  W. 

367) 

V.  Fobes  (22  Pa.  156) 

V.  Pearce  (26  Minn.  123, 1  N.  W. 

840)  125 

Coles  c.  Coles  (15  Johns.  159)        349,  367 

V.  Gurney  (1  Madd.  187)  145 

Collamer  v.  Foster  (26  Vt.  754)  252,  255 
Collender  v.  Plielan  (79  N.  Y.  366)  527 
Coller  V.  Porter   (88  Mich.  549,   50 

N.  W.  658) 
Colley  V.  Smith  (2  Moo.  &  R.  96) 
Collier  v.  Hanna  (71  Md.  253,  17  Atl. 

390) 

V.  Leech  (29  Pa.  404) 

V.  McCall  (84  Ala.    190,   4  So. 

307) 
Collingwood  v.  Berkeley  (15  C.  B.  n.  s 

145) 
Collins  V.  Barker  (1893,  1  Ch.  578) 


135 
160 


165 


99 
248 

480 
92 

121 


103 
293 
352 
143 
361,  362 
300 


V.  Decker  (70  Me.  23) 

V.  Prosser  (1  B.  &  C.  682) 

V.  Warren  (29  xMo.  230) 

V.  Young  (1  Macq.  385) 

CoUins's  Appeal  (107  Pa.  590) 
CoUner  v.  Greig  (137  Pa.  606,  20  Atl. 

938) 
Collumb  V.  Read  (24  N.  Y.  505) 
Coliver  V.  Collyer  (38  Pa.  257) 
Cohmghi  v.  Bluck  (8  C.  &  P.  464)  377,  388 
Colt  V.  WooUaston  (2  P.  Wms.  154)    277, 

455 
Colton  V.  Stanford   (82  Cal.  351,  23 

Pac.  16) 
Columbia  Land  &  Cattle  Co.  v.  Daly 

(46  Kas.  504,  26  Pac.  1042) 
Colwell  V.  Britton  (59  Mich.  350,  26 

N.  W.  538) 

V.  Lawrence  (38  Barb.  643) 

V.  Weybosset  Nat.  Bank  (16  R.  I. 

288,  15  Atl.  80,  17  Atl.  913)      182,  347, 
475,  476,  480 
Combs   V.  Shrewsbury   Ins.   Co.   (34 

N.  J.  Eq.  403)  235 

Commerce,  Bank  of,   v.   Meader  (40 

Minn.  325,  41  N.  W.  1043)      87,  89,  163 
Commercial  Bank  v.  Lewis  (l3  Sm.  & 

M.  226)  168,  180 

V.  Mitchell  (58  Cal.  42)  331 

V.  Warren  (15  N.  Y.  577)        173,  187 

V.  Wilkins  (9  Me.  28)     137,  320,  325, 

327,  339,  344,  346,  500 
Com.  V.  Bennett  (118  Mass.  443)  57 

Commonwealth,  Bank  of,  v.  Law  (127 

Mass.  72)  99,  187 

V.  Mudgett  (44  N.  Y.  514)  18? 

V. (45  Barb.  663)  411 


231 

350 
351 
505 


37 

543 

46 
469 


XXVI 


TABLE   OF   CASES. 


Compton  V.  Greer  (2  Dev.  Ch.  93)  615 
Coinstock  V.  Smitli  (23  Me.  302)  483 

Conant  v.  Frary  (19  lad.  530)       333,  3G5, 

360 
Condrey  v.  Gilliam  (60  Mo.  86)  305 

Conely   v.  Wood   (73   Mich.    203,   41 

N.  \V.  259)  83 

Conery  v.  Hays  (19  La.  Aun.  325)  103 
Congdon  v.  Morgan  ( 13  S.  C.  190)  167 
Conldin  v.  Barton  (43  Barb.  435)  60 

Conkiing  r.    Washington   University 

(2  Md.  Ch.  497)  61 

Conley  v.  Chapman  (74  Ga.  700)  334 

Connally  v.  Lyons  (82  Tex.  064)  562 

Connecticut  River  Bank  v.  Frencii  (6 

All.  313)  170 

Connelly  v.  Cheevers  (16  La.  130)  444 
Conner  v.  Abbott  (35  Ark.  365)  50 

Connolly  v.  Davidson  (15  Minn.  519)  66 
Conrad  V.  Buck  (21  W.  Va.  396)   160,  168, 

383,  893 
Conro   V.   Port   Henry  Iron  Co.  (12 

Barb.  54)  405,  407 

Consequa  v.  Fanning  (3  Johns.  Ch. 

587,  17  Johns.  511)  515 

Const  V.  Harris  (T.  &  R.  496)        188,  191, 

211,  294,  295,  29(5,  518 

Contee  v.  Dawson  (2  Bland  264)    219,  516 

Continental  Nat.  Bank  v.  Strauss  (32 

N.  E.  1066)  636,  540 

Converse  v.  Norwich  &  N.  Y.  Tr.  Co. 

(33  Conn. 166)  65 

V.  8hanibaugh  (4  Neb.  376)  69 

Conwell  V.  Sandidge  (8  Dana  278)       137, 

234,  326,  391,  443,  500,  531 

Cook,  Ex  parte  (2  P.  Wnis.  500)  329,  479, 

491 

, (8  Ves.  353) 

, (Mont.  228) 

V.  Beech  (10  Humph.  412) 


467 
474,  499 
312,  313, 

319 
5 

164 
439,  443, 


^ V.  Carpenter  (34  Vt.  121) 

V.  Castner  (9  Cush.  266) 

V.  Collingridge  (Jao.  607) 

467,  504,  509,  514,  523,  524,  531 

V.  Fowler  (L   R.  7  H.  L.  27)  203 

V.  Jenkins  (35  Ga.  113)  379 

V.  Penrhyn  Slate  Co.  (36  Oh.  St. 

136)  104,  409 

V.  Rogers  (3  F.  R.  69)  451 

Cooke  V.  Bachellor  (3  B.  &  P.  150)        320 

V.  Seeley  (2  Ex.  746)        91,  312,  316 

Cookingham  v.  Lasher  (2  Keyes454)    272 

y. (38  Barb.  656)  337 

Cookson  V.  Cookson  (8  Sim.  529)         357, 

467,  509 
Coombs  V.  Boswell  (1  Dana  473)  385 

Coomer  v.  Bromley   (5  De  G.  &  S. 

532)  116 

Coons  V.  Renick  (11  Tex.  134)  146 

Coope  V.  Bowles  (42  Barb.  87)       132,  135 

V.  Eyre  (1  H.  Bl.  37)     34,  53,  54,  7'-, 

89,  532 
Cooper,  Ex  parte  (1  Mont.  D.  &  D. 

358)  494 


119 

217 

402 
476 


Cooper  V.  Henderson  (6  Binn.  189)       465 

V.  McClarkan  (22  Pa.  80)       180,  187 

V.  Prichard  (11  Q.  B.  D.  351) 

V.  Watlinglon    (2    Chit.    451,    3 

Doug.  413) 
r.  Watson  (3  Doug.  443,  2  Chit. 

451) 
Cope's  Appeal  (39  Pa.  284) 
Copeland,  Ex  parte   (2   Mont.  &  A. 

177,  3  1).  &  Ch.  199)  133 

Coppard  r.  Page  (For.  1)  60 

Coover's  Appeal  (29  Pa.  9)  331,  345 

Corbett,  In  re  (5  Sawy.  206)  335 

V.  Poelnitz  (1  T.  R.  5)  22 

Corbin  r.  McChesney  (26  111.  231)  99 

Corey   v.  Cad  well  (86  JNlich.   570,  49 

N.  W.  611)  35,46,47,51,58 

V.  Perry  (67  Me.  140)  470 

Cork  &  B.  R.  R.  v.  Cazenove  (11  Q.  B. 

935)  20 

Cornells  v.  Stanhope  (14  R.  I.  97)  98,  308 
Cornhauser  v.  Roberts  (75  AVis.  554, 

44  N.  W.  744)  68,  103 

Cornwall  v.  Cornwall  (6  Bush  369)        360 

V.  Hoyt  (7  Conn.  420)  23 

Corpe  V.  Overton  (10  Bing.  252)  17 

Corps    V.  Robinson   (2   Wash.   C.  C. 

383)  164 

Corwin  v.  Suydam  (24  Oh.  St.  210)  87 
Cosio  V.  De  Bernales  (R.  &  M.  102)       310 

V. (1  C.  &  P.  266)  22.  24 

Coslake  v.  Till  (1  Russ.  376)  240,  441 

Costeker  v.  Horrox  (3  Y.  &  C.  530)       517 

Coster  V.  Clarke  (3  Edw.  Ch.  238)       349, 

352,  361,  362 

V.  Thomason  (19  Ala.  717)  187 

Cothay  v.  Fennell  (10  B.  &  C.  671)      272, 

317,  318,  498 

Cothran  v.  Knox  (13  S.  C.  496)  201 

V.  Marmaduke  (00  Tex.  370)     46,  60 

Cottle  V.  Leitch  (35  Cal.  434)  455 

Cotton  V.  Bettner  (1  Bosw.  430)  124 

V.  Evans  (1  Dev.  &  B.  Eq  284)     97, 

99,  100,  172,  173 
Cottrell  V.  Mfg.  Co.  (64  Conn.  122,  6 

Atl.  791)  237 

Cottrill  V.  Vanduzen  (22  Vt.  511)  77,  107 
Couch  V.  Mills  (21  Wend.  424)  144 

V.  Woodruff  (63  Ala.  466)  47 

Couchman  v.  Maupin  (78  Ky.  33)  331 
County  V.  Gates  (26  Mo.  315)  160 
Course  v.  Prince  (1  Mill  416)  248,  262,  263 
Coursen  v.  Hamlin  (2  Duer  513)  200 
Coursey  v.  Baker  (7  H.  &  J.  28)  169,  185 
Court  r.  Cross  (3  Bing.  329)  157 
Cousten  v.  Burke  (2  H.  &  G.  300)  255 
Cowan  V.  Burgess  (Cooke  58)  303 
V.  Creditors  (77  Cal.  403,  19  Pac. 

755)  335 

('.  Gill  (11  Lea  674)  442,  472 

V.  Iowa  State   Ins.   Co.    (40   la. 

551)  235 

V.  Kinnev  (33  Oh.  St.  422)  69 

Coward   r.  Clanton   (79  Cal.   23,   21 
Pac.  359)  7,  223 


TABLE    OF    CASES. 


XXVU 


Cowell  V.  Sikes  (2  Russ.  191)  330,  482 
Cowen  V.  Eurtlierly  Hardware  Co.  (11 

So.  lyu)  98 

Cowles  V.  Garrett  (30  Ala.  341)  127, 129,  3U2 
Cox,  Kx  parte  (1  Glyn  &  J.  355)  146 

V.  iimlfisli  (35  Me.  302)  553 

I).  Delano  (3  Dev.  8'J)  45,  4G,  03 

V.  iliekiiian  (  8  11.  L.  C.  268)     41,  05 

0.  Hubbard  (4  C.  B.  317)  109 

V.  Mcliiirney  (2  Sandf.  501)  350 

y.  Volkurt  (rfO  Mo.  505)  2:»2 

ij.  VVillougliby  (13  Ch.  J).  803)      213 

Crabtree  v.  May  ( 1  IJ.  Moii.  289)  10,  17,  20 

V.  Randall  (133  Mass.  552)  52/" 

Craft  V.  McConoughy  (79  111.  346)  9,  560 
Uragin  c.  Carleton  (21  Me.  41)2)  70 
V.  Gardner   (64    Mich.    399,    31 

N.  \V.  20(i)  333 

Craig  V.  Alverson  (0  J.  J.  Marsh  609)  163 

: V.  llulscliezer  (34  N.  J.  363)  274 

Cramer  r.  Baeiiniann  ((J8  Mo.  310)        201 

V.  Noonaii  (4  Wis.  231)  322 

Crane  v.  Ford  (Hopk.  114)  290 

('.  Frencli  (1  Wend.  311)         155,  3J3 

V.  Morrison  (4  Sawy.  138)  344 

Crater  v.  Binninger  (45  N.  Y.  545)  252 
Craven  v.  Kniglit  (2  Chan.  226)  49'.) 

V.  Widdows  (2  Ch.  Ca.  139)  200 

Crawford  v.  Austin  (34  Md.  49)  57 

V.  Bauni  (12  Ricii.  75)  345,  470 

V.  Collins  (45  Barb.  209)         109,  227 

V.  Hamilton  (3  Madd.  251)  399 

V.  Sterling  (4  Esp.  207)  185,  186 

Crawshay  v.  Collins  (15    Ves.  218,  2 

liuss.  342)     191,  200,  208,  212,  215,  240, 

241,  378,  394,  398,  434,  438,  440,  441, 

463,  400,  468,  501,  502,  501,  500,  509, 

523,  531 

V.  Maule  (1  Swanst.  495,  1  Wils. 

Ch.  181)  34,  127,  210,  294,  298,  299, 

371,  372,  378,  383.  388,  392,  390, 

398,  432,  434,  443,  448,  449,  459, 

463,  504,  531 

Creath  v  Sims  (5  How.  192)  417 

Credit-Mobilier  v.  Com.  (07  Pa.  233)     558 

Creel  c.  Bell  (2  J.  J.  Marsh.  309)  310,  317 

Cremer  v.  Higginson  (1  Mas.  338)         420 

Crescent  Ins.  Co.  v.  Bear  (23  Fla.  50, 

1  So.  318)  10,  345 

V.  Camp  (64  Tex.  521)  236 

Cribb  V.  Morse  (77  Wis.  322,  46  N.  W. 

120)  3.32 

Crisdee  v.  Bolton  (3  C.  &  P.  230)  224 

Crisp,  Ex  parte  (1  Atk.  183)  479 

, (Willes467)  479 

Crispe  v.  Perritt  (Willes  407,  1  Atk. 

133)  391, 464 

Crites  V.   Wilkinson  (65  Cal.   559,  4 

Pae.  567)  1.32 

Crocker  v.  Colwell  (46  N.  Y.  212)  170 

V.  Higgins  (7  Conn.  342)  469 

Crockett  V.  Grain  (33  N.  H.  542)  331,  336 
Croft,  In  re  (8  Biss.  188)  491 

■ V.  Pyke  (3  P.  Wms.  112,  180)       137. 

330,  475 


Crompton  v.  Conkling  (15  N.  B.  R. 

417)  469 

Cromwell  v.  County  of  Sac  (96  U.  S. 

51)  203 

Cronise  v.  Clark  (4  Md.  Ch.  403)  16 

Cronkhite  v.  llerrui  (15  F.  R.  888)  160 
Crooker  v.  Crooker  (46  Me.  250)  344,  369 

V. (52  Me.  207)  95,  470,  482 

Cropper  v.  Coburn  (2  Curt.  465)  344 

Crosbie  v.  Guion  (23  13eav.  518)  432 

Crosby  i;.  Timolat  (52  N.  W.  520)  271 
Cross  V.  Burlington   Nat.   Bank   (17 

Kas.  336)  3 

I'.  Cheshire  (7  Ex.  43)    25-5,  256,  259 

263,  264,  508 

V.  Jackson  (5  Hill  478)  2-58 

V.  Langley  (50  Ala.  8)  09 

Crossgrove  c.  Himmelrich  (54  Pa.  203J  09 
Crossley  v.  T<iylor  (83  Ind.  337)  248 

Crosthwait  v.  Ross  (1  Humph.  23)  82,  84 
Crottes  V.  Frigerio  ( 18  La.  Ann.  283)  228 
Crouch  V.  Bowman  (3  Humph.  209)     111, 

183 

V.  Emmerson  (3  Humph.  209)       182 

Croughton  v.  Forrest  (17  Mo.  131)  132 
Crowder,  Ex  ]>arte  (2  Vern.  706)  329 

Crowe  V.  Clay  (9  E.x.  004)  483 

Crowther  v.  Thorley  (32  W.  R.  330)    557, 

561 
Croxton,  Ex  parte  (1  De  G.  M.  &  G. 

600) 
Crozier  v.  Kirker  (4  Tex.  252)        112 
Cruess  i\  Fessler  (39  Cal.  330) 
Cruinless  v.  Sturgess  (6  Heisk.  190) 
Crusader,  The  (1  Ware  437) 
Cruttwell  V.  Lye  (17  Ves.  335)     236,  237, 

239,  440 

V. (1  Rose  123) 

Cullen  V.  Queensbury  (1  Bro.  C.  C. 

103) 
Cullum  V.  Bloodgood  (15  Ala.  34) 
Cumming  v.  Forrester  (1  M.  &  S.  497) 

V.  Hackley  (8  Johns.  202) 

Cummings  ('.  Howard  (03  Cal.  503) 

V.  Parish  (30  Miss.  412) 

V.  Powell  (8  Tex.  80) 

Cummings's  Appeal  (25  Pa.  268) 
Cummins  r.Cassily  (5  B.  Mon.  75)  150,  153 

V.  Cummins  "(8  Ired.  Eq.  723)        385 

Cumpston  v.  McNair  (1  Wend.  457)       37, 

58,59 
Cunliffe  v.  Dyerville  (7  R.  L  325)  201 
Cunningham  v.  Bragg  (37  Ala.  436)     3«() 

V.  Green  (23  Oh.  St.  296)  527 

V.  Gusliee  (73  Me.  417)  345 

V.  Littlefield  (1  Edw.  Ch.  101)      144, 

507,  508 

V.  Munro  (15  Grav  471)         383,  409 

V.  Ward  (30  W.  Va.  572,  5  S.  E. 

646)  333,  366 

V.  Woodbridge  (76  Ga.  302)  123 

Currier  r.  Cameron  (31  Mich.  373)  88 

V.  Rowe  (46  N.  H.  72) 

V.  Silloway  (1  All.  19) 

V.  Webster  (45  IS.  H.  226) 


207 
168 
237 
163 
01 


239 

553 
1.34 

318 
269 
203 
77 
17 
336 


252 

30 

252 


XXVIU 


TABLE   OF   CASES. 


Curry  v.  Fowler  (87  N.  Y.  33) 

V.  Kurtz  (33  Miss.  24) 

V.  Larer  (7  Barr  470) 

f.  Wliite  (51  Cal   obO) 

Curtis  V.  Belkuap  (21  Vt.  433) 


273, 


61 

163 
225 
IGU 
317, 
318 
53 
3 
496 

478 
152 
312 
103 

4(3 

489, 
497 
451 
6 
63 
164 

247 

22 
482 


V.  Cash  (84  N.  C.  41) 

V.  HoUingshead  (2  Green  L.  403) 

V.  Perry  (ii  Ves.  747)  494, 

V.  Woodward   (58   Wis.  499,  17 

N.  W.  328) 
Curtwel  V.  Brown  (5  Jones  263) 
Cusliing  V.  Marston  (12  Cusli.  431) 

V.  Smith  (43  Tex.  261) 

Cushnian  v.  Bailey  (1  ildl  526) 
Cust,  Ex  parte  (Cooke  B.  L.  548) 

Cuibush  V.  Cutbush  (1  Beav.  184) 
Cutler  V.  Thomas  (25  Vt.  73) 

V.  Winsor  (6  Pick.  335) 

Cutt  V.  Howard  (3  Stark.  3) 
Cutting  ?.'.  Daigneau  (151  Mass.  297, 

23  N.  E.  839) 
Cutts  V.  Gordon  (13  Me.  474) 
Cuxon  V.  Cliadley  (3  B.  &  C.  591) 


D. 


Dabney  v.  Stidger  (4  Sm.  &  M.  749)    165, 

187 
Dacie  v.  John  (McClel.  206,  13  Price 

446)  520 

y. (McClel.  575)  302 

Dages  1-.  Lee  (20  W.  Va.  584)  95 

Dailey  v.  Coons  (64  Ind.  545)  103 

• (.-.  Hall  (5  Bush  549)  57 

Dain  v.  Cowing  (22  Me.  347)  304 

Pakin  v  Demming  (6  Paige  95)  512 

V.  Graves  (48  N.  H  45)  255,  266 

V.  Williams    (17  Wend.  447,  22  . 

Wend.  201)  224 

Dale  V.  Hamilton  (5  Hare  369)       6,  7,  35, 

349 
Dalton  V.  Dalton  (33  Ga.  343)  55 

Dalton  City   Co.  i:  Hawes  (37  Ga. 

115)         '  62 

Daly  V.  Bradbury  (46  Minn.  396,  49 

N.  W.  190)  333 

Dame  v.  Kempster  (146  Mass.  454,  15 

N.  E.  927)  51 

Dana  v.  Lull  (17  Vt.  390)  134,  135 

V.  Stearns  (8  Cush.  342)  20 

Dance  r.  Girdier  (1  B.  &  P.  n.  s.  34)  315 
Danforth  r.  Corter  (4  la.  230)  163 

l^aniel  '■.  Cross  (3  Ves.  277)  419 

r.  Daniel  (9  B.  Mon.  195)  98, 99,  274, 

275,  337 

V.  Nelson  (10  B.  Mon.  316)  163 

V.  Owens  (70  Ala.  297)  344 

V.  Townsend  (21  Ga.  155)  331 

Daniel  Kaine,  The  (35  F.  R.  785)  66 
Daniels,  Petitioner  (14  R.  I.  500)  135 
V.  Hammond  (154  Mass.  165,  28 

N.  E.  12)  99 


Dann  v.  Spurrier  (7  Ves.  231) 
Darby  v.  Darby  (3  Drew.  495) 


349, 


V.  Gilligan   (33  W.  Va.  246,  10 

S.  E.  400) 
Darling.?,-.  Boston  &  C.  R.  R.  (11  All. 

295) 

V.  IMarch  (22  Me.  184)       97,  99, 

172,  174,  376, 
Darracott  v.  Penington  (34  Ga.  388) 
Darst  V.  Roth  (4  Wash.  C.  C.  471) 

Dart  V.  Walker  (3  Daly  136) 
Darthery  v.  Lee  (2  Y.  &  C.  5) 
Davenport  v.  Gear  (3  111.  495)       262, 

V.  Rackstrow  ( 1  C.  &  P.  89) 

V.  Runlett  (3  N.  H.  386)    96,  100, 

David  V.  Birchard  (53  Wis.  492,  10  N. 

W.  557) 
V.  Ellice  (5  B.  &  C.  196, 7  D.  &  R. 

690,  1  C.  &  P.  369)  94,  387, 415,  482, 
Davidson  v.  Bridgeport  (8  Conn.  472) 

r.  Robertson  (3  Dow  22!>) 

Davies  v.  Atkinson  (124  111.  474,  16 

N.  E.  899) 

V.  Games  (12  Ch.  D.  813)       360, 

V.  Hawkins  (3  Moo.  &  S.  488) 

272, 

V.  Hodgson  (25  Beav.  177) 

V.  Penton  (6  B.  &  C.  216) 

V.  Spurliug  (1  Tam.  199,  1  Russ. 

&  M.  64) 
Davis,  Estate  of  (5  Whart.  530) 

V.  Allen  (3  N.  Y.  168) 

V.  Berger  (54  Midi.  652, 20  N.  W. 

629) 

l:  Briggs  (39  Me.  304)  246, 

V.  Burton  (4  111.  41) 

V.  Christian  (15  Gratt.  11)    349, 

356,  362,  366,  367, 

I'.  Church  (1  W.  &  S.  240) 

V.  Coleman  (7  Ired.  424) 

v.  Cock  (14  Nev.  265) 

V.  Davis  (93  Ala.  173,  9  So.  736) 

V. (60  Miss.  615)      351,  352, 

V. (1  N.  &  McC.  290) 

V.  Delaware  &  H.  Can.  Co.  (109 

N.  Y.  47.  15  N.  E.  873) 

V.  Desauque  (5  Whart.  530) 

i:  Howell  (33  N.  J.  Eq.  72) 

V.  Keyes  (38  N   Y.  94)    387,  402, 

V.  Lane  (10  N.  H.  161) 

V.  Mason  (5  T.  K.  118) 

V.  Merrill  (51    Mich.  480,  16  N. 

W.  864) 

r.  Patrick  (122  U.  S.  138) 

V.  Smitli  (82  Ala.  198,  2  So.  897) 

V. (27  Minn.   390,   7  N.  W. 

731) 

V.  Sowell  (77  Ala.  262)  435, 

Davison  i^.  Holden  (55  Conn.  103,  10 

Atl.  575)  131, 

Dawes  v.  Head  (3  Pick.  128) 
Dawson  v.  Ward  (71  Tex.  72,  9  S.  W. 

106) 


492 
357, 
358 

332 

65 
165, 
3«0 

54 
150, 
151 
119 
514 
264 
109 
172 

332 

484 
483 
169 

332 
364 
258, 
554 
238 
225 

515 

381 
406 

148 
308 
151 
355, 
432 
443 
159 
139 
333 
508 
320 

331 
96 
476 
407 
460 
401 

247 

65 
364 

98 
436 

549 
468 

10 


TABLE   OF   CASES. 


XXIX 


Day  V.  Lafferty  (4  Ark.  450)  151 

V.  Lockwood  (24  Conn.  185)  202 

V.  McQuillan  (V.i  Minn.  205)         4(38 

V.  Stevens  (88  N.  C.  8;i)  53 

Dayton  v.  Bartlett  (88  Oil.  St.  357)       435 

V.  Wilkes  ( 17  How.  Pr.  510)     237, 238 

Deal  V.  Bogue  (20  Ta.  228)     320,  321,  325 

342,  343 
Dean  v.  Macdowell  (8  Ch.  D.  345)         198 

V.  New  hall  (8  T.  R.  1«8)  316 

I'.  Plunkett  (13G  Mass.  105)  115 

V.  Riclinioiid  (5  Pick.  401)  23 

Deane  i:  Hutchinson  (40  N.  J.  Eq.  83, 

2  Atl.  292)  344 

Dear,  Er  parte  (1  Ch.  1)  514)  444 

Deardorf  r.  Tliacher  (78  Mo.  128)     83,  84 
De   Herensjer   v.   Hammeli   (7  Jarm. 

Conv.  20)  45'5 

De  Berkora  v.  Smith  (1  Esp.  29)      37,  69, 

77,  81,  103,  107,  492 

De  Caussey  v.  Baily  (57  Tex.  005)       332, 

345 
Deckard  v.  Case  (5  Watts  22)       133,  135, 

153 
Decker  v.  Howell  (42  Cal.  63G) 
Decreet  v.  Burt  (7  Cash.  551) 
Deering  v.  Flanders  (49  N.  H.  225) 


57,84 

247 

406, 

407 

22 


Deerly  v.  Mazarine  (I  Salk.  116) 
Deeter   v.    Sellers     (102   Ind.   458,  1 

N.  E.  854)  97,  231 

Deford  r.  Reynolds  (36  Pa.  325)  405, 

407,  410,  411 
De  Gallou  r.  L'Aigle  (1  B.  &  P.  357)  23 
Degan  v.  Singer  (41  111.  28)  69 

De  Graura  v.  Jones  (23  Fla.  83,  6  So. 

925)  23 

Degroot  v.  Darby  (7  Rich.  117)     312,  313, 

319 
Deitz  ('.  Regnier  (27  Kas.  94)  84,  171 

De  Jarnette  v.  McQueen  (31  Ala.  230) 

182,  183,  253,  266,  268 
Deland  v.  Amesburv  Mgf.  Co.  (7  Pick. 

244)  '  416 

Delaney  v.  Hutcheson  (2  Rand.  183) 

349,  359,  364 

V.  Timberlake  (23  Minn.  383)  57 

Delano  v.  Blake  (11  Wend.  85)  18 

Delauney  v.  Strickland  (2  Stark.  416) 

35,  52 
De  Leon  v.  Trevino  (49  Tex.  88)  9 

De  Lizardi  v.  Gosset  (1  La.  Ann.  138) 

545 
Delmonico   v.    Guillaume   (2   Sandf. 

Ch.  336)  325,  349 

Dl-  Mautort  v.  Saunders  (1  B.  &  Ad. 

398)  271,  272 

De  Mazar  v.  Pvbus  (4  Ves.  644)  36 

Deming  v.  Colt  (3  Sandf.  290)  134,  135 
De  Montmorency  v.  Devereux  (1  Dru. 

&  VV.  119)  514 

Demoss  v.  Brewster  (4  S.  &  M.  661)  145 
Demott  V.  Swaim  (5  St.  &  P.  293)  162 
Denithorne   v.   Hook   (112    Pa.  240, 

3  AtL  777)  104 


Denman  v.  Dosson  (18  La.  Ann.  9) 

403,  407 
Deanery,  hi  re  (89  Cal.  101, 26  Pac.  639)  4 
Dennett  v.  Chick  (2  Me.  191)  76 

Dennis  v.  Green  (20  Ga.  386)  339 

Denny  v.  Cabot  (6  xMet.  82)     45,  46,  47,  78 

V.  Metcalf  (28  Me.  3»9)  270 

Denton  v.  Richmond  (1  Cr.  &  M.  734)  224 

c.  Rodie  (3  Camp.  493)  89,  181 

Denver  v.  Roane  (99  U.  S.  355)  201,  202 
De  Pusey  v.  Du  Pont  (1  Del.  Ch.  82)  219 
Dermani    v.    Home  Ins.  Co.  (26  La. 

Ann.  69)  235 

Descadillas  v.  Harris  (8  Me.  298)  483 

Desha  /•.  Sheppard  (20  Ala.  747)  200,  202 
Desher  v.  Holland  (12  Ala.  513)  317 

Despatch  Line  v.  Bellamy  Mtg.  Co. 

(12  N.  H.  234)  .     92 

DeTastet,  Ex  parte  (1   Rose  10,  17 

Ves.  247)  479 

, (1  Rose  323)  485 

V.  Bordenave  (Jac.  516)         286,  302 

(;.  Carroll  (1  Stark.  88)  142,  471 

V.  Shaw  (1  B.  &  Aid.  664)     246,  250, 

271  309 

Deval  V.  Burbridge  (6  W.  &  S.  529)   '  194 

Devan  v.  Fowler  (2  Paige  400)  287 

Devaynes  ('.  Noble  (1  Mer.  529)     320,  387, 

419.  421,  425,  426,  482,  522 

r. (2  Russ.  &  M.  495)     330,  445 

Devin  v.  Harris  (3  Greene  186) 
Devore  v.   Woodruff   (1   N.   D. 

45  N.  W.  701) 
Devoss  V.  Gray  (22  Oh.  St.  159) 
De  Wahl  v.  Braune  (1  H.  &  M.  178)       26 
Dewdney,  E.v  parte  (15  Ves.  499)  479 

Dewey  v.  Chapin  (156  Mass.  35,  30 

N.  E.  223) 

V.  Dewey  (35  Vt.  555) 

Dexter  v.  Arnold  (2  Sumn.  108) 

r. (3  Mass.  284) 

De  Zeug  v.  Bailey  (9  Wend.  336) 
Dial  V.  Agnew  (28  S.  C.  454,  6  S.  E. 

295) 
Dickenson  v.  Holland  (2  Beav.  310) 

V.  Lockyer  (4  Ves.  36)  385,  420 

Dickinson  >:.  Bold  (3  Desaus.  501)  213, 443 

V.  Dickinson  (29  Conn.  601)  503 

V. (25  Gratt.  321)  387 

V.  Granger  (18  Pick.  315)      261,  263, 

266,  522 

V.  Legare  (1  Desans.  537)       135,  508 

V.  Valpy  (10  B.  &  C  128)     12,  82, 104 

Dickson,  Ex  parte  (2  Mont.  &  A.  99)    485 

V.  Alexander  (7  Ired.  4)  142 

V.  Indianapolis  C  Mgf.  Co.  (63 

Ind.  9)  .385,  400 

Dietrichsen  v.  Cabburn  (2  Phil.  52) 

278  279 
Diggs  V.  Brown  (78  Va.  292)       352,' 360, 

366 
Dilk  V.  Keighlev  (2  Esp.  480)  16 

Dillon  V.  Brown  (11  Gray  179)  366 

Dilworth  u.  Mayfleld  (36  Miss.  40)      349, 

356,  367 


206 
143, 
204,  249 


438 
362 
512 
526 
143 

333 

514 


XXX 


TABLE   OF   CASES. 


Dim  on  V.  Hazard  (32  N.  Y.  65)       332,  401 
Dimoiid  V.   Henderson  (47   Wis.  172, 

2  N.  VV.  73)  199 

Dinham  v.  Bradford  (L.  R.  6  Ch.  519) 


Dinsniore  i'.  Dinsmore  (21  Me.  433) 
Disideri,  Re  (L.  K.  11  Eq.  242) 
Ditclibuni  d.  bpracklin  (5  Esp.  31) 


202 
159 
403 
U9, 
469 
170 
302 


Ditts  V.  Lonsdale  (49  Ind.  529) 
Divine  v.  Mitcluim  (4  B.  Mon.  488) 
Dix  c.  Mercantile  Ins.  Co.  (22  111.  272) 

230 

13,  55 

139 

60 

58 

55,  96,  97, 


V.  Otis  (5  Pick.  38) 

Di.xon  V.  Alexander  (7  Ired.  4) 

I'.  Cooper  (3  VVils.  40) 

Doak  V.  Swann  (8  Me.  170) 
Dob  V.  lialsey  (10  Johns.  34) 


126 


469 
129 


100,  173,  312 
Dobbin  v.  Foster  (1  C.  &  K.  323)  313,  388 
Dobbins  v.  Tatem  (25  Atl.  544)  372,  512 
Docker  (;.  Somes  (2  M.  &  K.  656)  123 

Dodd  V.  Bishop  (30  La.  Ann.  1178)       103 
Doddington  v.  Hallet  (1  Ves.  Sen.  497) 

66 
Dodds  V.  Rogers  (68  Ind.  110) 
Dodge  I'.  Dicas  (3  B.  &  Aid.  611) 
Dodgson,  Ex  parte  (Mont.  &  M.  445) 

V.  Bell  (5  Ex.  57)  24,  25 

V.  (5  Ex.  967)  130 

Doe  V.  Halme  (2  M.  &  R.  433)  165 

Doggett  I'.  Jordan  (2  Fla.  541)  6 

Dolman  v.  Orchard  (2  C.  &  P.  104)        77, 
107,  403,  407 
Dolph   v.  Troy  Laundry  Machinery 

Co.  (28  F.  R.  553)  566 

Dommett  v.  Bedford  (6  T.  R.  684,  3 

Ves.  149)  467 

Domville  v.  Solly  (2  Russ.  372)  517 

Donaghue  i'.  Gaffy  (53  Conn.  43,  2  Atl. 

397)  321 

Donaldson  v.   Kendall   (2   Ga.    Dec. 

227)  508 

V.  Williams  (1  Cr.  &  M.  345)         199 

Donelson  v.  Posey  (13  Ala.  752)    234,  235 
Doner  v.  Stauffer  (1  Pen.  &  W.  198)    137, 
325,  327,  331,  446,  500 
Doniphan  v.  Gill  (1  B.  Mon.  199)  92 

Donnally  v.  Ryan  (41  Pa.  306)  89 

Donnell  v.  Harshe  (67  Mo.  170)  53 

Doo  V.  Chippenden  (Abb.  Ship.)  272 

Dore  V.  Wilkinson  (2  Stark.  287)  124 

Doremus  v.  McC(.rmick,(7  Gill  49)      116, 
14.3,  144,  307 

V.  Selden  (19  Johns.  21-3)        253,  817 

Doty  V.  Bates  (11  Johns.  544)       112,  171, 

183 
Doiibledav  v.  Muskptt  (7  Ring.  110)  103 
Dougal  y.'Cowles  (5  Day  511)      111,  139, 

169 
Dougherty  v.  Van  Nostrand  (1  Hoff. 

Ch.  68)  196,  200,  237,  239,  240,  241, 

384,  440,  443,  531 

Douglas  V.  Horsfall  (2  Sim.  &  S.  184)  322 

V.  Winslow  (20  Me.  89)  325,  338,  344 


Dounce  ('.  Parsons  (45  N.  Y.  180) 
Dow  IK  Phillips  (24  111.  249) 
V.  Sayward  (12  N.  II.  271) 


128 

170 

78,  86, 
338 
291 
435 
248 


V. (14  N.  II.  9) 

Dovvd  V.  Troup  (57  Miss.  204) 
Oovvling  V.  Clarke  (13  R.  I.  134) 
V.  Exchange   Bank    (145  U.   S. 

512)      . 
Downer  v.  Whittier  (144  Mass.  448) 
Downhara  v.  Matthews  (I  Ves.  Sen. 

497) 
Downing  v.  Linville  (3  Bush  472) 
Downs  V.  Collins  (6  Hare  418)      127,  447, 

450 

V.  Gazebrooke  (3  Meriv.  200)        514 

V.  Jackson  (33  111.  404)  269,  376 

Dowzelot  V.  Rawlings  (58  Mo.  75)  103 

Doyle  V.  Bailey  (75  111.  418)  508 

Drake  v.  Elwyn  (1  Caiues  184)         6,  110, 

169 

V.  Hill  (53  la.  37) 

Moore  (66  la.  58,  23  N.  W 


84 
203 

210 

97 


95 


263) 


350 
61 
136 
132 
144 


Ramey  (3  Rich.  37) 

V.  Rogers  (6  Mo.  317) 

I'.  Thvng  (37  Ark.  228) 

Dran  ?-.  Nc-whall  (8  T.  R.  168) 

Dreher  v.  ^.tna  Ins.  Co.  (18  Mo.  128)  230 

Drennan  r.  London  Assur.  Corp.  (20 

F.  R.  657)  235 

Drennen  v.  House  (41  Pa.  30)  103 

Drew  V.  Person  (22  Wis.  651)  200 

i;.  Power  (1  Sch.  &  L.  182)  515 

Drewry  v.  Montgomery  (28  Ark.  256)  354 
Driver  v.  Burton  (17  Q.  B.  989)  312 

Drucker  v.  Wellhouse   (82   Ga.    129, 


8  S.  E.  40) 
Drumrigiit  v.  Philpot  (16  Ga.  424) 


480 
151, 

152 
295 


41,  45,  55 
315 


20 
271 

532 


Drury  v.  Roberts  (2  Md.  Ch.  157) 
Dry  V.  Boswell  (1  Camp.  329) 

I'.  Davy  (10  A.  &  E.  30) 

Dublin  &  W.  R.  R.  v.  Black  (8  Ex 

181) 
Dubois  v.  Ludert  (5  Taunt.  609) 

V.  Roosevelt  (4  Johns.  262) 

Dubois's  Appeal  (38  Pa.  231)         139,  154 
Dubos  V.  Hoover  (25  Fla.  720,  6  So. 

788)  58 

Du  Bree  v.  Albert  (100  Pa.  483)  350 

Duckworth  v.  Alison  (1  M.  &  W.  412)  224 

V.  Trafford  (18  Ves.  283)  297 

Dudley  v.  Littlefield  (21  Me.  418)  35, 180, 

349 
Duff  V.  Baker  (78  la.  642,  43  N.  W. 

463)  403 
V.  East  India  Co.  (15  Ves.  198)    144, 

385 

V.  McGuire  (99  Mass.  300)       57,  248 

Duhring  v.  Duhring  (20  Mo.  174)  349, 
358,  362,  364,  366 
Dulles  V.  De  Forest  (19  Conn.  190)  426 
Dumas  v.  Jones  (4  Mass.  647)  318.  319 
Dumont  v.  Ruejjprecht  (38  Ala.  175)    454 


TABLE    OF   CASES. 


XXXI 


257 
47G 
2U7 
8 
45,  102 


Dunbar  v.  Lane  (1  Bro.  P.  C.  3)  515 

Duncan  i\  Clark  (2  Rich.  587)  180 

V.  Lewis  (1  Duv.  183)  87 

u.  Lowndus  ('i  Camp.  478)  185 

V.  Lyon  (3  Johns.  Ch.  351)   252,  257, 

2t)7,  507 

V.  Worrall  (10  Price  31)  289 

Dunihass  v.  Gallajjher  (4  Barr  205)        184 
Duniiani  v.  Gillis  (8  Mass.  4G2) 

V.  Hanna  (18  Ind.  270) 

V.  Jar  vis  (8  Barb.  88) 

.  Presby  (120  Mass.  285) 

V.  Rogers  (1  Barr  255) 

V.  Shindler  (17  Ore.  256,  20  Pac. 

320)  333 

Dunlap  V.  Limes  (49  la.  177)  168 

V.  McNeil  (35  Ind.  316)  429 

V.  Watson  (124  Mass.  305)     202,  527 

Dunlop  V.  Gregory  (10  X.  Y.  241)  402 

Dunman  v.  Coleman  (59  Tex.  199)        333 
Dunn  V.  Lee  (1  J.  B.  Moo.  2) 
Dunnica  v.  Clinkscales  (73  Mo.  500) 
Dunning's  Appeal  (44  Pa.  150) 
Dunton  v.  Brown  (31  Mich.  182) 
Dupierris  v.  Hallisay   (27  La.  Ann. 

132) 
Dupuy  V.  Johnson  (1  Bibb  502) 

V.  Leavenworth  (17  Cal.  262) 

V.  Sheak  (57  la.  3tJl) 

Durant  i:  Abeiidrotli  (69  N.  Y.  148) 
V.  Rhener  (26  Minn.  362,  4  N.  VV. 

610) 
Durbin  i-.  Barber  (14  Olno  311) 
Durham  r.  Hartlett  (32  Ga.  22) 
Duryea  v.  Burt  (28  Cal.  569) 
Duryee  v.  Elkins  (1  Abb.  Adm.  529) 
Dutton  V.  Morrison  (17  Ves.  193) 

290,  391,  463,  465,  468,  470,  475,  503 

V.  Woodman  (9  Cush.  255)  164 

Duvergier  v.  Fellows  (5  Bing.  248,  10 

B.  &  C.  826)  550,  554,  556 

D wight  V.  Brewster  (1  Pick.  50)    124,  142 

V.  Hamilton  (113  Mass.  175)         236, 

238 

Dwinel  *•.  Stone  (30  Me.  384)        6,  46,  55 

Dyer  v.  Clark  (5  Met.  562)     137,  349,  350, 

351,  353,  354,  356,  358,  361,  362,  363, 

364,  369,  399,  432,  434,  436,  521,  522 

Dyke  v.  Brewer  (2  C.  &  K.  828)       12,  73, 

139,  427 
Dyster,  Ex  parte  (2  Rose  256)  494 


E. 


Eager  v.  Crawford  (76  N.  Y.  97)  61 

Eagle  V.  Bucher  (6  Oh.  St.  295)  394 

Early  v.  Reed  (6  Hill  12)  185 

Eason  v.  Cherry  (6  Jones  Eq.  261)  194 

East  India  Co.  r.  Blake  (Finch  117)  224 

V.  Vincent  (2  Atk.  83)  492 

Eastburn  v.  Kirk  (1  Johns.  Ch.  444)  292 
Eastman  v.  Clark  (53  N.  H.  276)  44,  46,  57 

V.  Cooper  (15  Pick.  276)  147 

V.  Foster  (8  Met.  19)  485 


269 

488 

542 

17 

165 
269 
350 
23 
539 


456 

529 

58 

60 

154 


Eastman  v.  Wright  (6  Pick.  316)  142,  270. 

307,  312 
Easton  *•.  Courtwright  (84  Mo.  27)  364 
V.  Strother  (57  Ga.  506, 10  N.  W. 

877)  204 
Eastwood  V.  Brown  (1  Ry.  &  M.  312)  493 
Eaton  V.  Boissoncault  (67  Me.  540)  203 
V.  Walker    (76    Mich.    579,    43 

N.  W.  638)  50 

Ebbert's  Appeal  (70  Pa.  79)  6,  359 

Eccleston  v.  Clipsham  (1  Saund.  153)  207, 

216,  257 
Eddie  v.  Davidson  (1  Doug.  650)  137,  446, 

475 
Edgar  v.  Donnally  (2  Munf.  387) 

V.  Fowler  (3  East  222) 

Edger  v.  Knapp  (6  Scott  N.  R.  707) 


360 
269 
255, 
269 
18 


Edgerly  v.  Shaw  (25  N.  H.  514) 
Edison   Electric  Bluminating  Co.   v. 

De  Mott  (25  Atl.  952) 
Edmiston  v.  Wright  (1  Camp.  88) 
Edmondson  v.  Davies  (4  Esp.  14) 
Edmund  v.  Caldwell  (15  Me.  340) 
Edmunds  v.  Bushell  (L.  R.  1  Q.  B 

97) 
Edmundson  v.  Thompson  (2  F.  &  F. 

564) 

r.  (31  L.  J.  Ex.  207) 

Edwards  v.  McFall  (5  La.  Ann.  167) 

c.  Meyrick  (2  Hare  60) 

c.  Parker  (88  Ala.  356, 6  So  684)  347 

V.  Remington   (51    Wis.   336,  8 

N.  W.  193) 

c.  Thomas  (66  Mo.  468) 

V.  Tracy  (62  Pa.  374) 

Egbert  v.  Kimberly  (23  Atl.  437) 
Egberts  v.  Wood  (3  Paige  517)     135,  136, 
327,  436,  464,  468 
Ehle  V.  Purdy  (6  Wend.  629)  316 

Eichel  V.  Sawyer  (44  F.  R.  845)  68 

Eighth  Nat.  Bank  v.  Fitch  (49  N.  Y. 

539) 
Finer  v.  Beste  (32  Mo.  240,  39  Mo. 

69) 
Elder  V.  Hood  (28  111.  538) 
Elderkin  r.  Winne  (1  Chandl.  27) 
Electric  Tel.  Co.  of  Ireland,  In  re  (22 

Beav.  471) 

Elgie  V.  Webster  (5  M.  &  W.  518)  5,  252, 

507 
Elkin  V  Green  (13  Busli  612) 
Elkinton  v.  Booth  (143  Mass.  479) 
Ellicott  V.  Nichols(7  Gill  85) 
Elliot  V.  Davis  (2  B.  &  P.  838) 
Elliot's  Appeal  (60  Pa.  161) 
Elliott  V.  Brown  (9  Ves.  597) 

i\ (3  Swanst.  489)  288, 

v.  Dudley  (19  Barb.  326)  97,  99,  172, 

173 

V.  Dvcke  (78  Ala.  150)  367 

V.  Holbrook  (33  Ala.  659)  144 

V.  Sleeper (2  N.  H.  525)  483 

^^  Stevens  (38  N.  H.  311)  340 

Ellis,  Ex  parte  (2  Glyn  &  J.  312)    473,  499 


497 
147 
125 
317 

115 

103 
104 
409 
514 


254 

432 

57,69 

539 


345 

134 
251 

70 

371 


427 
409 
160 
154 
236 
436 
377 


xxxu 


TABLE   OF   CASES. 


Ellis  V.  Allen  (80  Ala.  515,  2  So.  670) 
131,  132, 

V.  Bronson  (40  111.  445)  403, 

V.  Ellis  (47  N.  J.  69) 

V.  Jameson  (17  Me.  235) 

c.  Watson  (2  Stark.  453) 

Ellison  V.  Chapman  (7  Blackf.  224) 

V.  Dezell  (1  Sel.  N.  P.  385) 

V.  Lucas   («7  Ga.  223,   13  S.  E. 

445) 

V.  Moffat  (1  Johns.  Ch.  46) 

c.  Sexton  (105  N.  C.  356,  11  S.  E. 

180) 
EUston  u.  Deacon  (L;  R.  2  C  P.  20) 
Ellsworth  V.  Tartt  (26  Ala.  733) 
Elmer  r.  Hall  (28  Atl.  971)  248, 

Elmira  I.  &  S.  R.  M.  Co.  v.  Harris  (124 

N.  Y.  280,  26  N.  E.  541 )        32,  408, 
Elton,  Ex  parte  (3  Ves.  238)  329,  477, 

Elverson  v.  Leeds  (97  Ind.  3-36) 
Emanuel  v.  Bird  (19  Ala.  596) 

V.  Draughn  (14  Ala.  303) 

Emberson  v.  McKenna  (16  S.  W.  419)  61 
Emerick   v.   Moir   (124  Pa.   498,   17 

Atl.  1) 
Emerson  v.  Harmon  (14  Me.  271)  142, 

V.  Knower  (8  Pick.  63)  152, 

V.  Senter  (118  U.  S.  3) 

Emery  v.  Wilson  (79  N.  Y.  98) 
Emly  V.  Lye  (15  East  7)  89, 

Emmet  v.  Butler  (7  Taunt.  599) 
Enderby,  Ex  parte  (2  B.  &  C.  389) 

England  v.  Curling  (8  Beav.  129)  193, 

211, 

V.  England  (1  Baxt.  108) 

England,  Bank  of.  Ex  parte  (2  Rose 
82)  487, 

Englis  V.  Furniss  (4  E.  D.  Smith  587) 

271, 
English  Society,  Tn  re  (1  H.  &  M.  85) 
Ennis  v.  Williams  (30  Ga.  691) 
Ensign  v.  Wands  (1  Johns.  Cas.  171) 

53,  81, 
Ensminger  v.  Marvin  (5  Blackf.  210) 
Entwisle  v.  Mulligan  (12  Atl.  766) 
Espy  V.  Comer  (76  Ala.  501)     160, 

Essex  V.  Essex  (20  Beav.  442)        357, 
Estabrook  v.  Messersmith  (18   Wis. 
545) 

r.  Smith  (6  Grav  570) 

Estes  r.  Whipple  (12  Vt.  373)        246, 
Estwick  V.  Conningsby  (1  Vern.  118) 

300,  302, 
Etheridge  v.  Binney  (9  Pick.  272)  74, 

143,  170, 
Etnyre  r.  McDaniel  (22  111.  201) 
Eubanks  v.  Peak  (2  Bail.  497) 
Eustis  V.  Bolles  (146  Mass.  413,   16 

N.  E.  286) 
Evans  v.  Bennett  (1  Camp.  303) 
V.  Bicknell  (6  Ves.  174)  276, 


78, 
193 
409 
155 
70 
69 
257 
152 

332 
512 

405 

lOU 

66 

346 

409 
478, 
491 
405 
446 
58 
8,69 

223 
143, 
180 
307 
136 
255 
181 
407 
493, 
494 
209, 
456 
62 

496 
270, 
307 
65 
403 
37, 
532 
171 
105 
361, 
364 
358 

391 
311 
258 

294, 
436 

114, 

171 

203 

18 

403 
316 
512 


Evans  v.  Biddleman  (3  Cal.  435)  88 

V.  Bryan  (95  N.  C.  174)  98,  525 

r.  Corriell  (1  Greene  25)  69 

V.  Drummond  (4  Esp.  89)   69,  73,  95, 

387,  409,  416,  482,  484,  485 

V.  Evans  (9  Paige  178)  300,  434,  437, 

443,  504,  531 

V.  Gibson  (29  Mo.  223)  354,  364 

V.  Silverluck  (1  Peake  21)      275,  312 

r.  Wells  (22  Wend.  325, 20  Wend. 

251)  180 

V.  Winston  (74  Ala.  349)  475 

V.  Yeatherd  (2  Bing.  133)       254,  267 

Everard  v.  Heme  (Litt.  191)  143 

Everet  v.  Williams  (1  Lind.  Part.  93)  9 
Everett  v.  Coe  (5  Den.  180)  45,  46 

r.  Stone  (3  Storv  446)  470 

Everhart's  Appeal  (100  Pa.  349)  6 

Everit  v.  Strong  (5  Hill  163,  7  Hill 

585)  134,  153 

i:  Watts  (10  Paige  82)  23 

Everitt  v.  Chapman  (6  Conn.  347)  6,  53, 
74,  102,  229 
Evernghim   v.   Ensworth    (7   Wend. 

326)  97,  178 

Ewing  V.  French  (1  Blackf  353)  317 

V.  Osbaldiston  (2  My.  &  Cr.  53)    8,  9 

Exchange   Bank   v.   Tracy   (77   Mo. 

594)  432,  451 

V.  White  (30  F.  R.  412)  83,  87 

Evrich   v.   Capital    State   Bank   (67 

'iMiss.  60,  6  So.  615)  347 


F. 


Fagely  v.  Bellas  (17  Pa.  67) 
Faikney  v.  Reynous  (4  Burr.  2069) 
Fail  r.  McRee  (36  Ala.  61) 
Fairburn  v.  Pearson  (2  McN.  &  G. 

144) 
Fairchild  v.  Fairchild  (64  N.  Y.  471) 

V.  Holly  (10  Conn.  184)  421,423, 

Fairland  v.  Percy  (L.  R.  3  P.  &  D.  217) 
Fairthorne  v.  Weston  (3  Hare  387) 

457, 
Faith  V.  Richmond  (11  A.  &  E.  339) 

111, 
Falkland  v.  Cheney  (5  Bro.  P.  C.  476) 
Fall    River   Whaling  Co.  v.  Borden 

(10  Cush.  458)   7,  35,  349,  350,  353, 

Fancher  v.  Bibb  Furnace  Co.  (80  Ala. 

481,  2  So.  268)  148, 

Fanning  v.  Cliadwick  (3  Pick.  420) 

261,  263, 
Fanshawe  t'.  Lane  (16  Abb.  Pr.  71) 
Farber  v.  Granard  (4  B.  &  P.  80) 
Fargo  I'.  Ames  (45  la.  491) 
Farina  v.  Silverlock  (1  De  G  &  J.  434) 
Farley  v.  Moog  (79  Ala.  148)        344, 
Farlovv,  Ex  parte  (1  Rose  421) 
Farmer  v.  Russell  (1  B.  &  P.  296) 
Farmers'  Bank  v.  Bay  less   (35  Mo. 

428) 


154 

9 

53 

294 
350 
425 
563 
294, 
510 
110, 
112 
188 

354, 
356 

308 
260, 
266 
542 
23 
98 
244 
436 
468 
269 

181 


TABLE    OF    CASES. 


XXXlll 


Farmers'  Bank  v.  Bayliss  (41  Mo.  274)   89, 

181 

V.  Clarke  (4  Leifjh  603) 

V.  Green  (30  N.  J.  316) 

V.  liitter  ( 12  Atl.  Gu'J) 

c.  Smith  (20  \V.  Va.  641) 

Farmers'  Ins.  Co.  v.  Ross  (29  Oh.  St 

429) 
Farnam  v.  Boutelle  (13  Met.  159) 
Farnliam  v.  Bro.)k.s  (9  Pick.  212) 
Farniim,  /;(  re  (6  Law  Kep   21) 

V.  I'atch  (tiO  N.  IL  294) 

Farr  v.  Johnson  (25  111.  522) 

V.  I'earce  (3  Madd.  74)  241,242,440, 

441 

V.  Smith  (9  Wend.  338) 

Farrant  r.  Ohiiius  (3  B.  &  Aid.  692) 
Farrar  v.  Beswick  (1  M.  &  W.  (585) 

V. (1  M.  &  \i.  527) 

V.  Deflinne  (1  C.  &  K.  580) 

V.  Ilutciiinson  (9  A.  &  E.  641) 

142,  178,  179 
Farrington  v.  Harrison  (44  N.  J   Eq. 

232,  10  Atl.  105) 
Farwell  r.  Metcalt  (63  N.  H.  276) 
r.  St.  Paul  Trust  Co.  (45  Minn. 

495,  48  N.  \V.  326) 
Faulkner  v.  Bailey  (123  Mass.  588) 

V.  Wiiitaker  (3  Green  L.  438) 

Fawcett  v.  Osborn  (32  111.  411) 

V.  Wliitehouse  (1  K.  &  M.  132) 

Fay  V.  Davidson  (13  .Minn.  523) 

V.  Noble  (7  Cush.  188) 

Fayette  Nat.  Bank  v.  Kenney  (79  Kv. 

123)  47"7, 

Fearns  v.  Young  (9  Ves.  549)         443, 
Featiierstone  v.  Hunt  (IB  &  C.  113)  387. 

418 
Featherstonhaugh    v.    Fenwick    (17 

Ves.   298)   196,  204,  212,  240,  372,  373, 

384,  388,  392,  394,  443,  467,  504,  509,  531 

. f.  Turner  (25  Beav.  382)  530 

Feigley  v.   Sponeberger  (5  W.  &  S. 

464) 

V.  Whitaker  (22  Oh.  St.  606) 

Felichy  i'.  Hamilton  (1   Wash.  C  C. 

491) 

Fell,  Ex  parte  (10  Ves.  347)  326,  .328,  338, 

490,  493,  494 

Fellows  V.  Wyman  (.33  N.  H.  351)        378, 

381   382 
Felton  V.  Deall  (22  Vt.  170)  '    (52 

Fenn  i'.  Bolles  (7  Abb.  Pr.  202)  243 

0.  Craig  (3  Y.  &  C.  216)  322 

V  Timpson  (4  E.  1).  Smitli  276)      69 

Fennings  i;.  Grenville  (1  Taunt.  241)  303, 

304 
Fenton  v.  HoUoway  (1  Stark.  126)  27 
Fereday  v.  Hordern  (Jac.  144)  52 

I'.  Wightwick  ( 1  Tam.  2.50)    -34,  443, 

502,  503,  504,  531 

V. (1  R.  &  M.  45)  364 

Fereira  i:  Sayres  (5  W.  &  S.  210)  383 

Ferguson  v.  Baker  (116  N.  Y.  257,  22 

N.  E.  400)  254 


159 

412 

136 

49 

53,  58 
425 
514 

487 

49 

232 


303 
224 
303 
234 
409 
97, 


512 


98 

159 

3 

60 
196 

66 

50 

487 
.501 


79 
162 


54 


Ferguson  v.  Bell  (17  Mo  347) 

V.  Hanauer  (19  S.  W.  749) 

Fern  r.  Cusliing  (4  Cush.  357) 
Fernald  u.  Clark  (is4  Me.  234,  24  Atl. 

823) 
Ferris  v.  Burrows  (.34  Hun  104) 

V.  Myrick  (44  N.  Y.  315) 

Ferry  v.  Henry  (4  Pick.  75)  47, 

Fessler  v.  Hickerneli  (82  Pa.  150) 
Feucht  r.  Evans  (52  Ark.  217) 
Fichtliorn  v.  Boyer  (1  Watts  159) 
Fickett  r.  Switt  (41  Me.  65) 
Fidgeon  v.  Sliarp  (1  Marsh.  198) 

Field  V.  Carr  (5  Bing.  13) 

V.  Clark  ( t  Ves.  396) 

V.  Crawford  (6  Gray  116) 

u.  Holland  (6  Cranch  8) 

Fielden  v.  Lahens   (9  Bosw.    436) 

Fife,  Ex  parte  (2  Mont.  &  A.  577) 
Fifth  Ave.  Bank  r.  Colgate  (120  N.  Y. 

381,  24  N.  E.  799) 
Figes,  Ex  parte  (1  Glyn  &  J.  122) 

V.  Cutler  (3  Stark.  139)  11, 

Figgins  V.  Ward  (2  C.  &  M.  424) 
Fightmaster  v.  Beasly  ^7  J.  J.  Marsh. 

415) 
Filbrun  v.  Ivers  (92  Mo.  388,  4  S   W. 

674) 
Filley  v.  McHenry  (71  Mo.  417) 
t'  Phelps  (18  Conn  294)       111, 


Finckle  v.  Stacy  (Ca.  Ch.  9) 
Finlay  v.  Stewart  (56  Pa.  183) 


249, 


Finley  i;.  Fay  (17  Hun  67) 

V.  Lycoming   Ins.   Co.    (30  Pa. 

311) 
Finney  v.  Bedford   Ins.  Co.  (8  Met. 

348) 

r.  Warren  Ins.  Co.  (1  Met.  16) 

Fireman's   Ins.  Co.  v.  Floss  (67  Md. 

403,  10  Atl    139) 
First  Nat.  Bank  v.  Almy  (117  Mass. 

476)  50, 

V.  Breese  (-39  la.  640) 

V.  Clark  (32  N.  E.  255) 

V  Conwav  (67  Wis.   210,  30  N. 

W.  215)        ■  68,  69, 
V.  Hackett  (61  Wis.  33-5,  21   N. 

W.  280)  135, 

(•.  Hall  (101  U  S  4.3) 

v:  Morgan  (73  N  Y.  593)  96, 171 

V.  Parsons   (128  Ind.  147,  27  N. 

E.486) 

V.  Whitney  (4  Lans.  34) 

Fisher  v.  Bowles  (20  III.  .396)  77, 

('.  Mowbray  (8  East  380) 

I'.  Murray  (1  E.  D.  Smitli  .341) 

V.   Sweet  (67  Cal.  228,  7  Pac. 

657)  58, 

V   Taylor  (2  Hare  218) 

V.  Tucker  (1  McC.  Ch.  169)  150, 


17 
368 
468 

414 

438 
663 
520 
248 
98 
151 
164 
470, 
490 
425 
446 
346 
•69 
170. 
173 
146 

543 
503 
210 
164 

.304 

204 
69 
183, 
445 
64 
256. 
266 
136 

235 

318 
318 

2-36 

,550 
170 
642 

,405 


427 
445 

1.36 
540 
103 
16 
135 

248 
147 
1.59, 

508 


XXXIV 


TABLE   OF    CASES. 


Fisk  V.  Copeland  (1  Over.  383)  164 

V.  Herrick  (G  Mass.  271)        137,  33'.l, 

345,  340,  44t) 
Fiske  V.  Foster  (10  Met.  697)  468 

r.  Gould  (12  F.  K.  372)  445 

Fitch  V.  Hall  (25  Barb.  IH)  45 

c.  Harrington  (13  Grav  4G8)         104, 

128,  474 

V.  Stamps  (6  How.  Miss.  487)       1U4 

Fitzell  V.  Leaky  (72  Cal.  477,  14  Pac. 

198)  53 

Fitzgerald  v.  Grimniell  (64  la.  261,  20 

N.  W.  179)  335 

Fitzpatriek   o.  Flannagan   (106  U.  S. 

648)  442 

Flack  V.  Charron  (29  Md.  311)  332 

Flagg  V.  Upham  (10  Pick.  147)  173 

Fliinaj>an  (•.  Shuck  (82  Ky.  617)  360 

Fhuiagiu  v.  Champion   (I   Green  Ch. 

51)  69,  162,  164 

Fleischmann  v.  Gottsclialk    (70   Md. 

52:^,  17  Atl.  384)  222 

Fleming  v.  Uunbar  (2  Hill  S.  C.  532)  150, 

151 

I'.  McNair  (1  Mont.  Part.  37)         106 

Flemyng  v  Hector  (2  M.  &  W.  172)  35,  52 
Fletcher  v   Dyche  (2  T.  K.  32)  224 

c.  Pollard  (2  Hen  &  M.  544)  520 

V.  PuUen  (70  Md.    205,    16  Atl. 

887)  105 
o.  Reed  (131  Mass.  312)          392,  393 


Vandusen  (52  la. 448) 
Flood  (.'.  Yandes  (1  Bhickf.  102) 
Flournoy  r.  Williams  (68  Ga.  707) 
Flower  r.  Barnekoff  (20  Ore.  132,  25 
Pac.  3;0) 

r.  O'Connor  (7  La.  194) 

Flovd  V.  Wallace  (81  Ga  688) 

Fo.sg  V.  Green  (16  Me.  282) 

V.  Johnston  (27  Ala.  432)         11, 


284 

151 

69 


444 

123 

70 

276, 


V.  Lawry  (68  Me.  7 

Foil  r.  McArthur  (31  Ala  26) 
Folds  r.  Allardt    (35   Minn.   •: 

N.  W.  201) 
Foley  V.  Hobards  (3  Ired.  177) 
Folk  V.  Ru-sell  (7  Baxt.  591) 
V.  Wilson  (21  Md.  538) 


277,  455,  456 
343 


164 
29 

17 

88 
160 
70,  89,  181 
16 


Forrester  v.  Bell  (10  Tr.  L.  656)  551 

Forsaith  v.  Merritt  (1  Low.  336)  468 

Forster  i\  Hale  (5  Ves.  308)  302 

Forsyth  r.  Hastings  (27  Vt.  646)  18 

V.  Woods  (11  Wall.  484)  4,  488 

Furtune  o.  Brazier  (10  Ala.  791)    252,  258 

316 
Fosdick  V.  Van  Horn  (40  Oh  St.  459)  114 
Foster  v.  AUanson  (2  T.  li.  479)  262,  267, 

507,  619 
V.  Andrews  (2  Pen.  &  W.  160)     169, 

173 

V.  Barnes  (81  Pa.  377)  361 

V.  Donald  (1  Jac.  &  W.  262)  214,  516 

i\  Hall  (4  Humph.  346)  88,  89 

V.  Jackson  (Hob.  59)  144 

0.  Lawson  (3  Bing.  452)  320,  321 

y.  United    States    Ins.    Co     (11 

Pick.  85)  146 

Foster's  Appeal  (74  Pa.  391)  359 

Fougner  v.  First  Nat.  Bank  (30  N.  E. 

442)  61 

Fourth   Nat.   Bank  v.  Altlieimer  (91 

Mo.  190,  3  8  W.  858)  58,  187 

Foute  V.  Bacon  (24  Mi.-^s.  156)  161 

Fowke  V.  Bowie  (4  H.  &  J.  566)  420 

P'owle  V.  Harrington  (1  Cush.  146)        381 
Fowler  r.  Bailey  (14  Wis.  125)  350 

r.  Lud«ig  (34  Me.  455)  96,  483 

Fowlkes  V.  Bowers  (11  Lea  144)    476,  487 

Fox  V.  Clifton  (6  Bing.  776)       12,  30,  108, 

130,  140,252,554,  556 

V. (9  Bing.  115)    6,  11,  130,  554, 

556 

V.  Hanburv  (Cowp.  445)       129,  131, 

134,  136,  304,  324,  391,  463,  464,  465, 
466,471,  475,  531 

155 

68 
24 
427 
249 
.24, 
247 

118 
354 


Fonda  V.  Van  Home  (15  Wend.  631] 
Foot  >\  Goldman  (68  Miss.  629,  10  So. 

62)  17 

r.  Sahin  (19  Johns.  154)  96,  185 

Forbes  a.  Marshall  (11  V.x.  176)  113 

V.  Webster  (2  Vt.  58)  269 

Ford  r.  Clark  (72  Ga.  76(1)  160 

;•    H  ift  (Writrht  118)  150 

r.  Pliillips  (1  Pick   202)  19 

Forde  c.  Herron  (4  Munf.  316)      350,  867, 

369 
Fore  r.  Hittson  (70  Tex.  517,  8  S.  W. 

2' "2)  83 

Forkner  i\  Stuart  (6  Gratt.  197)  131 

Forman  v.  Homfray  (2  Ves.  &  B.  329)  280. 


Forney  v.  Adams  (74  Mo.  138) 


508,  510 
97 


V.  Norton  (9  Mich.  207) 

Francis,  In  re  (2  Sawy.  286,  7  N.  B. 
R.  359) 

V.  Dickel  (68  Ga.  265) 

r.  Smith  (1  Duv.  121) 

F>ancisco  v.  Fitch  (25  Barb.  130) 
Frank  v.  Anderson  (13  Lea  695)      23 

Blake  (68  la.  760,  13  N.  W. 


50) 


V.  Branch  (16  Conn  261) 
V.  Webb   (67   Miss.   462,   6   So 

(-.20) 
Frankland  v.  McGusty  (1  Knapp  Pr 

274)  99,  175,  176 

Franklin  v.  Brownlow  (14  Ves.  550)     467 

V.  Robinson  (1  Johns   Ch.  156)    200, 

384 

V.  Thomas  (3  Mer.  225) 

Franklin,  The  (6  C.  Rob.  127) 
Franklin   Bank  v.   Hooper   (36   Me 

222) 
Franks,  Er  parte  (1  Moo.  &  R.  1) 

r.  De  Pienne  (2  Fsp.  687) 

Fraser  v.  Gates  (118  111.  99,  1  N.  E 

817) 
Frazer,  Tn  re  (1892,  2  Q.  R.  633) 
V  Howe  (106X11.  563) 


201 


290 
26 

420 
22 
23 

66 
405 
429 


TABLE   OP   CASES. 


XXXV 


Frazier  v.  Frazier  (77  Va.  775) 
Fret'land  v.  (Jocke  (2  Miiiif.  ',ib'2) 

V.  Heron  (7  Crarich  147) 

V.  Stansfield  (16  Jur.  792) 

V. (2  Sm.  &  G.  479) 

Freeman,  Ex  parte  (liuck  471) 


V.  Bloomfield  (43  Mo.  391) 

0.  Cairpbell  (05  Cal.  107) 

/'.  Oarliart  (17  Ga.  348) 

r.  Carpenter  (17  Wis.  126) 

i\  Ellison  (37  Mich.  459) 

V.  Fairlie  (3  Mer.  44) 

0.  Ross  (15  Ga.  252) 

V.  Smith  (2  Wall.  160) 

('.  Stewart  (41  Miss.  138) 

Freeman's  Bank  v.  Rollins  (13  Me 

202) 
Freese  v.  Meson  (49  111.  191) 
Freligh  v.  Miller  (10  La.  Ann.  418) 
French  v.  Andrade  (6  T.  R.  582) 


201 
515 
518 
2'M 
466,  530 
428,  490, 
499 
10,47 
182 
151 
177 
99 
123 
180 
70,  279 
500 


417 
57 
71 

438 


V.  Chase  (6  Me.  166) 
V.  Fenn  (3  Douf?.  257) 
V   Price  (24  Pick.  13) 
c.  Rowe    (15  la.  5()3) 
V.  Styring  (2  C.  B.  n. 


346,  446,  498 

500 

63,  66 

125,  163 

8.  357)   67, 

252 

94 

16 

84 

525 


Frentress  v.  Marble  (2  Greene  563) 
Fridge  v.  State  (3  G.  &  J.  103) 
F>ien<l  v.  Duryee  (17  Fla.  Ill) 
Frigerio  v.  Crottes  (20  La.  Ann.  351) 
Frink  v.  Ryan  (4  111.  322)       220,  262,  265 
Fripp  ('.  Williams  (14  S.  C.  502)  162 

Frisbie  v.  Larned  (21  Wend.  450)         483 
Fronime  v.  Jones  (13  la.  474)  131 

Fromont  v.  Coupland  (2  Bing.  170)     248, 

262,  519 
Frost  V.  Moulton  (21  Beav.  596)    128,  373 

V.  Wolf  (77  Tex.  455,  14  S.  W. 

440)  367 

Fry,  Ex  parte  (1  (^ilyn  &  J.  96)      428,  490 

• y.  Bennett  (4  Duer  247)  322 

y.  Potter  (12  R.  I.  542)  249 

Fuch  V.  Blakiston  (15  Alb.  L.  J.  288)    623 


Fuldo  ('.  Griffin  ( 1  F.  &  F.  147) 
FuUagar  v.  Clark  (18  Ves.  481) 
Fullam  V.  Abrahams  (29  Kas.  725) 
Fuller  r.  Ferguson  (26  Cal.  546) 

V.  McHenry  (53  N.  W.  896) 

V.  Percival  (126  Mass.  381) 

Fulmer's  Appeal  (90  Pa.  143) 


40 

514 

336 

24,  36 

24 

168 

193,  199, 

222 

Fulton  V.  Central  Bank  (92  Pa.  112)    168, 

378 
331 


V.  Huglies  (63  Miss.  61) 

V.   Loughlin   (118   Ind.   286,   20 

N.  E.  796)  131 

I'.  Williams  (U  Cash.  108)  246 

Furber  v.  Carter  (11  Humph.  271)  77,  103 
Furlong  v.  Bartlett  (21  Pick.  401)  304 

Furnival  v.  Weston  (7  J.  B.  Moore 

356)  142,  145,  307 

Furze  v.  Sharwood  (2  Q.  B.  388)  114 


G. 

Gable  v.  Williams  (59  Md.  46) 


136,  284, 
435,  480 
5,  6 


Gabriel  v.  Evill  (9  M.  &  W.  297) 
Gage  V.  Parmalee  (87  111.  329) 

V.  Rollins  (10  Met.  348) 

Gail  V.  Leckie  (2  Stark.  107) 
Gainsborough    v.   Stork    (Barn.    Ch. 

312)  207.215,511 

Galbraith  v.  Gedge  (16  B.  Men.  631)   361, 

362 

V.  Moore  (2  Watts  86) 

Gale  V.  Leckie  (2  Stark.  107) 

V.  Miller  (44  Barb.  420) 

V.  Reed  (8  East  80) 

V  SuUoway  (62  N.  H.  67) 

Galigher  v.  Lockhart  (11  Mont.  109, 

27  Pac.  446) 
Gallagher's  Appeal  (114  Pa.  353,  7 

Atl.  237) 

Galsworthy  v.  Strutt  (1  Ex.  659)  224,  225 

Gait  ('.  Calland  (7  Leigh  594)  94,  508 

Galway  v.  Matthew  (  1  Camp.  403)       79, 

111,  113,  183,387,402 

V. (10  East  264)         79,80,387, 

402 
Gamble  v.  Grimes  (2  Ind.  392) 
Gannett  v.  Cunningham  (34  Me.  56) 
Gano  y.  Samuel  (14  Ohio  592)      184 


526 
312 
252 


254 
210 
87 
401 
525 

393 

332 


176 
380 
185, 
206 


Gansevoort  v.  Williams    (14   Wend. 

133)  96,  99,  100,  172,  173,  174,  184 

Ganson  v.  Lathrop  (25  Barb.  455)        184, 

331 
Garbett  v.  Veale  (5  Q.  B.  408)  344 

Gardenhire  v.  Smitli  (39  Ark.  280)  53 

Gardiner  v.  Childs  (8  C.  &  P.  345)  13, 101 
Gardner  v.  Baker  (25  la.  34.3)  144 

v.  Cleveland  (9  Pick.  334)  66 

V.  Conn  (34  Oh.  St.  187)       168,  380, 

400 

V.  Northwestern  Co.  (52  III.  367)    69 

Gardom,  Ex  parte  (15  Ves.  286)  142 

Gardon  v.  Slowden  (12  CI.  &  F.  237)        8 

Garland,  Ex  parte  (10  Ves.  110)    65,  450, 

451,  452,  503 

I'.  Agee  (7  Leigh  362)  162 

V.  Davidson  (3  Munf.  189)  150 

Hickey  (75  Wis.  178,  43  N.  W. 


832) 


Jaeomb  (L.  R.  8  Ex.  218) 
Noble  (IJ  B.  Moore  187) 


146 
82 
148, 
320 
550 


Garrard  v.  Hardey  (5  M.  &  G.  471) 
Garretson   v.   Weaver   (3   Edw.    Ch. 

385)  293,  295,  .371,  456 

Garrett  v.  Handley  (3  B.  &  C.  462)       312 

V. (4  B.  &  C.  664)   146,  316,  317 

V.  Miss.  &  A.  R.  R.  (1  Freem. 

Ch.  70)  289 

V.  Robinson  (80  Ala.  192)  525 

V.  Taylor  (1  Esp.  117)  313 

Gartside  Cole  Co.  v.  Maxwell  (22  F.  R. 

197)  60 


XXXVl 


TABLE    OF   CASES. 


Garvin  v.  Paul  (47  N.  H.  158)  339,  340 
Gass  V.  N.  Y.  P.  &  B.  K.  R.  (99  Mass. 

220)  65 

V.  Stimson  (3  Sumn.  98)  425 

Gassie,   Succession  of  (42  La.  Ann. 

239,  7  So.  454)  508 

Gaston  v.  Kellogg  (91  Mo.  104,  3  S. 

W.  589)  201 
Gates  V.  Bennett  (33  Ark.  475)  134 
V.  Fisk  (45  Mich.  522,  8  N 


558) 


Graham  (12  Wend.  53) 

V.  Hughes  (44  Wis.  332) 

V.  Pollock  (5  Jones  344) 

V.  Watson  (54  Mo.  585) 

Gathright  v.  Burke  (101  Ind.  590) 
Gavin  v.  Walker  (14  Lea  (543) 
Gay  V.  Bovven  (8  Met.  100) 

V.  Jolinson  (.32  N.  H.  167) 

V.  Seibold  (97  N.  Y.  472) 

V.  Waltnian  (89  Pa.  453) 

Gaylord  v.  Imhoff  (26  Oh.  St.  317) 


W. 

160,  101 

154,  155 

95,  414 

307 

90 

405 

74,87 


162 
22 
228 
149 
335, 
491 

Geddes  v.  Wallace  (2  Bligh  270)    60,  107, 

269,  518 
Geerv  v.  Cockroft  (33  N.  Y.  Super. 

140)  97 

Geise  V.  Ragan  (80  Ga.  732,  6  S.  E. 

697)  254 

Cellar,  Ex  parte  (1  Rose  297)    59,  73,  133 
George  (■.  Claggett  (7  T.  R.  361)  272 

Geortner  v.  Trustees,  &c.   (2   Barb. 

625)  295,  381 

Gerard  r.  Basse  (1  Dall.  119)         150,  155 

V.  Bates  (124  III.  150.  16  N.  E. 

258)  343 

Gering,  Ex  parte  (1  Ves.  Jr.  168)  503 

German  Mining  Co.,  In  re  (27  Eng. 
L.  &  Eq.  158)  200,  203 

, (4  De  G.  M.  &  G.  19)    200,  202 

Gernon  v   Hoyt  (90  N.  Y.  631)  114 

Gervais  v.  Edwards  (2  Dr.  &  W.  80)     278 
Gestons  v.  Brooke  (Cowp.  793)  62 

Cetchell  V.  Foster  (106  Mass.  42)  55 

V.  Heald  (7  Me.  26)  159 

Gibbons  v.  Wilcox  (2  Stark.  43)  48,  60,  69 
Gibbs  i\  Baltimore  Gas  Co.  (130U  S 


396) 

r.  Bryant  (1  Pick.  121) 

V.  Merrill  (3  Taunt.  307) 

Gibson  v.  Lupton  (9  Bing.  297) 


566,  567 

76 

22 

48,  53, 

54,88 

V.  Minet  (1  C.  &  P.  247)  482 

V.  Moore  (6  N.  H.  547)   255,  264,  265 

r.  Smith  (31  Neb.  354,  47  N.  W. 

1052)  46,  51 

V.  Stevens  (7  N.  H.  352)  320,  325, 343 

V.  Stone  (43  Barb.  285)  45 

V.  Warden  (14  Wall.  244)  150 

Giddings  v.  Palmer  (107  Mass.  269)       328 
Giffin  V.  Ashby  (2  C.  &  K.  139)  157 

Gilbert  v.  Dickerson  (7  Wend.  449)      304 
Gilchrist  ?•.  Brande  (58  Wis.  184,  15 

N.  W.  818)  87,  143,  404 

Gildersleeve  v.  :Mahony  (5  Duer  383)  180 


Gilfillan  v.  Henderson  (2  CI.  &  F.  1)  15 
Gill  V.  Ferris  (82  Mo.  156)  60,  111 

V.  Geyer  (15  Uhio  399)  221 

V.  Kuhn  (0  S.  &  R.  333)  47,  107,  263 

V.  Lattimore  (9  Lea  381 )  335 

Gillaspy  v.  Peck  (46  la.  461)  336 

Gillbank  v.  Stephenson  (31  Wis.  592)  58 
Gille  V.  Hunt  (25  Minn.  357,  29  N.  W. 

2)  351 

Gillespie  v.  Hamilton  (3  Madd.  251)  432 
Gillett  V.  Hall  (13  Conn.  426)  507,  508 

V.  Thornton  (L.  R.  19  Eq.  599)     213 

Gillighan  v.  Tebbetts  (33  Me.  360)  163 
Gilly  V.  Singleton  (3  Litt.  249)  164 

Giiman  v.  Cunningham  (42  Me.  98)         53 

V.  Vaughan  (44  Wis.  646)  526 

Gilmore  v.  Black  (11  Me.  485)        53,  127, 

138,  555 
Gilpin   V.   Enderbey   (5  B.   &  Aid. 

954)  47,  51 

V.  Temple  (4  Harr.  1)  69 

Ginesi  v.  Cooper  (14  Ch.  D.  596)  237 

Given  v.  Albert  (5  W.  &  S.  333)      48,  74, 

444 
Glasscock  v.  Smith  (25  Ala.  474)  382 

Glassington  v.  Thwaites  (1  Sim.  &  St. 

124)         70,  194,  197,  198,  216,  217,  220, 
285,  286,  294,  510 
Gleason  v.  Chicago,  M.  &  S.  P.  R.  R. 

(43  N.  W.  517)  196 

V.  Clark  (9  Cow.  57)  163 

V.  McKay  (134  Mass.  419)  501 

V.  Van  Aernam  (9  Ore.  343)  512 

i:  White  (34  Cal.  258)  434 

Glen  V.  Arnold  (56  Cal.  631)  470 

Glossop  V.  Colman  (1  Stark.  25)  17,  109 
Glover  v.  Austin  (6  Pick.  209)  320 

V.  Tuck  (24  Wend.  153)         211,  257 

Glyn  V.  Caulfield  (15  Jur.  807)  520 
Goble  V.  Howard  (12  Ohio  165)  260 
Goddard  v.  Bulow  (1  N.  &  McC.  45)  439 
V.  Hodges  ( 1  Cr.  &  M.  33, 3  Tvrw. 

209)  10,  128,  248,' 252,  553 

V.  Ingram  (3  Q.  B.  839)     157, 158, 162 

V.  Lyman  ( 14  Pick.  268)  311 

V.  Pratt  (16  Pick.  412)      5,  29,  58,  375 

406,  410,  412 
Godfrey  v.  Browning  (2  Ves.  Sen.  33) 

431 

V.  Macauley  (1  Peake  155)  412 

V.   Templeton   (86   Tenn.    161, 

6S.  W.  47)  201 

V.  TurnbuU  (1  Esp.  371)        402,  412 

V.  White  (43  Mich.  171,  5  N.  W. 

243)  201, 361 

Goembel  v.  Arnctt  (100  111.  34)  332 

Goepper  v.  Kinsinger  (39  Oh.  St.  429) 

352 
Goesele  v.  Bimeler  (14  How.  589)  37 

Gold   V.   Canham   (1   Cas.   Ch.    311, 

2  Swanst.  325)  287,  516 

Golden  State  &  M.  I.  W.  r.  Davidson 

(73  Cal.  389,  15  Pac.  20)  366 

Goldsmid  v.  Cazenove  (7  H.  L.  Cas. 

785)  487 


TABLE   OF   CASES. 


XXXVll 


Goldsmith  v.  Eichold  (94   Ala.   116, 
10  So.  bO)  4,  204,  331 

V.  Sachs  (17  F.  R.  726,  8  Savvy. 

110)  12,  259 

Gomersall  v.  Gomersall  (14  All.  60)      248 
Good,  J'! X  parte  (5  Ch.  D.  40)  57,  144 

Goodbar  v.  Gary  (16  K.  K.  old)       99,  332 
Goodburn  v.  Stevens  (5  Gill  1)      350,  361, 

362 
Goodcliap  V.  Roberts  (14  Ch.  D.  49)  203 
Goode  V.  Harrison  (5  B.  &  Aid.   147) 

10,  19,  103,  108 

V.  Linecurn  (1  How.  Miss.  281) 

147 

y.  McCartney  (10  Tex.  193)     60,98, 

179,  274 
Goodenow  ;;.  Jones  (75  111.  48)  429 

Gooding   v.    Morgan    (37     Me.   419) 

483 
Goodman,  Ex  parte  (3  >radd.  373)         485 

('.  W'liitconib  (1  Jac.  &  W.  674) 

199,  278,  284,  285,  293,  295,  2'JO,  455, 
456,  457.  510 

V.  White  (25  Miss.  103)  82,  147 

Goodnow  V.  Smith  (18  Pick.  41G)  144 

Goodsell  '•.  Myers  (3  Wend.  479)  19 

Goodspeed   v    Wiard    Plow   Co.    (45 

Mich.  322,  7  N.  W.  902)  380,  400 

Goodtitle  V.  Woodward  (3  B.  &  Aid. 


689) 
Goodwin  V.  Parton  (41  L.  T.  Rep.  91, 

42  L.  T.  Rep.  568) 
Gordon  v.  Buchanan  (5  Yerg.  71) 

t'.  Cannon  (18  Gratt.  387) 

V.  Ellis  (7  M.  &G.  607) 

r.  (2  C.  B.  821) 

V.  Freeman  (11  111.  14) 

c.  Gordon  (3  Swanst.  476) 

'■.  Kennedy  (36  la.   167) 

Gorham  v,  Thompson  (Peake  42) 


165 


Gorman  v  Russell  (18  Cal.  688) 


159 
147 
135 
179,  274 
116,  272 
386,  392 
511 
327 
406, 
411 
549 


Goss  i:  Duiresnoy  (Davies  B.  L.  371)  49y 


510 
550 


19 


38 


335 
419 
144 
234,  235 
559,  564 
394 


Gossini  v.  Terazzo  (66  Cal.  545) 

Gott  V.  Dinsraore  (HI  Mass.  45) 

Goudv  V.  Werbe  (117  Ind.    154, 

N.  E.  764) 
Gougli  V.  Davies  (4  Price  200) 
Gould  V.  Gould  (4  N.  H.  173) 

r. (6  Wend.  263) 

>•.  Head  (38  F.  R.  886) 

>■.  Horner  (12  Barb.  60l) 

Guuldmg,  Ex  parte  (2  Glyu  &  J.  118) 

96, 175 

/•.  Bain  (4  Sandf.  716)  294,  297 

Gouthwaite  v.  Duckworth  (12    East 

421)  73,102,229 

Gowan  v.  Jackson  (20  Johns.  170)         165 

r.  Jeffries  (2  Aslim.  296)        294,  295, 

297,  300,  371,  391,  456,  463 
Gower  v.  Saltmarsh  (11  Mo.  271)  225 

Grabenheimer  v.  Rindskoff  (64  Te.x. 

49)  104, 475 
Grace  v.  Shurter  (1  Wend.  148)  444 
V.  Smith  (2  W.  Bl.  998)  39 


Graeflf  v.  Hitchman  (5  Watts  454)     74,  89, 

114,  181 
Grafton  v.  United  States  (3  Story  640)  76 
Grafton  Bank  v.  Moore  (13  N.  H.  yt») 

69,  164 
Graham  v  Harris  (5  G.  &  J.  489)  270 

V.  Holt  (3  Ired.  300)        249,  262,  264 

V.  Hope  (Peake  154)  406,  412 

V.  Robertson  (2  T.  K.  282)     253,  254, 

266,  268,  40« 

v.  Selover  (59  Barb.  313)  160 

V.  Taggart  (11  Atl.  652)  yy 

L\  Thornton  (9  So.  292)  254 

V.  Wichels  (1  Cr.  &  M.  188)  385 

Gram  c.  Cadwell  (5  Cow.  489)     78,  97,  178 

V.  Seton  (1  Hall  262)  151,  153 

Grant,  In  re  (5  Law  Rep.  303)  485 

0.  Hawkes  (Chit.  Bills  42)    168,  179, 

206 

r.  Jackson  (Peake  203)  163 

V.  Watts  (10  Paige  82)  12 

Grasselli  u   Lowden  (11  Oh.  St.  349)     401 

Gratz  V.  Bayard  (1 1  S.  &  R.  41)     127,  194, 

286,  300,  432,  455 

Graves  v.  Boston  Ins.  Co.  (2  Crancli 

419)  146,  318 

V.  Hall  (32  Tex.  665)  135 

V.  Kellenberger  (51  Ind.  66)  170 

V.  Key  (3  B.  &  Ad.  318)  492 

V.  Merry  (6  Cow.  701)  403,  405 

V.  Sawcer  (T   Raym.  15) 

Gray,  Ex  parte  (4  Deac  &  Ch.  778) 
,  In  re  (HI  N.  Y.  404,  18  N.  E. 

719) 

V.  Brown  (22  Ala.  262) 

V   Chiswell  (9  Ves.  118) 

Church  (84  Ga.  125,  10  S.  E. 


303 

488 


478,  487 
143 


330 


539) 


118 
117 
223 
543,  547 
163 


Cropper  (1  All.  337) 

V.  Crosby  (18  Johns  219) 

V.  Gibson  (6  Midi.  300) 

V.  Hodson  (1  Esp.  135) 

c.  Palmer  (9  Cal.  616)     349,  356,  359 

V.  Portland  Bank  (3  Mass.  364)     221 

V.  Smith  (43  Ch.  D   208)       242,  243, 

360 

V.  Ward  (18  111.  32)  82,  84 

r.  Washington  (Cooke  321)  511 

V.  Wilson  "(4  Watts  39)  220 

Grazebrook,  Ex  parte  (2  Deac.  &  Ch. 

186)  473 

V.  McCreedie  (9  Wend.  437)  155 

Greathouse  »'.  Greathouse   (60   Tex. 

.597)  254 

Greatrix  v.  Greatrix  (1  De  G.  &  S. 

692)  286 

Greddes  v  Wallace  (2  Bligh  295)  207 

Greeley  v.  Wyeth  (10  N.  H.  15)       96,  97, 

140,178,  179,  274,312 

Green  r.  Barrett  (1  Sim.  45)     11,  277,  455 

V.  Beals  (2  Caines  2-54)  150,  155 

V.  Beesley  (2  Bing.  N.  C  108)         57 

V.  Bostwick  (1  Sandf.  Ch.  185)      302 

V.  Bradfield  (1  C.  &  K.  454)  490 

V.  Briggs  (6  Hare  395)  66 


XXXVlll 


TABLE   OF   CASES. 


Green  v.  Chapman  (27  Vt.  236)     270,  307 

(•    Drakin  (2  Stark.  347)  96,  174 

V.  Gieen  (1  Ohio  24-4)  354,  'SCI 

V   Tanner  (8  Met.  411)  »y,  181 

I'.  Waco  State  Bank  (78  Tex.  2)   392 

c.  Waring  (1  W.  Bl  475)  ^02 

Greene  v.  Butterwortli  (45  N.  J.  Eq. 

738,  17  All.  949)  445 

I'.  Greene   (1  Ohio  244)      137,  3.io, 

302 
Greenleaf  v.  Quincy  (12  Me.  11 )  100 

Greenslade  v.  Dower  (7  B.  &  C.  635)     82, 

84,  147 
Green  wald  v.  Raster  (86  Pa.  45) 
Greenwood  v.  Marvin  (HI  N.  Y.  423, 

19  N.  E.  228) 
Greer  c  Ferguson  (19  S.  W.  966) 
Gregg  V.  Brower  (07  111.  525) 
c.  Hord  (129  111.  613,  22  N.  E. 

528) 

I'.  James  (1  111.  107) 

Gregg  Township  v.  Half-Moon  Town- 

siiip  (2  Watts  342)  55 

Gregory  o.  Bailey  (4  Harr.  256)  273 

I'.'Forrester  (McC   Ch.  318)  512 

V.  Gregory  (Coop  201,Jac.  631)  514 


144 

366 
368 
251 

212 
144 


i\  Menefee  (83  Mo  413) 

f.  Paul  (15  Mass.  31) 

V.  Pierce  (4  Met.  478) 

Grellier  v.  Neale  (Peake  146) 
Gridiey  v.  Dole  (4  N.  Y.  486) 


201 

23 

23 

272 

255,  208, 

508 

Grieff  v.  Boudousquie  (18  La.  Ann. 

631)  72 

Grier  v.  Hood  (25  Pa.  430)  155,  156 

Griffin  v.  Doe  (12  Ala.  783)  6 

Griffith  V.  Buck  (13  Md.  102)         328,  338 

r.  Buffum  (22  Vt   181)       58,  74,  102 

V.  Chew  (8  S.  &  R  30)  270,  307 

V.  Wilbing  (3  Binn.  317)  507 

Grigsbv  v.  Nance  (3  Ala.  347)  255 

Grill,  E.r  parte  (Cooke  B.  L.  503)  497 

Grim's  Appeal  (105  Pa.  375)  433, 434, 

43ti 
Grinnan   v.  Baton  Rouge  Mills  Co. 

(7  La.  Ann.  638)  408 

Gri.«soni  I'.  Moore  (106  Ind.  296,  6  N. 

E,  029)  363 

Griswold  v.  Haven  (25  N.  Y.  595)  125, 161 

r.  Waddington  (15  Johns.  57)   10,26, 

12'.t,  403,  432,  459,  555 

(;.  (16  Johns.  438)    26,  309,  310, 

390,  403,  463,  501 
Grosvenor,  Er  parte  (14  Ves.  589)         503 

r.  Lloyd  (1  Met.  19)  74,  410 

Groth   1-.  Payment  (79  Mich.  290,  44 

N.  W.  611)  457 

Grove  v.  Dubois  (1  T.  R.  112)  318 

Grover  r   Hall  (3  H.  &  J.  43)  515 

V.  Hugell  (3  Russ.  432)  289 

Grow  V   Seligman  (47  Mich.  607)  239 

Grozier  v.  Atwood  (4  Pick.  234)  61 

Grand  v.  Van  Vlack  (69  III.  478)  118 

Gruner  r.  Slacken  (39  La.  Ann.  1076, 
3  So. 338)  206 


Gae'ringer  v.  His  Creditors  (33 

Ann.  1279) 
Guice  V.  Thornton  (76  Ala.  466) 


La. 

476 

12,  89, 

98 

Guidon  v.  Robson  (2  Camp.  302)    77,  107, 

108,  109,  273,  316,  492 

Guild  V.  Welch  (119  Mass.  257)  87 

Guillon  V.  Peterson  (9  Phila.  225)  120, 123, 

167 

,.. (89  Pa.  163)  123 

Gulick  V.  Gulick  (2  Green  578)  260,  262 
Gunn  V.  Central  R.  R.  (74  Ga.  509)  27 
Gunter  v.  Williams  (40  Ala.  561)  93 

Guptil  V.  McFee  (9  Kas.  30)  335 

Gurney,  Ex  parte  (3  Mont.  D.  &  D. 
541)  494 

V.  Evans  (3  H.  &  N   122)  103 

Guyther  v.  Pettijohn  (6  Ired.  388)  303 
Gwinn  v.  Rooker  (24  Mo.  290)  151 

Gwynn  v.  Gwynn  (27  S.  C.  527, 4  S.  E. 

229)  23,  24 

G Wynne  v.  Estes  (14  Lea  662)  434 

Gyger's  Appeal  (62  Pa.  73)  203,  526 


H. 


Haas  V.  Shaw  (91  Ind.  384)  24 

Habershon  v.  Blurton  (1  De  G  &  S. 

121)  342,375,391,392 

Hacker  v.  Shepherd  (2  Chitty  652)  469 
Hackett  v.  Multnomah  Rv.  (12  Ore. 

124,  6  Pac.  659)  27 
V.  Stanley  (115  N.  Y.  625,  22  N. 

E. 745)  44 
Hackley  v.  Patrick  (3  Johns.  536)  163 
Haddock  v.  Crocheron  (32  Tex.  276)  160 
1-.  Grinnell  Mfg.  Co.  (109  Pa.  372, 

1  At!.  174)  543 

Hadfield  r.  Jameson  (2  Munf.  53)  74, 

117,  124 
llagar  v.  Mounts  (3  Blackf.  57,  261)      97, 

172 

V.  Stone  (20  Vt.  106)  272 

Hage  V  Campbell  (78  Wis.  572,  47  N. 

W.  179)  98,  134 

Hagedorn  v.  Oliverson   (2  M.  &   S. 

426)  318 

Haggart  v.  Morgan  (4  Sandf.  198)  220 
Haggerty  v.  Foster  (103  Mass.  17)        538 

V.  Taylor  (10  Paige  261 )         544,  545 

Hague  V.  Rolleston  (4  Burr.  2174)  129, 
391,  463,464,479 
Hahlo  V.  Mayer  (102  Mo.  93, 13  S.  W. 

804)  104 

Haldeman  v.  Bank  of  Middleton  (28 

Pa.  440)  172,  187 

Halderman  v.  Halderman  (1  Hempst. 

558)  264 

Hale  V.  Gerish  (8  N  H  374)  19 

V.  Hale  (4  Beav.  .369)  295,  456 

y.  (12  Beav.  414,  3  McN.  & 

G.  79)  294 

V.  Henrie  (2  Watts  145)  369 

V.  Wilson  (112  Mass.  444)  805 


TABLE    OF    CASES. 


XXXIX 


Haley  v.  Case  (142  Mass.  316,  7  X.  E. 

877) 
Rallied  v.  Marke  (3  Swanst.  444) 
Halifax,  Ex  parte  (2  Mont.  U.  &  D. 

544) 
Haipenny  v.  Pennock  (33  U.  C.  Q.  B. 

229) 
Halseliam  v.  Young  ;5  Q   B  833) 
Halsey  v.  Norton  (45  Miss.  703)    463, 

V    Whitney  (4  Mas.  200)         150, 

Halstead  v.  Sliepard  (23  Ala.  558)  97, 

132, 
HaUted  c.  Sclimelzel  (17  Johns.  80) 

Halsy  V   Fairbanks  (4  Mass.  206) 
Hall,  At  parte  ('J  Ves.  341»)  478, 

, (1  Kose  2) 

V.  Bainbridge  ( I  M.  &  G.  42) 

('.  Barrows  (33  L  J.  Ch.  204) 

V.  Clagett  (48  Md.  223)  231, 

V.  Cook  (69  Ala  »7) 

i:  Digbv  (4  Bro.  P.  C  224) 

>•.  Franklin  (3  .M   &  \V.  259) 

r.  Hall  (12  Beav.  414)  295,  396, 

457, 
r. (2  McC.  Cli.  302)       327, 


145, 


113, 
257, 


/■.  Kimball  (77  Hi.  101) 

c.  Lanning  (91  U   S    160) 

V.  Leigh  (8  Crancli  50; 

r.  Kichanlson  (20  Atl.  978) 

r.  Smith  (1  B.  &  C   407) 

r.  Stewart  (12  Pa.  213) 

Hall's  Appeal  (60  Fa.  458) 
Hallack  r.  March  (25  111.  48) 
Hallett  r.  Cumston  (110  Mass.  29)  47, 

r.  Dowdall  (18  Q.  B   2) 

r.  Hallett  (2  Paige  432) 

Hallidav  i:  Doggett  (6  Pick.  359) 

316, 

r.  Ward  (3  Camp.  32) 

Halls  V  Coe  (4  McC.  130)       142   178, 
Hallsted  i-.  Coleman  (143  Pa.  352,  22 

Atl.  977) 
Hambidge  r.  De  la  Croue'e  (3  C.  B 

744)  148, 

Haniblin  v.  Dinnoford  (2  Edw.  Ch. 

52<J) 
Hamer,  Ex  parte  (1  Rose  321) 
Hamil  v.  Flamil  (27  Md.  679) 
Hamill  v.  Purvis  (2  Barr  177) 
r.  Stokes    (Uaniell   20,   4   Price 

161) 
Hamilton,  In  re  (1  F.  R.  800) 

V.  Benbiiry  (2  Hayw.  385) 

I--.  Cummings  (1  Joiins  Ch  517) 


295, 


276, 
29, 


125 
511 

494 

143 

185 
469 
152 
131, 
276 

58, 
262 
307 
479 
146 
149 
237, 
244 
248 
333 

68 

15 
456, 
458 
330, 
444 
271 
148 

54 
331 
183 
508 
2:-i8 
147 
242 
552 
520 
512, 
317 
157 
179 

68 

155 

278 
480 
465 
185 

530 
472 
420 
276, 

289 


V.  Halpin  (68  Miss.  99,  8  So  739)  37. 


Hamilton  (18  Pa.  20)  262, 

Seaman  (1  Ind    185)  379, 

Stokes  (4  Price  161) 
Summers  (12  B.  Mon.  11) 


363 
508 
381 
455 
163, 
170 


Hamilton  c.  Van  Rensselaer  (43  N.  Y.  244) 

203 
Hammatt  v.  VVyman  (9  Mass.  139)  384 
Ilanimoii  r.  Roll  (March  202)  143 

Hammond,  Ex  jjaile   (L.  li.   16   Eq. 

614)  470 

y.  Douglas  (5  Ves  539)         240,  438, 

441,  443,501 

V.  Hammond  (20  Ga.  556)  249 

Hamper,  Ex  parte  (17  Ves.  403)  40,  46, 
56,  272,  498,  505 
Hamper's   Appeal   (51  Mich.  71,    16 

N.  VV  236)  60 

Hanchett  v.  Gardner  (138  111.  571,  28 

N.  E.  788)  134 

Hand  >j.  Armstrong  ( 18  la.  324)  203 

Haney  Mfg  C<>.  r.  Perkins  (78  Mich. 

1,  4.;  N.  \V.  1073)  125 

Haiiff  c.  Howard  (3  Jones  Eq.  440)      361, 

367,  369 
Hanford  i'.  Prouty    ( 133  111.  339,  24 

N    E  565)  332 

Hankey  r.  Becht  (25  Minn   212)  56 

V.  Garrett  (1  Ves.  236)  123,  489 

Hannigan  v.  Allen  (127  N   Y.  639,  27 

N.  E.  402)  429 

Hanning  u.  Ferrers  (1  Eq  Cas.  Abr. 

356)  492 

Hanover  Nat.  Bank  v.  Klein  (64  Miss. 

141)  332 

Hanson  ?•.  Metcalf  (46  Minn.  25,  48 

N.  W.  441)  136,  364 

Hapgood  V.  Cornwell  (48  111.  64)  332 

Haralson  v.  Campbell  (63Ala.  278)  333,  334 
Harbster's  Appeal  (125  Pa.  1,  17  Atl. 

204)  439 

Harding  r.  Butler  (156  Mass.  34,  30 

N.  E.  168)  159 

i:  Fo.xcroft  (6  Me.  76)  48,  54,  66 

i:  Glover  (18  Ves.  281)  294,  295 

V.  Norfolk  Mfg.  Co.    (80   Va. 


Hardy 
403) 


r.  Sproule  (29  Me.  258) 

c.  Waters  (38  Me.  450) 

Hare,  Ex  parte  (2  Mont.  &  A.  478) 

y.  Waring  (3  M.  &  W.  362) 

Harford  r.  Street  (46  la   594) 
Hargrave  v.  Conroy  (4  Green  281 ) 
Hargreaves,  Ex  parte  (1  Cox  440) 


143,  366 
66 


Hargroves  >•.  Cooke  (15  Ga.  221) 
Harman  v.  Johnson  (2  E.  &.  B.  61) 
Harmon  !•  Clark  (13  Gray  114) 


17 
490 
555 
334 

57 
474, 
499 
420 

82 
481 


Harper  i:  Fox  (7  W.  &  S.  142) 
1-.  Lamping  (33  Cal.  641) 


148,  155 
123,  420, 
454 


'•,  Ravmond  (3  Bosw.  29,  7  Abb. 

Pr.  142)'  555 

r.  Wrigley  (48  Ga.  493)  171 

Harries  v.  Jamieson  (5  T.  R.  556)  414 
Harrington  >•    Churciiward  (29  L.  J. 

N.  s.  Ch.  521)  47 

r.  Higham  (13  Barb.  660)      148,  149 

Harris,  Er  parte  (2  Ves.  &  B.  214,  1 

Rose  129,  437)  489,  491,  497,  498 


xl 


TABLE    OF    CASES. 


Harris,  Ex  parte  (1  Madd.  583)        78,  79, 
88,  383,  500 

,  Succession  of  (39  La.  Ann.  443, 

2  So.  3i))  222 

V.  Baltimore  (73  Md.  22,  20  Atl. 


Ill) 


84 


205 
542 

384 
478 
356 

18 
164 

66 


512 

109 


Crary  (67  Tex.  383,  3  S.  W 

316)  29,  103 

V.  Farwell  (13  Beav.  403)  330 

V. (15  Beav.  31)       96,387,416, 

417,  419,  482 
V.  Harris  (153  Mass.  439,  26  N.  E. 

1117)  352,  359 

V. (39  N.  H.  45)  248 

V.  Lindsay  (4  Wash.  C.  C.  98, 

271)  95,  414,  410,  417,  418,  484 
V.  Lloyd  (11  Mont.  390,  28  Pac 

736) 

V.  Murray  (28  N.  Y.  574) 

V.  North  Devon  Ry.  (20  Beav 

384) 

V.  Peabody  (73  Me.  262) 

V.  Pollard  (3  P.  Wms.  348) 

V.  Wall  (1  Ex.  122) 

V.  Wilson  (7  Wend.  57) 

Harrison,  Ex  parte  (2  Rose  70) 

V.  Arniitage  (4  Madd.  143)    280,  281, 

293,  457,  508,  510 

.  V.  Bevington  (8  C.  &  P.  708)         321 

V.  Clare  (2  Johns.  449)  143 

V.  Dewey  (46  Mich.  173,  9  N.  W. 

152) 

V.  Fitzhenry  (3  Esp.  238) 

0.  Gardner  (2  Madd.  198)      237,  239, 

240,  287,  441 

V,  Heathorn  (0  M.  &  G.  81)  550,  554, 

556 

V.  Jackson  (7  T.  R.  208)        145,  150, 

152,  167 

V.  Sterry  (5Cranch  289)       131,  134, 

135,  153,  408,  476,  479 

V.  Tennant  (21  Beav  482)    371,  456, 

462 

Harry  man  v.  Roberts  (52  Md   64)         165 

Hart  V.  Alexander  (2  M.  &  W.  484)       95, 

320, 406,  407, 416,  417, 419,  482,  484,  485 

V. (7C.  &P.  746)  387 

r.  Clark  (19  Beav.  349)  298 

r.  Clarke  (0  De  G.  M.  &  G.  232)  390 

V.  Fitzgerald  (2  Mass.  509)  320 

V.  Kelley  (83  Pa.  286)  61 

V.  Palmer  (12  Wend.  523)  164 

y.  Tomlinson  (2  Vt.  101)  427 

V.  Withers  (1  Barr  285)    94,  150,  154 

Hartford  Ins.  Co.  v.    Ross   (23  Ind. 

179)  230 

Hartlev  v   Kirlin  (45  Pa.  49)  427 

v'.  Wharton  (11  A.  &  E.  934)  18 

1-.  White  (94  Pa.  31)  98,3-33 

Hartman  v.  Woehr  (3  Green  383)  374 
Hartness  v.  Thompson  (5  Johns.  160)  22 
r.   Wallace  (106  N.  C.  427,  11 

S.  E.  259)  97 

Hartridge  v.  Rockwell  (R.  M.  Charlt. 

264)  291 


Hartung  v.  Siccardi  (3  E.  D  Smith 

560)  179 

Harvey  v.  Childs  (28  Oh.  St.  319)   44,  46, 

51,90 

V.  Crickett  (5  M.  &  S.  336)  250,  391, 

463,  464,  471 

V.  Varney  (98  Mass.  118)      215,  276, 

323,  506 

V. (104  Mass.  430)  296,523 

Harwood  i'.  Edwards  (Gow  Part.  65) 

145 
Haskell  v.  Adams  (7  Pick  59)  261,  208 
Haskins  v  Warren  (115  Mass.  514)  57 
Haslet  V.  Street  (2  McC.  310)  145 

Haslett  V.  Witherspoon  (2  Rich.  Eq. 

395)  375 

Hassels  r.  Simpson  (Doug.  92)  470 

Hastings  v.  Hopkinson  (28  Vt.  108)  545 
Hastings  Nat.  Bank  v.  Hibbard  (48 

Mich.  452,  12  N.  W.  651)  114 
Hatch  V.  Crawford  (2  Port.  54)  151 
Hatcher  v.  Seaton  (2  M.  &  W.  47)  257 
Hatchett  v.  Blanton  (72  Ala.  423)  352, 
353,  354,  427 
Hathaway  v.  Haskell  (9  Pick.  42)  159 
r.  State  Ins.  Co.   (64  la.  229,  20 

N.  W.  164)  236 

Hatheway's  Appeal  (52  Mich.  112)  163 
Haughey  v.  Slrickler  (2  W.  &  S  411)  68 
Haupf  V.  Howard  (3  Jones  Eq.  440)  7 

Haven  v.  White  (39  111.  509)  270 

Havens  v.  Hussey  (5  Paige  31)  134,  135 
Haviland  v.  Chace  (39  Barb  283)  539 

Hawes  r.  Dunton  (1  Bail.  146)  169 

V.  'I'illinghast  (1  Gray  289)  67 

V.  Waltham  (18  Pick.  451)  345 

Hawken  v  Bourne  (8  M.  &  W.  703)    140, 

142, 206 

Hartz  V.  Schrader  (8  Ves.  317)     2b8,  291, 

292,  300,  430 

Hawkins  v.  Appleby  (2  Sandf.  421)      1 16 

V.  Capron  (24  Atl.  400)  434 

V.  Hawkins  (4  Jur.  n.  s.  1044)        377 

V.  Lee  (8  Lea  42)  103 

Hawkshaw  v.  Parkins  (2  Swanst,  539)  152. 

154,  290 
Hawley  v  Campbell  (62  Cal.  442)        470 

V.  Cramer  (4  Cow.  717)  273,  409 

V.  Keeler  (02  Barb.  231)  57 

Hawn  V.  Land  &  Water  Co.  (74  Cal. 

418, 16  Pac   196)  378 

Hawtayne  v.  Bourne  (7  M.  &  W  595)  82 
Hay,  Ex  parte  (15  Ves.  4)  485,  488 

V.  Fairbairn  (2  B.  &  Aid.  193)      493 

V.  Mair  (Ross  Part.  639)  410 

Haycock  v.  Williams  (54  Ark.  384,  16 

S.  W.  3)  44,  53,  60 

Hayden.  Ex  parte  (1  Bro  Ch.  454)        329 

;;.  Cretcher  (75  Ind.  108)  168 

Hayes  v.  Bement  (3  Sandf.  394)    540,  541 

542 

V.  Flowers  (25  Miss   168)  257 

V.  Hayes  (19  Atl.  571)        223 

(•  Hever  (3  Sandf.  293)    1.35,  542 

V.  — -  (4  Sandf.  Ch.  485)   292,  295 


TABLE  OF  CASES, 


Xli 


Hayes  v.  Knox  ^41  Mich.  529,  2  N. 
W.  670)  429 

L\  Ueese  (34  Barb.  151)  508 

Ilavman,  Er  parte  (8  Ch.  D.  11)  475 

Haynes  v.  Brooks  (IIG  N.  Y.  487,  22 

N.  E.  1083)  136 
V.  Short  (88  Ala.  562,  7  So.  157)  213, 

306,  434 
Haythorn  v.  Lawson  (3  C  &  P.  190)  320, 

322 
Hayward  v.  French  (12  Gray  453)  87 

V.  Harmon  (17  111.  477)  164,  413 

Hazard  v.  Caswell  (93  N.  Y.  259)  244 

('.  Hazard  ( 1  Story  371)  47,  60 

Heald  y.  Warren  (22  Vt.  410)  90 

Heane  v.  Rogers  (9  B.  &  C.  580)  492 

Heap  y.  Dobson  ( 15  C.  B.  n.  s.  460)  170 
Heard  v.  Bowers  (23  Pick.  4-55)  223,  224 
Heartt  v.  Corning  (3  Paige  566)  215,  511, 

619,  520 

V.  Rankin  (41  la.  35)  354 

Heath,  Ex  parte  (4  Jur.  28)  494 

V.  Hall  (4  Taunt.  326)  470 

V.  Hubbard  (4  East  110)  303 

r.  Percival  (1  P.  Wms.  682,  1  Str. 

403)  387 

r.  Sansom  (2  B.  &  Ad.  291)     96,  179 

V. (4  B.  &  Ad.  172)  69,  375,  391, 

410,  462 

('.  Waters  (40  Mich.  457)  202,  4.35,  .527 

Heathcote  v.  Hulme  (1  Jac.  &  W.  722)  123, 

438 
Heaton,  Ex  parte  (Buck  386)  123 

Heckert  v.  Fegely  (6  W.  &  S.  139)  45,  63 
Heckman  v.  Messinger  (49  Pa.  465)  477 
Hcdderly,  Ex  parte  (2  Mont.  D.  &  D. 

487)  485 

Hedge's  Appeal  (63  Pa.  273)  58,  550 

Hedges  r.  Armistead  (60  Tex.  276)  334 
Hedley  v.  Bainhridge  (3  Q.  B.  316)  82,  84 


Heenan  v.  Nasli  (8  Minn.  407) 
Hefferman  v.  Brenham    (1  La.  Ann. 

146) 
Heffron  v.  Hanaford  (40  Mich.  305) 
Heflebower  v.  Buck  (64  Md.  15) 
Hefner  v.  Palmer  (67  III   161) 
Heimstreet  v.  Howland  (5  Uen.  68) 


111 

35 
83 
293 
104 
45, 
46 
223 


Hellebush  v.  Cougldin  (37  F.  R.  294) 
Heline  v.  Smith  (7  Bing.  714)  2.52,  254 
Heliuore  i'.  Smith  (35  Cb.  I).  436)  204,  237 
IleLsby  v.  Mears  (5  B   &  C.  504,  8  D. 

&  R.  289)  142,  427 

Hembree  v.  Blackburn  (16  Ore.  153, 

19  Pac.  73)  134 

Henderson,  Ex  parte  (4  Ves.  163)  21 

V.  Barbee  (6  Blackf.  28)  151 

/•.  Hudson  (1  Munf.  510)  6 

V.  Wild  (2  Camp.  561)    142,  144,  179 

Hendrick  v.  Gunn  (35  Ga.  234)  75 

Hendricks  r.  Isaac  (117  N.  Y.  411,  22 

N.  E.  1029)  24 

Hendry  v.  Turner  (35  Ch.  D.  355)         405 
Hendy  v.  March  (75  Cal.  566,  17  Pac. 

702)  66,  306 


Henecy,  Ex  parte  (1  Sch.  &  L  44)  467 
Henkel  v.  Hey  man  (91  111.  96)  546 

Henley  v.  Soper  (8  B.  &  C.  16)     219,  260, 

262,  265 
Henn  v.  Walsh  (2  Edw.  Ch.  129)  284,  285, 
293,  294,  295,  455 
Hennegin  v.  Wilcoxon  (13  La  Ann. 

576)  248 

Hennessy  i'.  Griggs  (1  N.  Dak.  52,  44 

N.  W.  1010)  375 
V.  Western   Bank   (6   W.  &   S. 


300 


135,  153 
424,  425 
o03, 

293 

4,  350 

59,  202,  393 

457 


Henniker  v.  Wigg  (4  Q.  B.  793) 
Henning  v.  Raymond  (35  Minn 

29  N.  W.  1.32) 
Henry  v.  Anderson  (77  Ind.  361 

V.  Bassett  (75  Mo.  89) 

V.  Birch  (9  Ves.  357) 

c.  Chapman  (16  S.  W.  543)  512 

V.  Jackson  (.37  Vt.  431)  552 

V.  Willard  (73  N.  C.  35)  69 

Henslee  v.  Cannefax  (49  Mo.  295)  125 
Hepburn,  In  re  (14  Q.  B.  D.  394)  497 

V.  Curts  (7  Watts  300)  270 

Heran  v.  Hall  (1  B.  Mon.  159)  222 

Herbert  v.  Hanrick  (16  Ala.  581)  151 

Herberton  v.  Jeperson  (10  Barr  124)  383 
Hercy  v.  Birch  (9  Ves.  357)  209 

Herfort  v.  Cramer  (7  Col.  483)  237 

Hergman  v.  Dettlebach  (11  How  Pr. 

46)  290 

Herkimer,  Tiie  (Stew.  Adm.  2.3)  55 

Herrick,  In  re  (13  N.  B.  R.  312)       96,  182 

y.  Ames  (8  Bos w.  115)  511 

Herries  v.  Jamieson  (5  T.  R.  556)  254,  267, 

336 
Herrin  v.  Eaton  (13  Me.  193)  303 

Herzog  v.  Sawyer  (61  Md.  344)  150,  151 
Hershfield  v.  Claflin  (25  Kas.  166)  343 
Hesham,  Ex  parte  (1  Rose  146)  474,  499 
Hesketh  v.  Blanchard  (4  East  144)  40,  60, 

2.54 
Hess  V.  Werts  (4  S.  &  R.  3-56)  549,  552 
Hewes  v.  Bayley  (20  Pick.  96)  312 

Hewitt  V.  Sturdevant  (4  B.  Mon.  453)  66 
Heyden,  Ex  parte  (Cooke  B.  L.  2-54)  496 
Heydon  v.  Heydon  (1  Salk.  392)  324,  339 
Heyhoe  r.  Burge  (9  C.  B  431)  5,40 

Hey  wood  v.  Watson  (4  Bing.  496)         180 

V.  Wingate  (14  N.  H.  73)  308 

Hiard  v.  Bigg  (xMann  Ind.  P.,  A.  (a)  5  )   88 


Hibbert  v.  Hibbert  (Coll.  Part.  203) 


209, 
279 
318 
196 
514 
171 


V.  Martin  (1  Camp.  538) 

Flicliens  v.  Congreve  (1  R.  &  M.  132) 
Hickes  v.  Cook  (4  Dow.  16) 
Hickman  v.  Kunkle  (27  Mo.  401) 

V.  Reineking  (6  Blackf.  387)  97,  172 

Hicks  V.  Cram  (17  Vt.  449)       30,  104,  107 
Hickson  v.  Aylward  (3  Moll.  14)  515 

Higgins  y.  Rector  (47  Tex.  .361)  445 

V.  Thomas  (8  Q.  B.  908)  303 

Higginson  v.  Air  (1  Desaiis.  427)  .300 

V.  Fabre  (3  Desaus.  93)  516 

Higinbotham  v.  Holme  (19  Ves.  88)     467 


xlii 


TABLE   OF   CASES. 


Hill,  Ex  parte  (1  Cox  300)  467 

, (3  Mont.  &,  A.  176)  488 

V.  Bell  (19  S.  W.  959)  17 

v.  Burniiam  (15  Ves.  218)  501 

V.  Draper  (54  Ark.  395,  15  S.  W. 

1025)  437 

Hollister  (1  Wils.  129)  219 

V.  MoPlierson  (15  Mo.  204)     247,  309 

V.  Manchester  &   S.  W.  W.  Co. 

(5  B.  &  Ad.  800)  555 

V.  Marsh  (40  Ind.  218)  307 

V.  Miller    (78  Cal.    149,  20  Pa. 

304)  204 
V.  Palmer  (56  Wis.  123,  14  N.  W. 

20)  259 

V.  Southerland  (1  Wash.  Va.  133) 

421 
V.  Stetler  (127  Pa.  145,  17  Atl. 

887)  538 

V.  Voorhies  (22  Pa.  68)       74,  95,  96, 

142 

V.  Wiggin  (31  N.  H.  292)      291,  325, 

338,  343 
Hilliker  v.  Francisco  (65  Mo.  598)  97 

V.  Loop  (5  Vt.  116)  273 

Hillock  V.  Trader's  Ins.  Co.  (54  Mich. 

531)  146 

Hills  v.  Bailey  (27  Vt.  548)  248,  258 

V.  McRae  (9  Hare  297)  330 

V.  Nash  (10  Jur.  148)  281 

V.  Ross  (3  Dall.  331)  145 

Hilton  V.  Eckersley  (6  E  &  B.  47)  401,  402 

V.  Granville  (4  Beav.  130)  291 

V.  Vanderbilt  (82  N.  Y.  591)  378 

Hinds  V.  Backus  (45  Minn.  170,  47 

N.  W.  655)  97 

V.  Terry  (Walk.  80)  304 

Hindy  v.  Margarity  (3  Barr  428)  19 

Hine  v.  Lart  (10  Jur.  106)  244 

Hinkie  v.  Reid  (43  Ind.  300)  206 

Hinton,  Ex  parte  (14  Ves.  598)  467 

, (De  Gex  550)  487 

f.  Law  (10  Mo.  701)  66 

Ilirbour  v.  Reeding  (3  Mont.  13)  7 

Hiscock  V.  Phelps  (49  N.  Y.  97)     333,  354, 

366 
Ch. 

135 
384 
403 

501 
223 

431 

26 


Hitchcock  V.   St.    John    (Hoff 

511) 
Hitew.  Hite  (1  B.  Mon.  179) 
Hixon  V.  Pixley  (15  Nev.  475) 
Hoadley   v.    County    Comm'rs    (105 

Mass.  519) 
Hoag  V.  McGinnis  (22  Wend.  163) 
Hoard    v.    Clam   (31    Minn.    186,    17 

N.  W.  275) 
Hoare  v.  Allen  (2  Dall.  102) 

V.  Dawes  (1  Doug.  371)      32,  53,  73, 

89, 107,  272 
V.  Oriental  Bank  (2  App.  Cas. 

589)  331, 488 

Hobart  r.  Andrews  (21  Pick.  526) 

V.  Howard  (9  Mass.  304) 

Hobbs  0.  Memphis  Ins.  Co.  (1  Sneed 

444) 
V.  Wilson  (1  W.  Va.  50) 


Hoby  V.  Roebuck  (7  Taunt.  157)  385,  429 
Hodenpyl  v.  Vingerhold  (Chit.  Bills 

489)  164 

Hodge  V.  Twitchell  (33  Minn.  389,  23 

N.  W.  547)  196 

Hodges  V.  Dawes  (6  Ala.  215)  45 

V.  Harris  (6  Pick  .360)  134 

V.  Hohnaii  (1  Dana  53)  137,  500 

V.  Parker  (17  Vt.  242)  527 

r.  Tarrant  (31  S.  C.  608,  9  S.  E. 

1038)  68 

Hodgkinson,  Ex  parte  (19  Ves.  291) 

40,  55,  95,  146,  271 

, (2  Rose  174)  146 

, (1  Coop.  101)  485,  498 

467 

520 

289 

8 

493 

514 

96 

274 


Hodgson,  tx  parte  (2  Bro.  Ch.  5) 

, (19  Ves.  206) 

, (2  Glyn  &  J.  21) 

V.  Murray  (2  Sim.  515,  3   Sim. 

382) 

V.  Temple  (5  Taunt.  181) 

Hodsden  v.  Staple  (2  T.  R.  697) 
Hoe  V.  Richards  (2  Beav.  305) 
Hoeflinger    v.    Wells    (47    Wis.  628, 

3  N.  W.  589) 
Hoff  1-.  Rogers  (67  Miss.  208,  7  So. 


Aetna  Ins.  Co.  (32  N 


515 
414 

235 
401 


358) 
Hoffman 

405)  ■  235 

V.  Duncan  (17  Jur.  825)  296 

V. (18  Jur.  69)  298 

V.  Pitt  (5  Esp.  25)  493 

V.  Toll  (28  N.  E.  567)  84 

Hogaboom  v.  Herrick  (4  Vt.  131)  417 

Hogan  r.  Reynolds  (8  Ala.  59)  143,  147 
Hogg  V.  Ellis  (8  How.  Pr.  473)       542,  544 

V.  Orgill  (34  Pa.  344)  163,  171 

Hogle  V.  Lowe  (12  Nev.  286)  354 

Holbrook,  In  re  (2  Low.  259)  182,  481,  488 

c.  Ins.  Co.  (25  Minn.  229)  110 

V.  Lackey  (13  Met.  1.32)  4.37 

r.  O' Berne  (9  N.  W.  291)  60 

V.  Wight  (24  Wend.  169)  124 

Holcroft  V.  HofTgins  (2  C.  B.  488)  88 

Holden  v.  McMakin  (1  Pars.  Cas  270) 

242,  297,  440 

V.  Peace  (4  Ired.  Eq.  223)      194,  527 

t:  Trust  Co.  (100  U.  S.  72)  203 

Holdernen  v.  Shackels  (8  B.  &C.  612) 

66,  137,  3.38,  500,  501,  503 
Holdredge  v.  Gwynne  (18  N.  J.  Eq. 

26)  204 

Holdsworth,  Ex  parte  (1  Mont.  D.  &  D. 

475)  65 

Holifield  V.  White  (52  Ga.  567)  53 

Holladay  v.  Elliott  (8  Ore.  84)  4(i2 

Holland  v.  Drake  (29  Oh.  St.  441)         135 

V.  Fuller  (13  Ind.  195)  349,  361 

V.  Holland  (6  Ired.  Eq.  407)  515 

V.  Teed  (7  Hare  50)  315 

V.  Weld  (4  Me.  255)  313 

HoUiday  v.  Camsell  (1  T.  R.  658)  304 
Hollister,  In  re  (3  F.  R.  452)  476 
HoUoway  v.  Rrinkley  (42  Ga.  226)  63 
V.  Turner  (61  Md.  217)          306,  522 


TABLE   OF    CASES. 


xliii 


Holme  V.  Green  (1  Stark.  488)  157 

V.  Hammond  (L.  R.  7  Ex.  218) 

41,65 
Holmes  v.  Blogg  (8  Taunt.  35)  17,  19 

V  Burton  ('J  Vt.  252)  85,  88,  90 

V.  Hawes  (8  Ired.  Eq.  21)       328,  338 

V.  Higgins  (1  B.  &  C.  74)  37,  59, 

200,  248,  252,  532,  549,  55;^ 
r.  Holmes  B.  &  A.  Mfg.  Co.  (37 

Conn.  278)  243 
V.  Kortlander  (64  Mich.  591,  31 

N.  W.  532)  83 

V.  McCray  (51  Ind.  358)  7 

c.  Mentze  (4  A.  &  E.  127)  338 

V.  Old  Colony  li.  U.  (5  Gray  58) 

28,62 

V.  Porter  (39  Me.  157)  107 

V.  Self  (79  Ky.  297)  360 

V.  United  Ins.  Co.  (2  Johns.  Cas. 

329)  54 

0.  Williamson  (6  M.  &  S.  158)      254, 

267,  268 
Holt  u.  Kernodle  (1  Ire.  199)  46 

V.  Ward  (2  Stra.  937)  20 

Holt's  Appeal  (98  Pa.  257)  352 

Holyoke  v.  Mavo  (50  Me.  385)  260 

Homer  v.  Wood  (11  Cush.  62)      172,  179, 
246,  274.  275 
Homfray  v.  Fothergill  (L.   R.   1   Eq. 

567)  208,519 

Honore  v.  Colmesnil  (7  Dana  201)       439, 

524 

V. (IJ.  J.  Marsh.  506)  194,  200, 

234 
Hood  V.  Aston  (1  Russ.  412)  181,  286, 

288  322 
Hook  V.  Stone  (34  Mo.  329)  '  134 

Hookham  v.  Pottage  (L.  R.  8  Ch.  91) 

237,  240,  243 
Hoop,  The  (1  C.  Rob.  196)  26 

Hooper  v.  Baillie(118  N.  Y.  413,  23 

N.  E.  569)  135 

IJ.  Lusby  (4  Camp.  66)  146 

Hope  1-.  Cust  (1  East  48)         96,174,176, 

185 
Hopkins,  Ex  parte   (104  Ind.  157,  2 

N.  E.  587)  335,  480 

V.  Banks  (7  Cow.  650)  163 

V.  Ciiittenden  ( 10  Tex.  189)  203 

(•.  Forsvtl)  (14  Pa.  34)  66 

V.  Smith  (11  Johns.  161)  38,  48 

V.  Thomas  (61  Mich.  389,  28  N. 

W.  147)  143 

I'.  Walt  (13  111.  298)  195 

Hopkinson  v.  Smith  (1  Bing.  13)  15 

Horbach  v   Huey  (4  Watts  455)    312,  313 
Horn  /;.  Baker  (9  East  215)  490,  493 

V.  Clarkson  (1  Cai.  276)  319 

V.  Newton  City  Bank  (32  Kas. 

518,  4  Pac.  1022)  84 
Horsey  v.  Heath  (5  Oiuo  353)  445 
Horsley  v.  Rush  (7  T.  R.  209)  150 
Horton  v.  Child  (4  Dev.  460)  92 
tj.  New  Pass  Gold  &  Silver  Min. 

Co.  (27  Pac.  376)  46 


243 
144 

516 

327 

65 
170 


136 

387 

262 
476 
160 
76,  93 
163 


Horton  v.  Soyer  (4  H.  &  N.  613)  148 

Horton's  Appeal  (13  Pa.  67;         128, 129, 

138,  391 
Horton  Mfg.  Co.  v.  Horton  Mfg.  Co 

(18  F.  R.  816) 
Hosack  V.  Rogers  (8  Paige  229) 

V. (9  Paige  468) 

Hoskins  v.  Johnson  (24  Ga.  625) 
Hot  Spring  R.  R.  v.  Trippe  (42  Ark 

465) 
Hotchkiss  V.  English  (4  Hun  369) 
Houghton,  Ex  parte  (n  Ves.  252)  490, 493 

c.  Houghton  (11  Sim.  491)    350,  362, 

364 
Houk  V.  Walker  (30  N.  E.  1080) 
Houlton's  Case  (1  Mer.  616) 
Hourguebie  v.  Girard  (2  Wash.  C 

212) 
Houseal's  Appeal  (45  Pa.  484) 
Houser  r.  Irvine  (3  W.  &  S  345) 
How  V.  Kane  (2  (Jhaudl.  222) 
Howard  i;  Cobb  (3  Day  309) 

V.  Priest  (5  Met.  582)     349,  350,  351, 

361,  362,  364 
Howe  V  Dupoyster  (7  S.  W.  627)     44,  46 

f.  Lawrence  (9  Cush.  553)     332,  478 

V.  Thayer  (17  Pick.  91)         370,  398, 

408,  412 
Howell  V.  Adams  (68  N.  Y.  314)  407 

V.  Brodie  (6  Bing.  N.  C  44)     11,  12, 

252 

r.  Com.  Bank  (5  Bush  93)  344 

V.  Harvey  (5  Ark.  270)    11,  276,  371, 

394,  455,  456,  457 

I'.  Howell  (15  Wis.  55)  355 

V.  Moores  (127  111.  67)  182 

V.  Reynolds  (12  Ala.  128)      312,  313, 

319 
V.  Sewing  Machine  Co.  (12  Neb. 

177,  10  N.  W.  700)  99 

V.  Teel  (29  N.  J.  Eq.  490)  336 

Howken  v.  Bourned  (8  M.  &  W.  703)  82 
Howland,  In  re  (L.  R.  1  Ch.  421)  491 
Hoxie  V.  Carr  (1  Sumn.  173)  327,  352, 
353,  354,  356,  358,  500 
I'.  Chaney  (143  Mass.  592,  10  N. 

E.  713)  237,  238,  244 
Hoyt  V.  Holly  (39  Conn.  326)  236 
V.  Hoyt  (69  la.  174,  28  N.  W. 

500) 
V.  McLaughlin  (52  Wis.  280,  8 

N.  W.  889) 

V.  Sprague  (103  U.  S  613) 

Hubbard,  Ex  parte  (13  Ves.  424) 

V.  Callahan  (42  Conn.  524) 

V.  Curtis  (8  la.  1)    325,  328,  331,  344 

V.  Guild  (1  Duer  662)     298,  300,  466 


350 

512 
442 

478 
203 


V.  Matthews  (54  N   Y.  43 

V.  Winsor  (15  Mich.  146) 

Hubbell  V.  Woolf  (15  Ind.  204) 
Hubert  v.  Nelson  (Dav.  B.  L.  8) 
Hudson  V.  Barrett  (1  Pars.  414) 
Huey  V.  Hoobach  (4  Watts  455) 
Huggett  V.  Montgomery  (5  B. 
446) 


281, 
&  P. 


187 
360 
181 
168 
509 
312 

126 


xliv 


TABLE  OF  CASES. 


Iluglies,  Ex  parte  (6  Ves.  617)  503 

V.  Ellison  (6  Mo.  4c;3)  134,  154 

V.  Wheeler  (8  Cow.  77)  483 

Huiskamp  v.  Moline  Wagon  Co.  (121 

U.  S.  310)  332 

Hulett   V.   Fairbanks    {40   Oh.    St. 

233)  35,  59 
Hull  V.  Garner  (31  Miss.  145)  155 
V.  Young  (30  S.  C.  121,  8  S.  E. 

695)  150,  151 

Human  v.  Cuniffe  (32  Mo.  316)  154 

Hume  V.  BoUand  (1  C.  &  M.  130,2 

Tyr.  575)  122 

V. (R.  &M.371)  123 

V.  Watt  (5  Kas.  34)  187 

Humes  v.  O'Bryan  (74  Ala  64)       69,  87, 


Humphre3-s  v.  Mooney  (5  Col.  282) 
Humphries  v.  Chastain  (5  Ga.  166) 

V.  McCraw  (5  Ark.  65) 

Hundley  v.  Farris  (103  Mo.  78,  15  S. 

W.  312) 
Hunnicutt  v.  Sumney  (63  Ga.  586) 
Hunsden  v.  Cheyney  (2  Vern.  150) 
Hunt  V.  Benson  (2  Humph.  459)    349, 

V.  Bridgham  (2  Pick.  581) 

V.  Chapin  (6  Lans.  139) 

V.  Clark  (6  De  G.  M.  &  G.  232) 

V.  Colorado  M.  &  E.  Co.  (1  Col. 

App.  120.  27  Pac.  873) 

V.  Gookin  (6  Vt.  462) 

V.  Hall  (8  Ind.  215) 

V.  Morris  (44  Miss.  314) 

V.  Ueilly  (50  Tex.  99) 

i\   Royal   Exch.  Assur.   Co.    (5 

M. &  S. 47) 

V.  Waterman  (2  R.  I.  298) 

Hunter,  Ex  parte  (1  Atk.  223) 


103 

50 

G81 

433 

476 
351 

492 

353 

159,  417 

82 

458 

404 

507 
143 

266 

258 


—  (Buck  552) 

—  (2  Rose  382) 
Galliers  (2  T.  R.  133) 
Pfeiffer  (108  Ind.  197) 
Rice  (15  East  100) 


164 

328,  338 
88,  181, 
496,  499 
472 
490 
467 
9 
494 


776) 


Waynick  (67 


la.  555,  25  N.  W. 

134,  135 


Huntington  v.  Potter  (32  Barb.  300)  383 
Hurd  y.  Darling  (14  Vt  214)  303 

V.  Haggerty  (24  111.  171)  172 

Hurley  v.  Walton  (63  111.  260)  53 

Hurt  V.  Salisbury  (55  Mo.  310)  50 

Husband,  Ex  parte  (2  Glyn  &  J.  4,  5 

Madd.  419)  487,  495,  496 

Hussey  ;;.  Dole  (24  Me.  20)  469 

V.  Jewett  (9  Mass.  100)  21 

Hutehins  v.  Bank  of  Tenn.  (8  Humph 

418)  405,  408,  413 

V.  Hope  (7  Gill  119)  512 

V.  Hudson  (8  Humph,  426)    143,  408 

V.  Sims  (8  Humph.  423)         407,  408 

V.  Turner  (8  Humph.  415)  125 

Hutchmson  v   Smith  (7  Paige  26)  123 

V.  Whitfield  (Hayes  78)  375 

Hutton  V.  Eyre  (6  Taunt  289)      144,  253, 

269 


Hutzler  v.  Phillips  (26  S.  C,  136,  1  S. 

E.  502)  476 

Huvver   v.  Dannenhoffer   (82  N.   Y. 

499)  244 
Hyat  V.  Hare  (Comb.  383)  139 
Hyde  v.  Brashear  (19  La.  402)  444 
V.  Stone  (9  Cow.  230,  7  Wend. 

354)  303,  304,  321 

Hyues  v.  Stewart  (10  B.  Mon.  429)        11, 

276,  277 
Hyrne  v.  Erwin  (23  S.  C.  226)  125 


I. 


Ibbotson  V.  Elam  (L.  E.  1  Eq.  188) 


208, 

519 

417)  302 

182,  404 

162,  380 

187 

159,  483 


Iddings  V.  Bruen  (4  Sandf.  Ch 

V.  Pierson  (100  Ind.  418) 

Ide  V.  Ingraham  (5  Gray  106) 
Ihmsen  v.  Negley  (25  Pa.  297) 
Ilsley  V.  Jewett  (2  Met.  168) 
Imperial  Refining  Co.  v.  Wyman  (38 

F.  R.  574)  549 

Inbusch  V.  Farwell  (1  Black  566)  338 

India  Bagging  Assoc,  v.  Kock  (14  La. 

Ann.  168)  566 

Indian  Chief,  The  (3  C.  Rob.  22)  26 

Indianapolis  Board  of  Trade  r.  Wal- 
lace (117  Ind.  599,  18  N.  E.  48)  477 
Ingliss  V.  Grant  (5  T.  R.  530)  491 
Ingraham  v.  Foster  (31  Ala  123)    12,  277 
Lines  V.  Lansing  (1  Paige  583)      430,  540 

V.  Stephenson  (1  M.  &  R.  145)      143 

Insurance  Co.  v.  Bear  (23  Fla.  50,  1 


So. 


318) 

.  Bennett  (5  Conn.  574) 


10,  345 
87,  180, 
184,  185 
315 


V.  Bold  (6  Q.  B.  514) 

V.  Camp  (64  Tex.  521) 

V.  Cotheal  (7  Wend.  72) 

V.  Drennan  (116  U.  S.  461) 

V.  Floss  (67  Md.  403, 10  Atl.  139) 

V.  Hildyard  (37  N.  J.  L.  444) 

V.  Kountz  Line  (4  Woods  268) 

V.  Ligon  (59  Miss.  305)   65,  168,  442, 

452 

V.  Murpliy  (5  Minn.  56) 

V.  Noves  (32  N.  H.  345) 

V.  Railroad  (104  U.  S.  146) 

V.  Richardson  (33  La.  Ann.  1308) 

V.  Riker  (10  Mich.  279) 

V.  Ross  (29  Oh    St.  429) 

V. (23  Ind.  179) 

V.  Scott  (1  Johns.  106) 

V.  Statliam  (93  U.  S.  24) 

V.  Towle  (65  Wis.  247) 

V.  Treat  (58  Me.  415) 

I'.  Wallis  (23  Md.  182) 

International  Bank  v.  Jones  (119  111. 

407,  9  N.  E.  885) 
Iowa  Seed  Co.  v.  Dorr  (70  la.  481,  30 

N.  W.  866) 
Irby  V.  Brigham  (9  Humph.  750) 


236 
318 
128 
236 
26 
65 


652 

20 

65 

08 

236 

63,  58 

236 

64,  57,  65 

26 

165 

170 

479 

347 

242 

165 


V.  Graham  (46  Miss.  425)       445,  446 


TABLE    OF    CASES. 


xlv 


Irbv  V.  Vining  (2  McC.  379)  407 

Irvin  V.  Nashville,  C.  &  S.  L.  Ry.  (92 

III.  103)  65 

Irvine  v.  Forbes  (11  Barb.  587)  189,  553 
Irving  V.  Excelsior  Ins.  Co.  (1  Bosw. 

507)  146,  222,  319 
V  Young  (1  Sim.  &  St.  333,  1 

L.  J.  Cli.  108)  618,  519 

Irwin  V  Conklin  (36  Barb.  64)  77 

v.  Williar  (110  U.  S.  499)  206 

Isaacs.  Ex  parte  (3  Sawy.  35)  429 

Isler  V.  Baker  (6  Humph.  85)       416,  417, 

461 
Ives  V.  Miller  (19  Barb.   196)     248,  251, 

254,  255 
Ivey  V.  Hammock  (56  Ga.  428)  225 

Ivy  V.  Walker  (58  Miss.  253)  249 


J. 


Jacaud  v.  French  (12  East  317)      144 
Jackson,  Ex  parte  (1  Ves.  Jr.  131)   429, 

483,  490 

15 

273 

803 

492 

477 

157 

67 

67,  436 

E. 

172)  293 

333 


,  In  re  (1  B.  &  C.  270) 
r.  Alexander  (8  Tex.  109) 
y   Anderson  (4  Taunt.  24) 
V.  Cator  (5  Ves.  688) 
f.  Clymer  (43  Pa.  79) 
V.  Fairhank  (2  H.  Bl.  340) 
I'.  Jackson  (7  Ves.  535) 

r. (9  Ves.  591) 

V.  Lahee  (114  111.  287,  2  N. 


V.  Litchfield  (8  Q  B.  D.  474) 

V.  McLean  (100  Mo.  130,  13  S. 

W.  393)  8,  9,  10 

V.  Mayo  (11  Mass.  147)  21 

v.  Porter  (2  Mart.  La.  200)  151 

V.  Robinson  (3  Mas.  138)     48,  54.  64, 

■  66 

V.  Sedgwick  (1  Swanst.  460)  207,  208, 

211,  215,  282,  500,  518 

i:  Sheldon  (9  Abb.  Pr.  127)  540 

V.  Stanford  (19  Ga.  14)  154,  356 

V.  Stopherd  (2  Cr.  &  M.  361,  4 

Tyrw.  330)  255,  263,  264,  607 
>:.  Todd   (56   Ind.  406,  75   Ind. 

472)  119 

Jacky  V.  Butler  (2  Ld.  Raym.  871)     324, 

339 
Jacobs  V.  Fatherstone  (6  W.  &  S.  346)     23 

(•  McBee  (2  Mc.VluU.  348)  91 

Jacobsen  v.  Hennekenius    (1   Bro.  P 

C.  4.;2)  30,  302 

Jacobson  v.  Williams  (1  P.  Wms.  382)  479 
Jacquin  v.  Buisson  (11  How.  Pr.  385)   300, 
437,  536,  643 
Jaffe  V.  Krum  (88  Mo.  669)  542 

Jaffray  v.  Frebain  (5  Esp.  47)  22 

Jaggers  I'.  Binnings  (1  Stark.  64)  164 

James  v.  Bostwick  (Wright  142)     93,  608 

V.  Stratton  (32  111.  202)  338 

V.  Woodruff  (2  Den.  574)  556 

Janes  v.  Whitbread  (11  C.  B.  406)  66 


Jannev   v.  Springer  (78   la.  617,  43 

N.  W.  461)  98 

Jaques  v.  Hulit  (16  N.  J.  38)  262 

r.  Marquand  (6  Cow.  497)  88,  89, 123, 

181 
Jarvis  v.  Brooks  (23  N.  H.  136)     336,  478 

V. (27  N.  H.  36)       350,  352,  369 

V.  Hyer  (4  Dev.  367)  338 

V.  Peck  ( 1  Hoff.  Ch.  479)  401 

Jauncey  v.  Knowles  (29  L.  J.  n.  s.  Ch. 

95)  529 

Jefferson,  The  (1  C.  Rob.  325)  602 

Jefferson  County  v.  Lewis  (20  Fla. 

980)  203 

Jefferson  Ins.  Co.  v.  Cotheal  (7  Wend. 


Jefferys  v.  Smith   (3  Russ.  158) 
Jeffreys  v.  Small  (1  Vern.  217) 


318 

391,  555 

2,  348, 

436 

V.  Smith  (1  Jac.  &  W.  298)     34,  298, 

372,  375 
Jeffries  V.  Castleman  (76  Ala.  262)  163 
Jell  V.  Douglass  (4  B.  &  Aid.  374)  312 
Jenkins  v.  Blizard  (1  Stark.  418)  407,  412 

I'.  Morris  (16  M.  &  W.  877)  111 

Jenness  v.  Carleton  (40  Mich.  343)        168 
Jennings  v.  Chandler  (10  Wis.  21)        284 

V.  Estes  (16  Me.  323)  68,  107 

Jennings's    Anpeal    (16   Atl    19,    2 

Monag.  184)  192 

Jennison  v.  Hapgood  (7  Pick  1)  603 

Jepson,  Ex  parte  (19  Ves.  224)  480 

V.   Beck   (78  Cal.  540,  21   Pac. 

184)  268 

Jervis  v.  White  (6  Ves  738)  517 

V. (7  Ves.  413)  288,  322 

Jessup  V.  Carnegie  (80  N.  Y.  441)  50 

V.  Cook  (1  Halst.  434)  194,  518 

Jewell  V.  Ketchum  (63  Wis.  628,  23 

N.  W.  709)  254 

Jevvett,  In  re  (15  N.  B.  R.  126)     72,  103, 
463,  469,  480 
Jewson  V.  Moulson  (2  Atk.  420)  479 

Johnes'  Case  (1  Mer.  619)  387 

Johns,  Ex  parte  (Cooke  B.  L.  634)         499 

V.  Battin  (30  Pa.  84)  151 

Johnson, /«  re  (16  Ch.  D.  648)  663 

v.  Barry  (95  111.  483)  140 

I'.  Beardslee  (15  Johns.  3)  159 

V.  Bernheim  (76  N.  C.  130)  540 

V.  Boone  (2  Harr.  172)        -  423 

V.  Buttler  (31  N.  J.  Eq.  35)  610 

V.  Byerly  (3  Head  194)  121 

V.  Corser  (34  Minn.  355,  25  N.  W. 

799)  50,  52 

V.  Crichton  (56  Md.  108)  97 

V.  Curtis  (3  Bro.  C.  C.  226)  515 

V.  Evans  (7  M.  &  G.  240)      338,  339, 

340.  375.  392 

V.  Hartshorne  (52  N.  Y.  173)  526,627 

y.  Hudson  (11  East  180)  8 

V.  Kaiser  (40  N.  J.  L.  286)  437 

V.  Ketchum  (3  Green  Ch.  364)      511 

V.  King  (6  Humph.  233)  345 

V.  Lewis  (6  F.  K.  27)  667,  661 


xlvi 


TABLE    OF   CASES. 


414 


204 
476 


Johnson  v.  McClary   (131   Ind.   105, 

30  N.  E.  888)  ,  08 

r.  McDonald  (2  Abb.  Pr.  290)      546 

c.  Miller  (16  Ohio  431)  45,  G2 

r.  Peck  (3  Stark.  66)  145,  179 

V.  Robinson  (68  Tex.  399,  4   S. 

W.  625)  134,  135 
r.  Shrewsbury  &c.  Ky.  (3  De  G. 

M.  &  G.  927)  279 

v.  Totten  (3  Cal.  343)  406,  413 

v.  Wilson  (54  111.  419)  248 

V.  Young  (20  W.  Va.  614) 

Johnson's  Appeal  (115  Pa.  129,  8  Atl 

36) 
Johnston,  In  re  (17  F.  R.  71) 

V.  Dutton  (27  Ala.  245)'  79,  189,  190 

(.-.  Freer  (51  Ga.  313)  305 

r.  Straus  (26  F.  R.  57)  332 

V  Trask  (116  N.  Y.  136,  22  N.  E. 

377)  1.39 

V.  Warden  (3  Watts  101)  68,  88 

Jonan  v.  Blanchard  (2  Rob.  La.  513)    540 
Jones,  Ex  parte  (18  Ves.  283)  480 

, (4  M.  &  S.  450)  490,  493 

V.  Bailey  (5  Cal.  345)  148,  149 

V.  Booth  ( 10  Vt.  268)  99,  173 

V.  Butler  (87  N.  Y.  613)  223 

r.  Caperton  (15  La.  Ann.  475)        35 

V.  Clark  (42  Cal.  180)  656 

v.  Clavton  (4  M.  &  S.  349)  336 

V.  Dexter  (1-30  Mass.  380)  204 

V.  Dwyer  (15  East  21)  493 

r.  Fletcher  (42  Ark.  422)  331 

V.  Harraden  (9  Mass.  540)  254 

V.  Herbert  (7  Taunt.  421)      142,  145 

V.  Howland  (8  Met.  377)  490 

r  Jackson  (14  Ala.  186)  125 

f.  Jones  (1  Ired.  Eq.  332)       234,  527 

V. (13  la.  276)  474 

r.  Latimer  (1  Jur.  980)  515 

»'.  Lees  (1  H.  &N.  189)  402 

V.  Lusk  (2  Met.  Ky.  356)     327,   328, 

338  339 

IV  McMichael  (12  Rich.  176)      7,  432 

V.  Mars  (2  Camp.  305)  183 

V.  Maund  (3  Y.  &  C.  347)  420 

V.  Morgan  (16  Jur.  238)  276 

r.  Neale  (2  Pat.  &  H.  339)  349, 361, 362 

r.  Noy  (2  M.  &  K.  125)  458,  459 

r.  Parsons  (25  Cal.  100)  138 

V.  Perry  ( 10  Yerg  69)  289 

V  Phoenix  Bank  (8  N.  Y.  228)        20 

i\  Shaw  (67  Mo.  667)  251 

r.  Smith  (31  S.  C.  527,  10  S.  E. 

340)  366 

v.  Thompson  (12  Cal.  191)  344 

V.  U.  S.  (7  How  681)  425 

V.  Walker  (10:5  U.  S.  444)         65,  461 

V.  Yates  (9  B.  &  C.  532)  98,  175,  179, 

270,  274,  275,  312,  455 
Jonge  Pieter,  Tiie  (4  C.  Rob.  79)  26 

Jons  V.  Perciiard  (2  Esp.  507)  36 

Jordan,  Tn  re  (2  F.  R.  319)  123 

V.  Lpwis  (2  Stew.  426)  224 

V.  Miller  (75  Va.  442)        7,  293,  306 


Jordan  v.  Wilkins  (3  Wash.  C.  C.  115)  78 
Joseph  V.  South wark  F.  &  M.  Co  (10 

So.  327)  404.  405 

Josephs  V.  Pebrer  (3  B.  &  C.  639)     650, 

554,  556 
.loslvn  r.  Smith  (13  Vt   353)  159 

Joy  V.  Campbell  (1  Sch.  &  L.  328)  494 
.Joyce  V.  Williams  (14  Wend.  141)  172 
Judd  V.  Gibbs  (Hill.  Bkr.  114)  479 

V.  Harris  (6  Vt.  185)  250 

Judge  V.  Braswell  (13  Bush  67)  83,  84 
Judson  r.  Adams  (8  Cush.  556)  45 

V.  Gibbons  (5  Wend.  224)  22 

Julia,  Tiie  (1  C.  Rob.  181)  26 

, (8  Cranch  195)  310 

Julian  V.  Wrightsnian  (73  Mo.  569)  335 
Julio  t'.  Ingalls  (1  All.  41)  7 


K. 


Kahn  r.  Boltz  (39  Ala.  66) 

V.  Central  Smeltmg  Co.  (102  U.  S. 

641) 
Kaiser  v.  Lawrence  Savings  Bank  (56 

la.  104) 

V.  Wilhelm  (2  Mo.  App  696) 

Kallenbach  r.  Dickinson  (100  111.  427) 
Kane  v.  Scofield  (2  Cai.  .368) 
Kansh,  Ex  parte  (32  S.  C.  437,   11 

S.  E.  298) 
Karthaus  v.  Ferrer  (1  Pet  228) 
Kaskaskia  Bridge  Co.  v.  Shannon  (6 

III.  lo) 
Kasson  v.  Brocker  (47  Wis.  79,  1  N. 

W.  418) 
Katsch  V.  Schenck  (13  Jur.  668)     47, 

Katz  V.  Brewington  (71  Md.  79,  20 
Atl.  139)  199, 

Kauffman  v.  Fisher  (3  Grant  302) 
Kay  V.  Pienne  (3  Camp.  123) 
Kayser  v.   Maugliara   (8  Col.  3-39,  7 

Pac.  286) 
Kean  v.  Johnson  (1  Stock.  401) 
Keane  r  Boycott  (2  H.  Bi.  511) 

r.  Fisher  (9  La.  Ann.  70) 

Keasley  v.  Codd  (2  C.  &  P.  408) 
Keating  v.  Marsh  (1  Mont.  &  A.  670) 

Kedie,  Ex  parte  (2  Deac.  &  Ch.  321) 

Keeler  v.  Niagara  Ins.  Co.  (16  Wis. 

623) 
Keene  v.  Harris  (17  Ves.  342) 
Keene's  Executors,  Ini-e  (3  l)eG.  M. 

&  G.  272) 
Keeney  v.  Home  Ins.  Co.  (71  N.  Y. 

396)  236, 

Keesley  v.  Cadd  (2  C.  &  P.  401 ) 
Kehoe  v.  Carville  (51  N.  W.  166) 
Keith  V.  Armstrong  (65  Wis.  225,  26 

N.  W.  445) 

V.  Fink  (47  III.  272)  332, 

Kelby  v.  Steel  (5  Esp.  194) 


164 

34 

50 
523 
160 
168 

.351 
148 

164 

151 
295, 
605 

280 
160 

23 

204 
106 
16 
273 
553 
122, 
123 
483, 
484 

2.35 
242 

25 

292 
649 
404 

332 
490 
253 


TABLE   OF    CASES. 


xlvii 


Kell  V.  Nainby  (10  B  &  C.  20)    22,  108, 

109 
Kelloy  V.  Bourne  (15  Ore.  476, 16  Pac. 

40)  351 

r.  Flory  (51  N.  W.  181)  m2 

V.  Greenleaf  (3    Storv  93)     97,  194, 

200,  205,  276,  3S4 

V.  Ilurllmrt  (5  Cow.  534)    32,  74,  •iO  ) 

V.  Kaiiifinun  (18  Pa.  351)       266,  208 

Kelloffg  V.  Faiicher  (23  Wis.  21)  97 

.  Griswol.l  (12  Vt.  291)  60 

r.  Laveii.lcT  (15  Neb.  256)  203 

r.  Moore  (97  111.  282)  254 

t.:  Olson  (31  Minn.  103,  24  N.  W. 

364)  231 

Kellogg    Newspaper   Co.   v.    Farrell 

(88  Mo.  594)  46,47 

Kelly  r.  Eckford  (5  Paige  548)  283 

Kelsliaw  i:  Jukes  (8  L.  T.  n.  s.  387)        57 
Kenil)le  v.  Farren  (6  Bins?.  141)     223,  224 

c.  Kean  (6  Sim.  333)  278,  279 

Kemegs  v.  Hicliards  (11  Barb.  312)       173 
Kemiiierer  v.   Kemnierer  (52   N.  W. 

194)  526 

Ketnp  ('.  Carnley  (3  Duer  1)  135 

V.  Coffin  (3  Greene  190)  381 

Kendall,  Ex  parte  (17  Ves.  614)    827,  330, 
482,  485,  603 

V.  Hackwortb  (66  Tex.  499)  350 

V.  Rider  (35  Barb.  100)  350 

Kendrick  v.  Campbell  (1  Bail.  522)       162 

V.  Tarbell  (27  Vt.  512)   111,  182,  183 

Kennebec  Co.  r.  Augusta  Ins.  &  B. 

Co.  (6  Gray  204)  147 

KenTiedy  v.  Boliannon   (11   B.  Mon. 

120)  409 

c.  Kennedy  (3  Dana  239)      371,  456, 

509 

V.  Lee  (3  Mer.  441)  237,  238,  240,441 

V.  McFadon  (3  H.  &  J.  194)  266,  268 

c.  Porter  (109  N  Y.  526,  17  N.  E. 

426)  205,  374 

Kenney  v.  Altwater  (77  Pa.  34)     140,  407 
Kenniston  c  Avery  (16  N.  H.  117)       159, 

160 
Kensington,  Ex  parte  (14  Ves.  447) 

329,  478 

. (2  Ves.  &  B.  79)  315 

Kenton   Fiirnaoe  R.  R.  &  Mfg.  Co.  v. 

McAlpin  (5  F   R.  737)  146 

Kentucky,  Bank  of,  v.  Brooking  (2 

Litt.  41j  169,  180,  184,  206 

Kepler  v.  Erie  Dime   Sav.  &  L.  Co 

( 101  Pa.  602)  368 

Kerper  v.  Wood  (48  Oh.  St.  613,  29 

N.  E.  501)  160,161 

Kerr  i\  Haverstick  (94  Ind.  178)  203 

('.  Hawthorne  (4  Yeates  170)         447 

V.  Potter  (6  Gill  404)  47 

Kerrick  v.  Stevens  (55  Mich.  167,  20 

N.  W.  888)  13 

Kerridge  v.  Hesse  (9  C   &  P.  200)         426 
Kershaw  y.  Kelsey  (100  Mass.  661)         26 

V.  Matthews  (2  Russ.  62)      295,  432, 

449 


Ketcham  v.  Clark  (6  Johns.  144)  127, 138, 

403,  405,  407 

Ketchum,  In  re  (1  F.  R.  815)  121,  125 

V.  Durkee  (1  Ilotf.  Ch.  528)     88,  426 

V. ( 1  Barb.  Ch.  480)  436 

Keye's  Appeal  (65  Pa.  196)  624 

Kibbler  v.  De  Forest  (6  Ala.  92)  185 

Kidd  V.  Johnson  (100  U.  S.  617)  244 

Kidder  o.  Page  (  48  N.  H.  380)      185,  332 
Kidwelly  Coal  Co.  v.  Raby  (2  Price 

93) 
Kieran  v.  Sanders  (6  A.  &  E    515) 

Kiffin  V.  Willis  (4  Mod.  379) 
Kilbreth  v.  Root  (33  W.  Va.  600,  11 

S.  E.  21) 
Kilby  V.  Wilson  (R.  &  M.  178) 
Kilgore  v.  Powers  (5  Blackf.  22) 
Kilgour  V.  Finlyson  (  1  H.  Bl.  155) 

Killam  v.  Preston  (4  W.  &  S.  14)  262,  264", 

619 
Killefer  v.  McLain  (70  Mich.  508,  38 
^  N.  W  455)  525 

Kimball  v.  Hamilton  Ins.  Co  (8  Bosw. 
4'.i5) 

6-.  Walker  (30  111  482) 

V.  Whitnev  ( 15  Ind.  280) 

Kimberly  v.  Arms  (129  U.  S.  512) 


554 

109 
126 

293 
120 

203 
4U2, 
406 


135 

87 
445 
193. 
196 

278 
82,84 


r.  Jennings  (6  Sim.  340) 

Kimbro  v.  Bullitt  (22  How.  256) 
Knig.     See  Re.v. 

\  Ex  parte  (17  Ves.  115)  472,  499 

, (1  Rose  212)  497 

, (Cooke  B.  L.  634)  499 

V.    Accumulative    Ass.    Co.    (3 

C   B  jj.  s.  151)  373 

r.  Faber  (22  Pa.  21)  97,  172 

V.  Hamilton  (16  111.  190)  200 

'•.  Hoare  (13  M.  &  W.  494)  92 

V    Leighton   (100  N.  Y.  386,  3 

N.  E  594)  378,  435,  512 

V  Lowry  (20  Barb.  532)  66 

V.  Rock  (2  Price  198) 

V   Sarria  (7  Hun  167) 

V.  Smith  (4  P.  &  C.  108)       144, 


476 
547 
383, 
385 
354 


I'.  Weeks  (70  N.  C.  372) 

r.  White  (63  Vt.   158,  21   Atl. 

535)  376,  512 

v.  Winants  (71  N.  C.  469)  9 

Kingman  v.  Spurr  (7  Pick  235)        10,  11, 
127,  128,  129,  130.  138,  555 
Kingsbury  ;;.  Tharp  (61  Mich.  216,  23 

N.  W.  74)  97 

Kinkead,  In  ?v  (3  Biss.  405)  24 

Kinloch  v.  Hamlin  (2  Hill  Ch.  19)  607 
Kinnersley  r.  Mussen  (5  Taunt  264)  155 
Kinney  v.  Maher  (156  Mass.  252,  30 

N.  E.  818)  202 

V.  Robinson  (66  Mich.   113,  38 

N.  W.  172)  505 

V.  Hobison    (49   Mich.   247.   18 

N  W   120)  252 


xlviii 


TABLE   OF   CASES. 


Kinsman  v.  Barker  (14  Ves.  579) 

V.  Dallam  (5  Mon.  382) 

Kirby,  Ex  parte  (Buck  511)  97, 

V.  Cannon  (9  Iiid.  371) 

V.  Carr  (3  Y.  &  C.  184)  459, 

y.  Coggs well  (1  Cai.  505)       16y, 

V.  Hewitt  (26  Barb.  007) 

V.  IngersoU  (1  Doug.  Mich.  477, 

1  Hare  Midi.  172)  134, 
V.  L.  S.  &  M.  S.  R.  II.  (8  E.  K. 

462) 

V. (14  F.  R.  261) 

Kirk  V.  Blurton  (9  M.  &  VV.  284) 

r.  Hiatt  (2  Ind.  322)  160, 

V.  Hodgsdon  (3  Johns.  Ch.  400) 

Kirkley  v.  Hodgson  (1  B.  &  C.  580) 
Kirkman  v.  Booth  (11  Beav.  273) 

V.  Xewstead  (1  Esp.  117) 

V.  Snodgrass  (3  Head  370) 

Kirkpatrick  v.  McEIroy  (41  N.J.  Eq. 

539,  7  Atl.  647) 

r.  Turnbull  (Add.  259) 

Kirkwood   v.  Cheetham    (2  F.  &  F. 

798) 
Kirwan  v.  Henry  (16  S.  W.  828) 

V.  Kirwan  (2  Cr.  &  M.  617,  4 

Tyrw.  491)     95,387,414,419,429, 

Kitchen  v.  Bank  (14  Ala.  233) 

r.  Bartsch  (7  East  63) 

Kittrell  i'.  Blum  (77  Tex.  336, 1 4  S.  W. 

69) 
Kleinhaus   v.   Generous   (25  Oh.  St. 

667) 
Kline  r.  Bebee  (6  Conn.  494) 
Klotz  V.  Macredy  (39  La.  Ann.  638, 

2  So.  203) 
Klumpp  V.  Gardner  (114  N.  Y.  153, 

21  N.  E.  99) 
Knapp  V.  Edwards  (57  Wis.  191,  15 

N.  VV.  140) 

V.  McBride  (7  Ala.  19)  171, 

Knebell  r.  White  (2  B.  &  C.  15)    280, 
Knerr  v.  Hoffman  (65  Pa.  126) 
Knight   V.    Marjorihanks    (11    Beav. 

322,  2  McN.  &  G.  10) 

V.  Plymouth  (3  Atk.  480,  Dick. 

120) 

Knott  V.  Morgan  (2  Keene  213)  244, 
Knowles  v.  Haughton  (11  Ves.  168) 
9,  281,  508, 
Knowlton  v.  Reed  (38  Me.  246)  66, 
Knox  V.  Buffington  (50  Li.  320) 

V.  Campbell  (1  Barr  366) 

V.  Simmons  (4  Yeates  477) 

Kountz  V.  Holthnnse  (85  Pa.  235)427, 
Kramer  v.  Arthurs  (7  Barr  165)  35, 
Krapp  V.  Aderholt  (42   Kas.  247,  21 

Pac.  1063) 
Krebell  v.  White  (2  Y.  &  C.  15) 
Krebs  v.  O'Grady  (23  Ala.  726) 
Kritzer  v.  Sweet  (67  Mich.  617,  24 

N.  W.  764) 


514, 
515 
112 
175 

22 
460 
311 

69 

135 

435 

935 
110, 
113 
162 

189 
493 
458 
313 
407 

293 
132 

103 

199 

482. 
484 
203 
465 

135 

87 
20 

439 

135 

199 
432 

281 
339 

195 

453 
322 

510 
433 
81 
66 
476 
429 
369 

527 

510 

23 

103 


Krueger,  In  re  (2  Low.  66)     103, 108,  387, 

403,  475 
V.  Speith  (8  Mont.  482,  20  Pac. 

664)  136,  437 

Kruschke  v.  Stefan  (53  N.  W.  679)     350, 

351 
Kuhn  V.  Newman  (49  la.  424)  231 

V.  Weil  (73  Mo.  21-3)  125 

KuU  V.  Thompson  (38  Mich.  685)  131 

Kutz  c.   Dreibelbis  (126  Pa.  335,  17 

Atl.  6U9j  249,  434 
Kyle  V.  Kyle  (1  Gratt.  526)  520 
V.  Roberts  (6  Leigh  495)  508 


Labouchere  v.  Dawson  (L.  R.  13  Eq. 

322)  237 

Lacey,  £"x;;a>Ve  (6  Ves.  628)  514 

Lachaise  v.  Marks  (4  E.  D.  Smith  610)  539, 

642,  543,  544,  546 

La  Choraette  v.  Thomas  (1  La.  Ann. 

120)  639.  543,  545 

Lacy  (,-.  Le  Brun  (6  Ala.  904)        307,  309 

V.  McNeile  (4  D.  &  R.  7)       142,  162, 

163,  164 

V.  Waring  (25  Ala.  625)  349 

V.  Wolcott  (2  D.  &  R.  458)     180,  467 

Ladbroke,  Ex  parte  (2  Glyii  &  J.  81)  487 
Ladd  V.  Griswold  (9  111.  25)  327 

La  Flex  v.  Burss   (77   Wis.   538,  46 

N.  W.  801)  60 

Laflin  &  Rand  Powder  Co  v.  Steytler 

(146  Pa.  434,  23  Atl.  215)  538 

Lafon  V.  Chinn  (6  B.  Mon.  305)  88 

Laiond  v.  Deems  (81  N.  Y  507)  62 

LaForet,  Ex  parte  (Cooke  B.  L.  251)  488 
La  Forest,  Ex  parte  (Cooke  B.  L.  276)  496 
Lagow  I'.  Patterson  (1  Blackf.  262)  1.55 
Lake  v.  Argyll  (6  Q.  B.  477)  103 

>\  Gibson  (1  Eq.  Abr.  290)     2-32,  436 

i-. (3  p.  Wms.  158)  4.36 

Lamar  r.  Hale  (79  Va.l47)  34, 204, 205, 393 
Lamalere  v.  Caze  (1  Wash.  C.  C.  435, 

2  Browne  128)  260,  262,  264,  518,  519 
Lamb  r.  Durant  (12  Mass.  54)         66,  131 

V.  Grover  (47  Barb.  317)  222 

Lambden  v.  Sharp  (9  Humph.  224)  151 
Lambert  v.  Griffith  (50  Mich.  286,  15 

N.  W.  458)  136 

Lambert's  Case  (Godb.  244)  131 

Lambeth  v.  Vawter  (6  Rob.  La.  127)  163 
Lamoille  V.   R.   R.  v.  Bixby  (55  Vt. 

235)  345 

Lamont  v.  Fullam  (133  Mass.  58.3)  53 
Lancaster  Bank  ;;.  My  ley  (12  Pa.  544)  361 
Lancaster    Canal    Co.,    Ex   parte    (1 

Deac.  &  Ch.  411,  Mont.  116)  554 

Lanckton  v.  Wolcott  (6  Met.  305)  485 
Lane,  Ex  parte  (De  Gex  300)  484,  488 

f.  Felt  (7  Gray  491)  .346 

I'.  Jones  (9  Lea  627)  360 

V.  Lenfest  (40  Minn  375,  42  N. 

W.  84)  344 


TABLE    OF    CASES. 


xlix 


Lane  v.  Tyler  (49  Me.  108)  260 

V.  Williams  (2  Vern.  277)      168,  170 

Lang  V.  Keppell  (1  Biun.  123)  414 

V.  Oppenljeim  (90  Ind.  47)  248 

(,'.  Waring  (17  Ala    145)  184 

l: (25  Ala.  025)      34'),  356,  361, 

363,  365,  366,  367 
Langan  v.  Hewitt  (13  Sm.  &  M.  122)     78, 

185 
Langdale,  Ex  parte  (18  Ves.  300,  2 

Hose  444)  40,  51,  107,  302,  492 

Lange  v.  Kennedy  (20  Wis.  279)  402 

Langliam  (;.  Bewett  (Cro.  Car.  68)  22 

Lanier  i'.  McCabe  (2  Fla.  32)     82,  84,  97, 

172 
Laiisdale  i'.  Brashear  (3  T.  B.  Mon. 

330)  34 

Lansing  v.  Gaine  (2  Johns.  800)      82,  100, 

172,  381,  403,  406,  532 

I'.  McKillup  (7  Cow.  416)     145,  164, 

413 

V.  Ten  Eyck  (2  Johns.  300)       81,  96 

Lapham  v.  Green  (9  Vt.  407)  273,  317 

Larazzabcl  y.  Gorbea  (2  Swanst.  572)  502 
Larkins  v.  Rhodes  (5  Port.  195)  6 

Lascaridi  v.  Gurney   (11  C.   B.  n.  s. 

890)  5 

Lash  V.  Lambert  (15  Minn.  416)  203 

Lassiter  r.  Jacknian  (88  Ind.  118)  201 
Latham  i-.Kenniston  (13  N.  H  203)  70,  254 
Lauder  i\  Logan  (123  Pa.  34,  16  Atl. 

44)  538 

LautTer  v.  Cavett  (87  Pa.  479)  .360 

Laugher  v.  Pointer  (5  B.  &  C.  570)  124 
Lausldin  v.  Loreng  (48  Pa.  275)  433 

Laverty  v.  Burr  (1  Wend.  529)      96,  172, 

174,  185 
Law  V.  Cross  (1  Black  533)  198 

V.  Ford  (2  Paige  310)     131,  297,  298, 

300 
Lawe's  Case  (1  De  G.  M.  &  G.  421)  207 
Lawless  y.  Mansfield   (1  Dru.  &  W. 

557)  516 

Lawrence,  Ex  parte  (1  De  Gex  269)      493 

i-.  Clark  (9  Dana  257)  268 

V.  Dale   (3    Johns.    Ch.   23,    17 

Joiins.  427)  147 

V.  Sebor  (2  Cai.  203)  318,  319 

V.  Taylor  (5  Hill  107)  153,  367 

V.  Trustees  of  Orphan  House  (2 

Den.  .577)  3-30 

Lawson  v.  Lovejoy  (8  Me.  405)  16,  18 
V.  Morgan  (1  Price  303)  286,  291,292 


Leaf,  Ex  parte  (1  Deac.  176) 
V.  Coles  (1  De  G.  M.  &  G.  171) 


406 


Laycock,  Ex  parte  (1  Kose  32) 
Layfield's  Case  (1  Salk.  292) 
Layton,  Ex  parte  (6  Ves.  438) 

i:  Hnstings  (2  Harr.  147) 

Lea  V.  Guice  (13  Sm.  &  M.  656) 


480 

79 

272 

150,  1.54 

74,  82, 
164 
95 
95,  4M4 


Leabo  v.  (I  ode  (67  Mo.  126) 
Leach  i:  Church  (15  Oh.  St.  169) 

1-.  Leach  (IS  Pick.  68)    196,  204,-384, 

443,  531 

V   Milburn  Wagon  Co.  (14  Neb. 

106,  15  N.  W.  232)  334 


459 
360 
2 

126 

'2-2 


Leaf's  Appeal  (105  Pa.  505) 
Leake  v.  Craddock  (3  P.  Wms.  158) 
Leame  ".  Bray  (3  East  593) 
Lean  v.  Schulz  (2  W.  Bl.  1195) 
Learned  v.  Ayres  (41   Mich.  677,  3 

N.  W.  178)  248 

Leather  Cloth  Co.  v.  Lorsont  (L.  R. 

9  Eq.  345)  566 

Leavitt  v.  Peck  (3  Conn.  124)    78,  80,  108 
Leaycraft  v.  Dempsey  (15  Wend.  83) 

515 
Lechmere   v.   Fletcher  (1  Cr.   &  M 

635)  92, 487 

Ledam  v.  Hodges  (4  McLean  51)      76,  93 
Lee,  Ex  pane  (2  Rose  54)  478 

V.  Davis  (70  Ind.  464)  201 

V.  Dolan  (39  N.  J  Eq.  193)  522 

V.  First  National  Bank  (45  Kas. 

8,  25  Pac.  196)  84 

r.  Gibbons  (14  S.  &  R.  Ill)  317 

V.  Lashbrooke  (8  Dana  214)         202, 

234,  384,  527 

V.  Onstott  (1  Ark.  206)  151 

V.  Page  (30  L.  J.  Ch.  857,  7  Jur. 

768)  5.30 

i".  Reed  (4  Dana  112)  511 

V.  Stowe  (57  Tex.  444)  380,  400 

V.  Wilkins  (65  Tex.  29.5)  344 

Leeds  &  T.  R.  R.  y.  Fearnley  (4  Ex. 

26) 
Lees,  Ex  parte  (1  Deac.  705) 

v.  Laforest  (14  Beav.  2.50) 

Le  Fanu  v.  Malcomson  (1  H   L.  C. 

637)  320,  321 

Lefever  v.  Underwood  (41  Pa    505) 

193 
Lefevre  v.  Boyle  (3  B.  &  Ad.  877) 

■  V.  Castagnio  (5  Col.  564) 

Lefevre 's  Appeal  (69  Pa.  123) 
Leftwich  v.  Clinton  (4  Lans.  176) 
Legge  v.  Harlock  (12  Q.  B.  1015) 
Leggott  V.  Barrett  (15  Ch.  D.  306) 
Leidy  v.  Messinsrer  (71  Pa.  177) 
Leigh  V  Everhart  (4  T.  B.  Mon.  379) 


20 

21 

383 


316 
46,  60 
6 
3>8 
244 
237 
248 


Leighton  v.  Wales  (3  M.  &  W.  545) 


289 


224 
3:14 


Leinkauff  v.  Munter  (76  Ala.  194) 
Leiserinan  v.  Bernheimer  (113  N.  Y. 

39,  20  N.  E.  869)  522 

Leithauser  v.   Baumeister  (47  Minn. 

151,  49  N.  W.  660)  414 

Lemiette  u.  Starr  (6Q  Mich    539,  33 

N.  W.  8.32)  P3 

Lenow  r.  Fones  (48  Ark.  557,  4  S  W. 

5f^)  3f.:; 

Lcri'ck  V.  Shaftoe  (2  Esp.  468)  273 

Le  Rov  r.  Jolm>on  (2  Pet.  186)      88,  T", 

111,  169,  180,  228,  40.; 

Lesernian  r.  Bernheimer  (113  N.  Y. 

3'.t.  2')  \   v..  S(V.i)  ■J->3 

Le^he  u.  Wil^y  (47  N    Y.  649)  li'.t 


TABLE   OF    CASES. 


Lessig  V.  Langton  (Bright.  N.  P.  191) 


McMaster   (49 


292 


Levy  V.  Alexander  (10  So.  394) 

V.  Cadet  (17  S  &  R.  126) 

V.  Lock  (5  Daly  46) 

V.  Pyne  (1  C  &  M.  453) 

V.  Walker  (10  Ch.  D.  436) 

V.  Williams  (79  Ala.  171) 

Lewis,  In  re  (8  N.  B.  H.  546) 

V.  Alexander  (51  Tex.  578) 

V.  Anderson  C^O  Oil.  St.  281) 


N. 


Letts-Fleteher  Co. 

N.  W.  1035)  134 

Levally  v.  FAWs  (13  la.  544)  474 

Leverson  v.  Lane  (13  C.  B.  n.  s.  278) 

97,  173 
Levett,  Ex  parte  (1  Glyn  &  J.  185)  520 
Levi  y.  Karrick  (8  la.  150)  237 

V.  Latham  (15  Neb.  509, 19  N.  W. 

4b0)  83,  84 

Levick's  Appeal  (2  Atl.  532)  144 

Levine  v.  Michel  (35  La.  Ann.  1121) 

284 

104 

160 

537 

82,84 

243 

350,  351 

336 

432 

333, 

366 

Chapman  (19  Barb.  252,  16 

Y.  369)  320,  322 

V.  Cline  (5  So.  112)  333 

V.  Conrad  (11  la.  153)  474,  476 

('.  Culbertson  (11  S.  &  R.  48)        437 

V.  Greider  (51  N.  Y.  231)  57.  60 

V.  Langdon  (7  Sim.  421)        240,  241, 

242,  243,  244,  289,  440,  441 

I'.  Lee  (3B.  &  C.  291)  23 

(,'.  Moffett  (11  111.  392)  201 

V.  Pead  (1  Ves.  Jr.  19)  511 

y.  Reilly  (IQ.  B.  349)  376,380 

V.  Westner  (29  Mich.  14)  87 

Liberty  Savings   Bank   v.  Campbell 

(75  Va  534)  98 

Liddel,  Ex  parte  (2  Rose  34)  272,  487, 

496 
Liddell  v.  Crain  (53  Tex.  549)  118 

Liddiard,  Ex   parte  (4   Deac.   &  Ch. 

603)  95,  484 

Lieb  V.  Craddock  (87  Ky.  525,  9  S.  W. 

8.38)  68,  105,  409 

Ligare  v.  Peacock  (109  111.  94)     201,  222, 
374,  376,  393,  527 
Lightfoot  V.  Heron  (3  Yoim^e  586)         27 
Lightoller,  In  re  (1  Madd.  346)  474 

Lill  (•  Egan  (89  111.  609)  89 

Lilly  r.  Kroesen  (3  Md.  Ch.  83)  515 

Lime    Rock    Bank  v.  Phetteplace  (8 

R.  I.  5(i)  354 

Lime  Rock  Ins.  Co.  i'.  Treat  (58  Me 

415)  170 

Lindli  r.  Crowly  (29  Kas.  756)  171 

Lindley  v.  Davis   (6   Mont.   45-3,   13 

Pac.  118)  350,  .351 

Lindsey  v.  Edminston  (25  111.  359)  -30 

V.   Stranahan   (129  Pa.  635,   18 

Atl.  524)  201 

Lindus  V.  Bradwell  (5  C.  B.  583)  111 

Lineweaver  v.  Slagle  (64  Md.  465,  2 
Atl.  693)  537,  538,  543 


Cox  (6  Barr  360) 
Hastie  (2  Caines  246) 


Linford  v.  Linford  (4  Dutch.  113)  345,476 
Lingard  v.  Bromley  (1  Ves.  &  B.  114)  269 
Lingen  v.  Simpson  (1  Sim.  &  S.  603)  137, 
278,  338,  489,  504 
Lintner  v.  Milliken  (47  111.  178)  57 

Linton  v.  Hurley  (14  Gray  191)  118 

Litchfield,  In  re  (1  Atk  87)  473 

Littell  r.  Fitch  (11  Midi.  525)  172 

Little  V.  McPherson  (76  Ala  552)  335,361 

V.  Snedecor  (52  Ala.  167)  354 

Littlewood  v.  Caldwell  (11  Price  97)     28-3, 
291,  45-5,  520 
Livermore  v.  Rand  (26  N.  H.  85)  425 

Liverpool  B.  &  R.  P.  Nav.  Co.  v.  Agar 

(14  F.  R.  615,  4  Woods  201)  2 

Livingston  v.  Blanchard  (130  Mass. 
341)  222 

35 

96,  172 

5.32 

r.  Lvnch  (4  Johns   Ch.  573)  191,553 

V.  Radcliff  (6  Barb.  201)  94,  96 

V.  Roosevelt  (4  Johns.  251)       37,  84, 

85,  86,  96,  132 
Livingston  n-  Ralli  (5  E.  &  B.  132)       148, 

219  220 
Lloyd,  Ex  parte  (1  Mont  &  A.  494)    '  133 

,  In  re  (22  F.  R.  88)  478 

, (22  F.  R.  90)  476 

V.  Archbowie  (2  Taunt.  324)  32,  273, 

498 

V.  Ashbv  (2  C.  &  P.  138)  75 

V. (2  B.  &  Ad.  23)  170 

(,'.  Bellis  (37  Eng.  L.  &  Eq.  545)   124 

V.  Loaring  (6  Ves.  773)  188,  553, 

V.  Passingiiam  (Coop.  156)  512 

Lobb,  Ex  parte  (7  Ves.  592)  483,  485 

Lobdell  r.  Slawson  (90  Mich.  201,  61 

N.  W.  349)  99 

Locke  V.  Lewis  (124  Mass.  1)  98,  115 

V.  Stearns  (1  Met.  560)  116,  118, 

124 
Lockwood  r.  Bartlett  (130  N.  Y.  340,   29 


N.  E.  257) 

V.  Comstock  (4  McLean  383) 


125 

379, 
381 
68 


V.  Doane  (107  111.  235) 

v.  Middlesex  Assur.    Co.   (47 

Conn.  553)  235 

Lockyer  ;;.  Savage  (2  Str.  947)  467 

Lodge,  Ex  parte  (1  Ves.  Jr   165)  489,  491, 

497 

r.  Dicas  (3  B.  &  Aid.  611)  94,387, 

414,41.5,416,  482,484,486 
V.  Weld  (139  Mass.  499,  2  N  E. 

95)  242,  243 
Loeb  I).  Morton  (63  Miss.  280)  113 
V.  Pierpoint  (58  Ga.  469,  12  N. 

W.  544)  134,  135 

Loeschigk  v.  Addison  (19  Abb    Pr. 

169)  4.34 
Logan  V.  Bond  (13  Ga.  192)  88,  89 
V.  Dixon  (73  Wis.  533,  41  N.  W. 

713)  306 
V.  Greenlaw  (25  F.  R.  299)     363,  364 


TABLE   OF   CASES. 


315 

128 
1»5 
404 
197, 
287 
381 

32  "2 
■34(5, 


479 


Logan  V.  Mason  (6  W.  &  S  9)  425 
V.   Trayser  (77  Wis.  579,  46  N. 

W.  877)  2G8 

Lomas  v.  liradshaw  (9  C.  B.  620)  255 

Loomis  V.  Loomis  (26  Vt.  198)  162 

V.  McKenzie  (31  la.  425)       293,  425 

V.  Marsliall  (12  Conn.  69)     45,  47,  53 

V.  rierson  (Harp.  470)  145 

London  Assur.  Co.  v.   Bold  (6  Q.  B. 

614) 

V.   Drennan   (116  U.  S.  461) 

Long  V.  Carter  (3  Ired.  238) 

y.  Garnett  (59  Tex.  229) 

V.  Majestre  (1  Johns.  Ch.  305) 

V.  Story  ( 10  Mo.  636)  378, 

Longman  v.  Pole  (1  D.  &  L.  126,  1  M. 

&  M.  223)  117,179,275 

Lord  V.  Baldwin  (6  Pick.  348)       273 

446,  498 

Loring  v.  Brackett  (3  Pick  403)  145 

Loscombe  v.  Russell  (4  Sim.  8)   280,  281, 

285,  455,  458,  510 

Lothrop  V.  Adams  (133  Mass.  471)        119 

r.  VVigtitman  (41  Pa.  297) 

Lottimer  v.  Lord  (4  E.  D.  Smith  183) 

800 
Louden  v.  Ball  (93  Ind.  232)  336 

Louisville,  Bank  of,  v.  Hale  (8  Bush 

672)  354 

Love  n.  Moynehan  (16  111.  277)  23 

v.  Payne  (73  Ind.  80)  128 

V.  Rliyne  (86  N.  C.  676)  508 

Lovejoy  v.  Bowers  (11  N.  H.  404)  137,337 

V.  Spoffurd  (93  U.  S.  430)       387,  405 

Lovelace's  Case  (W.  Jones  268)  150 

Lovell  V.  Hicks  (2  Y.  &  C.  481)  244 

Lowe  V.  Fairlie  (2  Madd.  102)  614 

V.  Lowe  (13  Bush  688)  360 

V.  Miller  (3  Gratt.  205)  304 

V.  Peers  (4  Burr.  2225)  224 

Lowell  V.  Hicks  (2  Y.  &  C.  481)  117 

Lowery  v.  Drew  (18  Tex.  786)  151 

Lowman  v.  Sheets  (124  Ind.  416,  24 

N.  E.  351)  84 

Lowndes  v.  Tavlor  (1  Madd.  423)  290 

Lowry  v.  Brooks  (2  McC.  421)  55,  60 

Loyd\;.  Freshfield  (2  C.  &  P.  325)  87,  88, 
142,  143,  181 
Lucas  V.  Bank  of  Parien   (2  Stew. 

280)  146,  153,  406,  412,  413 
V.  Beacli  (1  Scott  N.  R.  350,  1 

M.  &G.  417)  252,553 

/)   De  la  Cour  (1  M.  &  S.  249)       164 

c.  Laws  (27  Pa.  211)       325,  339,  340 

V.  Sanders  (I  McMuU.  311)    150,  151 

Lucht  V.  Behrens  (28  Oh.  St.  231)         451 
Ludington  r.  Boll  (77  N.  Y.  138)  95 

Ludlow  V.  Cooper  (4  Oh.  St.  1)      85,  349, 

362 

V.  Simond  (2  Caines  Cas.  1)  150 

Ludwick  V.  Huntsenger  (5  W.  &  S. 

51)  203 

Lumberman's  Bank  v.  Pratt  (51  Me. 

563)  380 


Lumley  v.  Wagner  (5  De  G.  &  S.  485) 

278,  279 
Lunt  V.  Stevens  (24  Me.  534)  143 

Lupton  V.  Janney  (13  Pet.  381)  612 

Lusk  V.  Smith  (8  Barb.  670)  381 

Lutterloh  v.  Mcllhenny  Co.  (74  Tex. 

73,  11  S.  W.  1063)  400 

Lyles  V.  Styles  (2  Wash.  C.  C.  224) 

131,  194 
Lyman  v  Lyman  (2  Paine  11)  37,  201 

Lynch  v.  Bitting  (6  Jones  Eq.  238) 

215,  513 

V.  Thompson  (61  Miss.  354)      59,  87 

Lyndon  v.  Gorham  (1  Gall.  367)  325,  339, 

345,  346 
Lyon  V.  Haines  (5  M.  &  G.  641)  376 

V.  Knowles  (3  B   &  S.  656)  41 

V.  Tweddell  (17  Ch.  1).  529)  529 

Lyons  v.  Murray  (95  Mo.  23,  8  S.  W. 

170)  248 

Lysagt  t'.  Walker  (5  Bligh  n.  s.  1)         424 
Lyster  v.  Dolland  (1  Ves.  Jr.  434)  436 

Lyth  V.  Auit  (7  Ex.  667)        416,  482,  484 


M. 


Mabbett  v.  White  (12  N.  Y.  442)  135 

McAUester  v.  Sprague  (34  Me.  296) 

144 
McAllister  v.  Montgomery  (3  Hayw. 

94)  .362 

McArthur  v.  Ladd  (6  Ohio  614)      60,  151, 

257 

V.  Bloom  (2  Duer  151)  23 

McBride  v.  Hagan  (1  Wend.  826)  149,  152, 

15.5,  307 
V.  Protection  Ins.  Co.   (22  Conn. 

248)  107 
V.  Stradley  (103  Ind.  465,  2  N. 

E.  358)  201 

McCall  V.  Moss  (112  111.  493)         393,  527 
McCart  v.  Lewis  (2  B.  Mon.  267)  151 

McCarty  v.  Emien  (2  Yeates  190,  2 

Dall.  277)  345 

V.  Nixon  (2  Dall.  65)  443 

V.  Seisler  (130  Ind.  63,  29  N.  E. 

407)  134 
McCauley  v.  Cleveland  (21  Mo.  438)  55 
V.  McFarlane    (2  Desaus.    Ch. 

239)  489,  497 

McCleery  v.  Thompson  (130  Pa.  443, 

18  Atl.  735)  155,  168 

McClelland  v.  Remsen   (14  Abb.  Pr. 

332)  184 

McClung  V  Capehart  (24  Minn.  17,  1 

N.  W.  123)  306,  506 

McClure  v.  Hill  (.36  Ark.  268)  125 

McClurg  V.  Howard  (46  Mo.  365)  160 

McClurkan  v.  Byers  (74  Pa.  405)  119 

McCoU  V.  Oliver  (1  Stew.  510)      260,  263 
McConkey  v.  Rogers  (Bright.  N.  P. 

450)  270 
McConnell  v.  Denvers  (35  Cal.  366)  556 
V.  Hector  (3  B.  &  P.  113)         26,  309 


lii 


TABLE   OP   CASES. 


McConnell  v.  McConnell  (11  Vt.  290) 
McCoombe  v.  Dunch  (2  Dall.  73) 
McCord  V.  Field  (27  U.  C.  C.  P.  391) 
McCormick's  Appeal  (55  Pa.  252) 

(57  Pa.  54) 

V.  Stofer  (12  S.  VV.  151) 

McCov  V.  Brennan  (61  Mich.  362,  28 

N.  W.  129) 
McCracken  v.  Ware  (3  Sandf.  688) 

McCrillis  v.  How  (3  N.  H.  348) 
McCulloh  V.  Dashiell  (1  H.  &  G.  96) 

330,  444,  446,  479, 
McCuUough  V.  Sommerville  (8  Leigh 
415)  131,  135, 

McCuUy  V.  McCully  (78  Va.  159) 
McCutchin  v.  Bankston  (2  Ga.  244) 

McCutchon  v.  Davis  (8  S.  W.  123) 
McDermot    v.   Lawrence  (7  S.  &  R. 

438)  354, 
McDonald  v.  Eggleston  (26  Vt.  154) 
V.  Holmes  (22  Ore.  212,  29  Pac. 

738)  248, 

V.  Matney  (82  Mo.  358) 

V.  Millandon  (5  La.  406) 

McDowall   V.  Wood    (2   N.  &  McC. 

242) 
Mace  V.  Heath  (30  Neb.  620,  46  N.  W. 

918) 
McElroy  v.  Ludlum  (32  N.  J.Eq.  828) 

V.  Swope  (47  F.  R.  380) 

McElvev  V.  Lewis  (76  N.  Y.  373)  293, 
McEvoy  V.  Bock  (37  Minn.  402,34  N. 

W.  740) 
McEwan  v.  Western  Ins  Co.  (1  Mich. 

N.  P.  118) 
McFadden  v.  Hunt  (5  W.  &  S.  468) 
;;.  Leeka  (48  Oh.  St.  513,  28  N. 

E.  874)  131,  549, 

McFarland  v.  Bate  (45  Kas.  1,  25  Pac. 

238) 

V.  Crary  (8  Cow.  258) 

V.  Stewart  (2  Watts  111) 

McGar  v.  Drake  (5  Rep.  387) 
McGaw  V.  Marshall  (7  Humph.  121) 
McGee,  Ex  parte  (9  Ves.  697) 
MacGeorge     v.    Harrison     Chemical 

Mfg.  Co.  (141  Pa.  575,  21  A.tl.  671) 
McGhees  v.  McCutchen  (82  Ga.  788, 

9  S,  E.  785) 
MoGill  V.  Brown  (Bald  66) 
McGinn  v.  Shaeffer  (1  Watts  412) 
McGinnis  v.  Farrelly  (27  F.  R.  33) 
McCrowan    v.   Bank   of   Ky.  (5  Litt. 

271) 
V.  Myers  (66  la.  99,  23  N.  W. 

282) 
McGowan,  &c.  Co.  v.  McGowan  (22 

Oh.  St.  370)  240, 

McGraw   v.   Pulling  (1    Freem.   Ch. 

357)  5, 
McGregor  v.  Bainbrigge  (7  Hare  164) 
V.  Cleaveland  (5  Wend.  475) 


469 
476 
82 
474, 
476 
368 
223 

335 
296, 

297 

16 

327, 

500 

153 
352 
69, 
164 
344 

369 
151 

306 
46 
74 

23 

168 

162 

7 

392 


235 
270 

554 

480 
117 
237 
90 
16 
315 

554 

98 

553 

21 

538 

168 

293 

242 

211 
234 

82 


McGregor  v.  Ellis  (2  Disn  286) 
McGuire  v.  Ramsey  (9  Ark.  418) 
McGunn  v.  lianlin  (29  Mich.  476) 
Machell,  Ex  parte  (2  Ves.  &  B.  216) 

V.  Kinnear  (1  Stark.  499) 

Mcllreath    v.   Margetson    (4    Doug. 

278) 
Mcllroy  v.  Adams  (32  Ark.  315) 
Mclntire  v.  McLaurin  (2  Humph.  71) 

V.  Oliver  (2  Hawks  209) 

Mclver  v.  Humble  (16  East  169)    48, 

412, 
McKacy  v.  Hebb  (42  Md.  227) 
McKay  v.  Bloodgood  (9  Johns.  285) 

V.  Joy  (70  Cal.  581,  11  Pac.  832) 

V.  Overton  (65  Tex.  82)       251 

526, 
V.  Rutherford  (6  Moo.  P.  C.  413, 

13  Jur.  21) 
McKee  v.  Bank  of  Mount  Pleasant  (7 

Ohio  175)  93,  149, 
V.  Hamilton  (33  Oh.  St.  7) 

r.  Stroup  (Bice  291)       142,144. 

Mackeller  v.  Wallace  (8  Moo.  P.  C. 

378) 
Mackenna  v.  Parkes  (36  L  J.  n.  s.  Ch. 

366) 
McKenzie  v.  Garrison  (10  Rich.  234) 

V.  Nevins  (22  Me.  138) 

McKinney  v.  Alvis  (14  111.  34) 

V.  Baker  (9  Ore.  74)  231, 

V.  Brights  (16  Pa.  399) 

McKnight   v.    McCutcheon   (27   Mo. 

4.36) 
V.  Ratcliffe  (44  Pa.  156) 


117, 
McKowan  u.  McGuire  (15  La.  Ann. 

637) 
Maclae  v.  Sutherland  (3  E.  &  B.  1 ) 

113, 
McLanahan  v.  Ellery  (3  Mass  269) 
McLane  v.  Abrams  (2  Nev.  199) 
McLean,  In  re  (15  N.  B.  R.  333)    330, 

r.  Fleming  (96  U.  S   245) 

McLellan   v.   Cumberland  Bank  (24 

:\Ie.  566) 
McLinden  v.  Wentworth  (51  Wis  170, 

8  N.  W.  118) 
McMaster  v.  Vernon  (3  Duer  249) 
McMillan  r.  Hadley  (78  Ind.  590) 
McMinn  v.  Richmonds  (6  Yerg  9) 
McMuUan    v.   McKenzie   (2   Greene 

368) 
McNamara  v.  Eustis  (46  Minn.  311, 

48  N.  W.  1123) 
McNaughten   v.  Partridge  (11   Ohio 

223)  91,  92,  93,  149.  151, 

McNaughton's  Appeal  (101  Pa.  550) 
McNair  y.  Fleming  (3  Dow  229)    170, 

V.  Piatt  (46  111.  211) 

r.  Rewey  (62  Wis.  167,  22  N.  W. 

339) 
V.  Wilcox  (121  Pa.  437,  15  Atl. 

575)  98, 

McNeely  v.  Haynes  (76  N.  C.  122) 


131 

352 

9 

478 

316 

194 
125 
311 
160 
107. 
492 
508 
150 
434 
255. 
527 


155 
165, 
182 
179 

511 

530 
470 
425 

482 
335 
173 

250 
540 

4.34 
110, 
183 
312 
203 
500 
243 

144 

427 

92 

368 

16 

107 

69 

508 
99 

182 
97 

335 

308 
119 


TABLE   OF   CASES. 


liii 


McNeil  V.  Congregational  Society  (66 

Cai.  105)  368 
V.  Reid  (9  Bing.  68,2  Moo.  &  Sc. 

89)  11,210 

McNeish  v.  Hulless  Oat  Co.  (57  Vt. 

316)  131, 433 

McNutt  V.  K'ng  (59  Ala.  597)  469 

V.  Stravhorii  (39  Pa.  269)  134 

Macon  Co.  o.  Kodgers  (84  Mo.  66)  203 
McPlierson    v.    Katlibone    (7    Wend. 

216)  69,  107 

McUae   v.  McKenzie    (2   Dev.  &  B. 

232)  280,  509 

McSherry  v.  Brooks  (46  Md  103)  255 
McStoa  V.  Mattliews  (50  N.  Y.  166)  103 
McVicker   v.  Cone  (21    Ore.  353,  28 

Pac.  76)  49 

McWiiorter   i'.    McMahan  (1  Clarke 

Ch.  400)  150,  153 


Macy  V.  Combs  (15  Ind.  469) 

/•.  De  Wolf  (3  W.  &  M.  193) 

Maddeford  y.  Austwick  (1  Sim.  89) 

Maddick  v.  Marshall  (16  C.  B.  n.  s. 

387,  17  C.  B.  N.  s.  829) 
Maddock  v.   Asibury   (32  N.  J.   Eq 

181) 
Maddox  i-.  Dent  (4  Md.  Ch.  543) 
Madgwick  v.  Wimble  (6  Beav.  495) 


60 

66 

195, 

199 

103 

360 
516 
297, 
300 


Madison  County  Bank  v.   Gould  (5 

Hill  309)  538,  540,  546,  547 

Maffet  V.  Leuckel  (93  Pa.  468)  96 

Magill  V.  Merrie  (5  B.  Mon.  168)  405,  406 
Magovern  v.  Robertson   (116   N.   Y. 

61,  22  N.  E.  398)  61 

Mahnke  v.  Neale  (23  W.  Va.  57)  512 

JMainwaring  v.  Newman   (2  B.  &  P. 

120)  270,  307 
Mair  v.  Glennie  (4  M.  &  S.  240)  55,  60 
Maise  v.  Garner  (Mart.  &  Y.  383)  289 
Major  V.  Hawkes  (12  111.  298)  386 
V.  Todd  (84  Mich.  85,  47  N.  W. 

841) 
Malcomson  v.  Malcomson  (L.  R.  1  Ire. 

228) 
Maley  v.  Newman  (5  D.  &  R.  317) 
Mallory  v.   Hanauer   Oil    Works    (86 

Tenn.  598,  8  S    W.  396)  27, 
V.  Russell  (71  la.  63,  32  N.  W. 

102) 
Maloney  v.  Bruce  (94  Pa.  249) 
Maltby  v.  N.  W.  &  R.  Co.  (16  Md. 

422) 
Manahan  r.  Gibbons  (19  Johns.  109) 
Manchester  Bank,  Ex  parte  (12  Ch.  D. 

917) 
Manchester  Co.,  Ex  parte  (L.  R.  18 

Eq.  249, 
Manck  v.  Manck  (54  111.  281) 
Manderson's  Appeal  (113  Pa.  631) 
Manderston  v.  Robertson  (4  M.  &  R. 

440) 
Mandeville  v.  Mandeville  (35  Ga  243) 
Maneely  v.  McGee  (6  Mass.  143) 


393 

183 
462 

564 

366 
537 


253 

442 

481 
354 
563 

157 
52 

483 


Manhattan  Brass  Co.  v.  Sears  (45  N. 

Y.  797)  46 

Manhattan   Co.  v.  Laimbeer  (108  N. 

Y.  578,  15N.  E.  712)  546 

V.  Ledyard  (1  Cai.  191)  168 

Manley  v.  Ins.  Co.  of  N.  Amer.  (1 

Lans.  20)  235 

Mann  v.  Bowen  (85  Ga.  616,  11  S.  E. 

862)  259 

V.  Connell  (1  Whart.  388)  371 

V.  Flanagan  (9  Ore.  425)  201 

f.  Locke  (11  N.  H.  246)  160,162 

Manning  i-.  Gasharie  (27  Ind.  399)        550 

V.  Hays  (6  Md.  5)  171,  187 

V.  Wadsworth  (4  Md.  59)   209,  210, 

252,  257 
Mansfield  u.  Watson  (2  Clarke  111)  27 
Manuf.  &  Mech.  Bank  v.  Gore  (15 

Mass   75)  119 

V.  Winship  (5  Pick.  11)  114,  171 

Manville  v.  Parks  (7  Col.  128)     34,  52,  87 
Many,  7«  re  (17  N.  B.  R.  514)  125 

Marble  v.  Lypes   (82  Ala.  322,  2  So. 

701) 
Marietta  Iron  Works  v.  Lattimer  (25 

Oh.  St.  621) 
Marine  Bank  i:  Ogden  (29  III.  248) 
Marine  (l^o.  of  Chicago  v.  Carver  (41 

III.  66) 
Mariott  v.  Shaw  (Com.  277) 
Markham  v.  Gehan  (42  Mich.  74) 

V.  Jones  (7  B.  Mon.  456). 

V.  Merritt  (7  How.   j\Iiss.  487) 

354,  355,  358,  362 
Marks  v.  Stein  (11  La.  Ann.  509)  248 
Marlett  v.  Jackman  (3  AH.  290)  432,  433, 

436,  446 
Marquand  v.  New  York  Mfg.  Co.  (17 

Johns.  525)     10,  127,  128,  129,  138,  391, 
463,  465,  466,  555 
Marsh  v.  Davis  (33  Kas.  326,  6  Pac. 

612)  7,  350 

V.  Gold  (2  Pick.  285)  35,  147 

V.  Hutchinson  (2  B.  &  P.  226)  22,  23 

V.  Keating  (1  Mont.  &  A.  592,  2 

CI.  &  F.  250)  122 

V.  N.  W.  Ins.  Co.  (3  Biss.  351)        57 

.Marsh's  Appeal  (69  Pa.  30)  193,  201 

Marshall  v.  Colman  (2  J.  &  W.  266)   111, 

227,  257,  284,   285,  288,  455,  456,   457, 

507,  510 


68,  104 


203 
28 

100 
324 
345 
104 
349, 


V.  Johnson  (33  Ga.  500) 

V.  Lambeth  (7  Rob.  La.  471) 


216 
544, 
545 
372 
22 


V.  Marshall  (2  Bell  Com.  641) 

V.  Button  (8  T.  R.  545) 

Marten  v.  Van  Schaick  (4  Paige  479)  237, 

241,  293,  296,  297,  298 

Martin  v.  Brydges  (3  C.  &  P.  83)  157 

V.  Fewell  (79  Mo  401)  49,  404 

V.  Kirk  (2  Humph.  529)         379,  381 

V.  Mayo  (10  Mass.  137)  18,  21 

V.  Meyer  (45  F.  R.  435)  334 

1-.  Morris  (62  Wis.  418,  22  N.  W. 

525)  364 


liv 


TABLE   OF   CASES. 


Martin  v.  Muncy  (40   La.  Ann.   190,  3 

So.  640)  168 

r.  Hoot  (17  Mass.  227)  159,  163 

V.  Smith  (25  W.  Va.  579)  ^03 

V.  Thrasher  (40  Vt.  460)  148 

V.  Walton  (1  McC.  10)  378,  406 

Martyn  v.  Gray  (14  C.  B.  n.  s.  824)  103 
Marvin  y.  Trumbull  (Wright  386)  353 
Marx  V.  Goodnough  (16  Ore.  26,  16 

Pac.  918)  343,  344 

Mason  r.  Oonnell  (1  Whart.  381)    10,  128, 

142,  3y6,  555 

r.  Eldred  (6  Wall.  231)  76 

r.  Hafkt'tt  (4  Nev.  420)  57 

I'.  Jouett  (2  Dana  107)  144 

V.  Potter  (26  Vt.  722)  45,  60 

V.  Kumsey  (1  Camp.  384)  111 

V.  Wicl<ersham  (4  W.  &  S.  100)       96 

:  V.  Wright  (13  Met.  306)  16 

Masonic  Savings  Bank  v.  Bangs  (10 

S.  W.  633)  526 

Masson,  Ex  parte  (1  Rose  159)  487 

Master  v.  Kirton  (3  Ves.  74)  286,  288,  874, 

456 
Mathews  v.  Felch  (25  Vt.  536)  103,  107 
Mathewson  v  Clark  (6  How.  122)  10,  128, 

138,  556 

Matlock  V.  Matlock   (5  Ind.  403)  325,  327, 

349,  354,  361 

Matteson  v.  Nathanson  (38  Mich.  377)  168, 

489 

Matthews,  Ex  parte  (3  Ves.  &  B.  125)    77, 

106,  271,  498 

r.  Dare  (20  Md.  273)  402 

r.  Hunter  (67  Mo.  293)  364 

I'.  Wallyn  (4  Ves.  118)  516 

Mattison  v.  Farnham  (44  Minn.  95,  46 

N.  W.  347)  65,  452 

Maude  v.  Rodes  (4  Dana  144)  456 

Maughlin  v.  Tyler  (47  Md.  545)  134 

Mauldin  v.  Branch  Bank  (2  Ala.  511)  97, 
172,  180.  184,  185,  406 
Maund  v.  Allies  (5  Jur.  860)  515 

Maunev  v.  Coit  (80  N.  C.  300)  168 

V.' (86  N.  C.  463)  46 

Mawman  ik  Gillett  (2  Taunt.  327)  30,  278 
Mawson  r.  Blane  (10  Ex.  206)  18 

Maxey  v.  Strong  (53  Miss.  280)  103 

Maxwell  r.  Day  (45  Ind.  509)  94,  95 

V.  Deare  (8  Moo.  P.  C.  368)  488 

V.  Jameson  (1  B  &  Aid.  51)  269 

V.  Port  Tennant  Co.  (24  Beav. 

495)  384 

May  V.  Chapman(16  M.  &  W.  355)  175, 181 

V.  Hewit  (33  Ala.  161)  111 

V.  New  O    &  C.   R.  R.  (44  La. 

Ann.  444,  10  So.  7.69)  351 

Mayberry  v.  Bainton  (2  Harr.  24)  185 

V.  Willoughby  (5  Neb.  368)  160 

Mayer  v.  Clark  (40  Ala.  259)  327,  38'^ 
V.  Garber  (53  La.  689,  6  N.  W. 

68)  231 

Mayhew  v  Earaes  (1  C.  &  P.  550)         164 

V.   Herrick  (7  C.  B.  229)  303,  321, 

338,  339,  340 


Maymott  v.  Maymott  (  9  Jur.  n.  s. 

4',)6) 
Maynard  v.  Fellows  (43  N.  H.  255) 


Maynoketa  v.  Willey   (35  la.  323) 
Mayou,  Ex  parte  (4  De   G.  J.   &  S 

664) 
Mayrant  v.  Marston  (67  Ala.  453) 
Mead  v.  Nat.  Bank  (6  Blatcli.  180) 

V.  Tomlinson  (1  Day  148) 

>:.  Wheeler  (13  N.  H.  351) 

Meaders  v.  (iray  (60  Miss.  400) 
Meador  v.  Hughes  (14  Bush  652) 


202 
170, 

182 
328 


Meagham,  In  re  (1  Sch.  &  L.  179) 


332 
47 

487 
89,  91 
224 
203 
29,  59, 
471 
467 


Meagher  v.  Reed  (14  Col.  335,  24  Pac. 


681) 
Mealier  v. 


Cox   (37  Ala.  201) 


7,  12,  84 

129,  371, 

454,  566 

150 
249,  279 

514 


Mears  v.  Serocold  (7  T.  R.  208) 
Meason  v.  Kaine  (63  Pa.  335) 
Mebane  v.  Mebane  (1  Ired.  Eq.  408) 
Mechanics'  Bank  v.  Barnes  (86  Mich. 

632,  49  N.  W.  475)  187 

V.  Foster  (44  Barb.  87)  87,  180 

V.  Hildreth  (9  Cush.  359)  382 

V.  Seaton  (1  Pet.  299)  469 

Mechanics'  &  Traders'   Ins.   Co.  v. 

Richardson  (33  La.  Ann.  1308)  98 

Medberry  r.  Soper  (17  Kas.  869)  81 

Medbury  r.  Watson  (6  Met.  246)  313,  320 
Medill  V.  Collier  (16  Oh.  St.  599)  50 

Meech  v.  Allen  (17  N.  Y.  300)  836 

Meehan  v.  Valentine  (145  U.  S.  611)     46, 

58,61 
Meggett  V  Finney  (4  Strobh.  220)  162 
Meguiar  v.  Helm  (14  S.  W.  949)  212,  231 
Melioruchi  v.  Royal  Ex.  Ass.   Co.  (1 

Eq.  Abr.  8)  516 

Mclledge  v.  B.  Iron  Co.  (5  Cush.  170)  m 
Mellen  v.  Whipple  (1  Gray  317)  317 

Mellersh  v.  Keen  (27  Beav.  236)    396,  460 

V. (28  Beav.  453)  237,  238 

Melville  v.  Brown  (15  Mass.  82)  446 

Menagh  v.  Whitwell  (52  N.  Y.  146)     331, 

332,  310 
Mendenhall  v.  Benbow  (84  N.  C.  646)  360 
Meneely  v.  Meneely  (62  N.  Y.  427)  242 
Menkins  v.  Lightner  ( 18  111.  282)  27 

Mercantile  Bank  v.  Cox  (38  Me.  500)  75. 

104 
Merchants'  Bank  v.  Rudolf  (5  Neb. 

527)  118> 

Merchants'  &  Manufacturers'  Bank  v. 

Stone  (38  Mich.  779)  5(! 

Mercein  v.  Andrus  (10  Wend.  261)  173 
Mercer  v.  Saver  (Anth.  N.  P.  162)  163 
Meredith  v.  Ewing  (85  Ind.  410)  217,  24^ 
Merrick  v.  Brainard  (38  Barb.  574)       39] 

V.  Gordon  (20  N.  Y.  93)  65 

Merrill,  In  re  (13  N.  B  R.  91)  538 

MeMt  V.  Pollys  (16  B.  Mon.  355)  160,  406, 

407,  412 
Merritt  v.  Day  (38  N.  J.  32)  160,  162 
V.  Dickey  (38  Mich.  41)  363 


TABLE   OF   CASES. 


Iv 


Merritt  v.  Walsh  (32  N.  Y.  685)  60 

V.  Williams  (17  Kas.  2^1)  408 

Merrivveather  v.  llarduman  (51  Tex. 

486)  248,  512 

Merry  ».  Hoopes  (HI    N.  Y.  415,  18 

N.  E.  714)  237,244 

Merry  weather  v.  Nixon  (8  T.  R.  186;  254, 

267,  269 
Mersereau  v.  Norton  (15  Johns.  179)  304 
Mershon  v.  Hobensack  (2  Zab.  372)  108, 107 
Messer  n.  Messer  (50  N.  11.  375)  352,  366 
Metcalfy.  Bruin  (12  East400,  2  Camp. 
422)  316 

V.  Fouts  (27  111.  110)  37'.) 

u  Officer  (2  F.  R.  640)  32,  68 

y.  Heiimon  (43  111.  264)  10 

V.  Royal  Exch.  Ass.  Co.  (Barn. 

343)  132,  302,  557 

Metcalfe  v.  Rycroft  (6  M.  &  G.  75)      149, 

155,  316 
Metropolitan  S  Q.  Co.  v.  Hawkins  (4 

H.  &N.  87)  322 

Metropolitan  Nat.  Bank  v.  Sirret  (97 

N.  Y.  320)  537 

Meux  V.  Humphrey  (8  T.  R.  25)  145,  183 
Meyberff  y  Steagall  (51  Tex.  351)  344 
Meyer  v.  Atkms  (29  La.  Ann.  586)       168 

V.  Krohn  (114  111.  574,2  N.   E. 

495)  28,  128,  404 

V.  Larkin  (3  Cal.  403)  88 

V.  Sharpe  (5  Taunt.  74)  55 

IMilbank  v.  Revett  (2  Mer.  405)     294,  295 

Milburn  v.  Codd  (7  B.  &  C.  419)  248,219, 

253,  2(57,  553 

V. (1  M.  &  R.  238)  553 

Michael  u.  Workman  (5  W.  Va  391)  110 
IMickle  0.  Peet  (43  Coini.  65)  248 

Mifflin  V.  Smith  (17  S.  &  \l.  165)      37,  38, 
74,88,  111,  114,212.443 
Miles  V.  Thomas  (9  Sim.  606)  194,388,510 

V.  Wann  (27  Mmn.  56)  49 

Millar  r.  Craig  (6  Beav.  433)  515,  520 
Millard  o.  Hewlett  (19  Wend.  301)  19 
Miller  r.  Andres  (13  Ga.  366)         271,  508 

V-  Bailey  (19  Ore.  539,  25  Pac.27)  254 

V.  Bartlet  (15  S.  &  II.  137)  60 

V.  Chambers  (73  la.  236,  34  N.  W. 

830)  393 

V.  Chandler  (29  La    Ann.  88)  60 

V.  Consolidation  Bank   (48  Pa. 

514)  182 

V.  Estill  (5  Oh.  St.  508)  231,  327,  328, 

335,  338 

V.  Fenton  (11  Paige  18)  269 

V.  Harris  (9  Baxt.  101)  306 

V.  Hines  (15  Ga.  197)    82,  97,  99,  171 

V.  Hughes  (1  A.  K.  Marsh.  181)      58 

r.  Jones  (39  111   54)  293,  434 

V.  Maince  (6  Hill  114)      75,  143,  170 

V.  Marx  (65  Tex.  131 )     23,  24,  25, 44 

V.  Miller  (8  W.  Va.  542)  95 

0.  Morrice  (6  Hill  114)  88 

V.  Neimerick  (19  111.  172)  162 

V.  Price  (20  Wis.  117)  222 

V.  Sims  (2  Hill  S.  C.  479)  20 


Miller  v.  Thompson  (3  M.  &  G.  576) 
V.  Thorn  (R.  M.  Charlt.  180) 


169 
307, 
309 
515 
435 
94 
615 
380 


V.  Wornack  (Freem.  Cli.  486) 

Miller's  Appeal  (7  Atl.  190) 
Millerd  v.  Thorn  (56  N.  Y.  402) 
MiUiken  v.  Gardner  (37  Pa.  456) 

i:  Loring  (37  Me.  408) 

Mills  r.  Argall  (6  Paige  577)  136,  540 

V.  Barber  (4  Day  428)   131,  134,  139, 

150 

V.  Boyd  (6  Jur  943)  484 

V.  Fellows  (30  La.  Ann.  824)        303 

v.  Hanson  (8  Ves.  08)  517 

V.  Hurd  (29  F.  R.  410)  559,  560 

V.  Osborne  (7  Sim.  37)  219 

V.  Thomas  (9  Sim.  609)  285,  286 

Milmo  Nat.  Bank  v.  Carter  (20  S.  W. . 

836)  30 

Milne  v.  Bartlet  (3  Jur.  358)  390,  461 

V.  Moreton  (0  Binn.  353)  468 

Milnes  v.  Cowley  (8  Price  620)  512 

.Milton  V.  Mosher  (7  Met.  244)        133,  153 
Miner  r.  Downer  (19  Vt.  14)  106 

V.  Pierce  (38  Vt.  610)  97 

Minnit  v.  Whinnery    (5   Bro.    P.    C. 

489)  79,  383,  406 

Minor  v.  Gaw  (11  Sm.  &  M.  322)  98,  178, 

179 
Miser  v.  Trovinger  (7  Oh.  St.  281)  165 
Missouri  Pac.  Ry.  v.  Johnson  (7  S.  W. 

838)  60 

Mitchell,  Ex  parte  (14  Ves.  597)  146 

v.  Cockburne  (2  H.  Bl.  379)  9 

V.  Dall  (2  H.  &  G.  159,  4  G.  &  J. 

361)  32,273,410,420 

/•.  Harris  (2  Ves.  Jr.  134)  220 

I'.  Ostrom  (2  Hill  520)  381 

V.  Read  (61  N.  Y.  123,  84  N.  Y. 

556)  196,  204 

>'.   Reynolds    (Fort.   296,   1    P. 

Wms.  181)  401 

V.  Roulstone  (2  Hall  351)  69 

r.  Tarbutt  (5  T.  R.  649)  124, 125,  126 

('.  William  (4  Hill  13)  124 

Mitchum  v.   Bank  of  Ky.   (9   Dana 

166)  406 

Mix  V.  Shattnck  (50  Vt.  421)  160 

Moale  V.  HoUins  (11  G.  &  J.  11)  76 

Mobile,  Bank  of,  o.  Andrews  (2  Sneed 

535)  433 

Moddewell  v.  Keever  (8  W.  &  S  63)     10, 
127,  128,  138,  555 
Mode  V.  Penland  (93  N.  C.  292)  120 

Moderwell  v.  MuUison  (21  Pa.  257)  309 
Modisett  v.  Liiidley  (2  Blackf.  120)  151 
Moffat  V.  McKissick  (8  Baxt  517)         111 

p.  Moffat  (10  Bosw.  468)  77,  506 

V.  Van  xMillenger  (2  B.  &  P.  124)  270, 

307 
Moffitt  V.  Roche  (92  Ind.  96)  78,  168 

Mogul  S.  S.  Co.  V.  McGregor,  (1892, 

A.  C.  25)  500,  566 

Mohawk  &  Hudson  R.  R.  v.  Niles  (3 
Hill  162)  66 


Ivi 


TABLE   OF   CASES. 


17 
477 


55:^ 
4!  (3 
273 


Moley  V.  Brine  (120  Mass.  324) 
Moline  Co.  v.  Webster  (26  111  233) 
Moline  Wagon  Co.   v.  Rumniell   (12 

F.  K.  658,  14  F.  R.  155)  97,  404 

Moller  V.  Lambert  (2  Camp.  548)  316 

Mollwo  V.  Court  of  Wards  (L.   R    4 

P.  C.  419)  42,  43 

Molony  v.  Davis  (48  Pa.  512)  251 

Moneypenny  c.  Hartland  (1  C.  &  P 

352,  2  C.  &  P.  378) 
Monkiiouse  v.  Hay  (2  Br.  &  B.  114) 
Monroe  v.  Ezzell  (11  Ala.  603) 

V.  Conner  (15  Me.  178)  80,  371 

Mont  c.  Mainwaring  (8  Taunt.  139)      69 
Montague  v.  Hayes  (10  Gray  G09)         527 

f.  ^mitli  (13  Mass.  405)  316 

Montgomery,  Ex  jKirle  (1  ulyn  &  J. 

341)  503,  531 

f.  Boone  (2  B  Mon.  244)       150,  154 

Montgomery  &  E.  Rv.  v.  Culver  (75 

Ala.  587) 
Montjoys  v.  Holden  (Litt.  447) 
Montreal,  Bank  of,  v.  Page  (98  111. 

109)  168, 

Montz   V.  Morris  (89  Pa.  392) 
Moody  V.  Downs  (63  N.  H.  50)      475,  476 

V.  Lucier  (62  N.  H.  584)  836 

V.  Payne  (2  Johns.  Ch.  548)  290,  325, 

338,  344,  391,  475 

V.  Rathburn  (7  Minn.  89)  5 

Mooers  v.  White  (6  Johns.  Ch.  360)     512 
Moon  (•.  Story  (8  Dana  2:33) 
Moore,  Ex  parte  (  2  Glyn  &  J.  166) 

V.  Bare  (11  la.  198) 

V.  Brink  (6  Th.  &  C.  227) 

V.  Davis  (11  Cli.  D.  261) 

V.  Gano  (12  Ohio  300) 

n.  Hill  (2  Peake  10) 

V.  Huntington  (17  Wall.  417) 

;•   Knight  (1891,  1  Ch.  547) 

r.  Sample  (3  Ala.  319) 

V.  Smith  (19  Ala.  774) 

r.  Stevens  (60  Miss.  809) 

Moore's  Appeal  (19  Atl.  753) 
Moorehead  v   Gilmore  (77  Pa.  118)       168 
Moran  v.  Palmer  (13  Mich.  367)  350 

Moravia  v.  Levy  (2T.  R.  483)  260,  262,  519 
Moreau  v.  Saffarans  (3  Sneed  600)  352, 354 


65 
304 


374 
347 


439 

473 

138 

550 

59 

247 

312 

524 

121 

291,  344 

45,  60 

150,  151 

195,  523 


Moredon  v.  Wyer  (6  M.  &  G.  278) 
Morehead  v.  Adams  (18  Neb.  569,  26 
N.  W.  242) 

V.  Wriston  (73  N.  C.  398) 

Moreton  v.  Hardren  (4  B.  &  C.  223) 


145 

332 
429 
124, 
126 
293 
146 


Morey  v.  Grant  (48  Mich.  326) 
Morgan.  Ex  jmrte  (Buck  109) 

v.  His  Creditors  (20  Mart.  599)    330, 

444 

V.  Pierce  (59  Miss.  210)  84 

V.  Richardson  (16  Mo.  409)  155 

V.  Schuyler  (79  N.  Y.  490)  243 

V.  Skidmore  (55  Barb.  263)  476 

r.  Stearns  (41  Vt.  397)  57 

Morganthau  v.  King  (15  Col.  413,  24 
Pac.  1048)  347 


Morin  v.  Martin  (25  Mo.  360)        249,  268 
Morisset  v.  King  (2  Burr.  891)  62 

Montz  V.  Peebles  (4  E.  D.  Smith  135)  217, 

279 
Morley,  Ex  parte  (L.  R.  8  Ch.  1026)     442 

V.  Gaisford  (2  H   Bl  442)  126 

Moms  V.  Allen  (1  McCart  44)     195,  203, 

527 

V.  Barrett  (3  Y.  &  J.  384)      350,  353, 

354 

216,  279 

202 

157)       449 

450,  518 


Colman  (18  Ves.  437) 
Griffin  (49  N.  W.  846) 
Harrison  (Colles  P.  C. 


V.  Hillery  (7  How.  Miss.  61)  309 

V.  Jones  (4  Harr.  428)  150 

V.  Kearsley  (2  Y.  &  C.  1B9)    362,  364 

V.  Peckham  (51  Conn.  128)       7,  279 

Morris  Run  Coal  Co.  v.  Barclay  Coal 

Co.  (68  Pa.  173)  9,  566 

Morrison  v.  Atwell  (9  Bosw.  503)  139 

V.  Blodgett  (8  N.  H.  231)       137,  291, 

325,  337,  338,  342,  343,  345 

V.  Cole  (30  Mich.  102)  57 

V.  Kentz  (15  111.  193)  331 

V.  Stockwell  (9  Dana  172)  255 

Morrow  v.  Riley  (15  Ala.  710)        263,  508 

V.  Saunders  (1  Br.  &  B.  318)  211 

Morse  c.  Bellows  (7  N.  H.  567)  152,  382 
V.  Hagenah  (68  Wis.  603,  32  N. 

W.  6-34)  168 

V.  Wilson  (4  T.  R.  35.3)  62 

Morss  V.  Gleason  (64  N.  Y.  204)  333 

Mortley  v.  Flanagan  (.38  Oh.  St.  401)  335 
Morton  v.  Croghan  (20  Johns.  123)  22 

I'.  Webb  (7  Vt.  123)  273 

Moser  v.  Libenguth  ( 1  Rawle  255)  94 

Moses  r.  Hatfield  (27  S.  C  324,  3  S. 

E.  538)  131 

Moss  V.  Jerome  (10  Bosw.  220)  77 

V.  McCall  (75  111   190)  203,  212 

V.  McCullough  (5  Hill  1-35)  76 

Motley  V.  Dounman  (3  My.  &  C  1)  322 
V.  Frank  (87  Va.  432,  13  S.  E. 

26)  115 

V.  Jones  (3  Ired.  Eq.  144)  60 

Motteux  V.  St.  Aubin  (2  W.  Bl.  11-33)  155 
Moule,  Ex  parte  (14  Ves.  602)  21 

r.  HoUins  (11  G.  &  J.  11)  91 

Moult,  Ex  parte  (1   Deac.  &  Ch.  44, 

2  id.  419,  1  Mont.  292)        444,  487,  495, 

496 
Mounstephen  v.  Brooke  (1  Chitty  391)  142 
Mo  watt  V.  Howland  (3  Day  353)  406 

Mover  v.  Drummond  (32  S.  C.  165, 

lb  S.  E.  952)  351 

Mudd  V.  Bast  (34  Mo.  465)  32 

Mulford  V.  Griffin  (1  F.  &  F.  145)  407 

MulhoUan  v.  Eaton  (11  La.  291)  516 

Mullany  v.  Keenan  (10  la.  224)  271 

MuUett  V.  Hook  (1  M.  &  M.  88)  272 

Mumford  v.  McKay  (8  Wend.  440)        376 

r.  Murrav  (1  Paige  620)  479 

V.  Ni<'oir(20  Johns.  611)      37,  66,  81 

Munroe  v.  Cooper  (5  Pick.  412)  180 


TABLE   OF   CASES. 


Ivii 


Munroe  v.  Ezzel  (11  Ala.  603)  317 

Munsey  v.  Butterficld  (133  Mass.  492)  238 
Munson  v.  Wickvvire  (21  Conn.  513)  165 
Munzesheimer  v.  fleinze  (74  Tex.  254, 

11  S.  VV.  1094)  150 
Murpliy,  In  re  (1  Sch.  &  L.  44)  467 
Murray,  In  re  (13  K.  R.  550)  104 
r.  Ayer  (16  U.  I.  6(35,  19  Atl. 

241)  168 

V.  Bogert  (14  Johns  318)       10,  127. 

248,  260,  269,  555 

V.  Col.  Ins.  Co.  (11  Johns.  302)     319 

V.  .Mumtbrd  (6  Cow.  441 )  304,  443, 447 

V.  Murray  (5  Jolins.  Ch.  60)   137,  325, 

329,  330, 466,  469,  478,  500 

V.  Richards  (1  Wend.  58)  12 

V.  Soiuerville  (2  Camp.  99)  88 

V.  Stevens  (1  Rich.  Cas.  205)  53 

V.  Toland  (3  Johns.  Ch.  569)  518 

Murrell  v.   Mandlebauni    (19    S.    W. 

880)  350 

Murrill  v.  Neill  (8  How.  414)  331,  479 

Murry  v.  Murry  (5  Johns.  Ch.  60)  436 
Muse  V.  Donelson  (2  Hiunpli.  166)  160 
Musgrave  v.  Drake  (5  Q.  B.  185)  99,  180 
Musier  v.  Trumpour  (5  Wend.  274)       53, 

265 
Musselman's  Appeal  (62  Pa.  81)  236,  238 
Musser  v.  Brink  (68  Mo.  242,  80  Mo. 

350)  53 

Musson  r.  May  (3  Ves.  &  B.  194)  447 

Mutual  Benefit  Ins.  Co.  v.  Hildyard 

(37  N.  J.  L  444)  26 

Mutual  Institution  v.  Euslen  (37  Mo. 

453)  378 

Mut.  Nat.  Bank  v.  Richardson  (33  La. 

Ann.  1312)  98 

Muzzy  V.  Wiiitney  (10  Johns.  226)  60 

Myatts  V.  Bell  (41  Ala.  222)  95, 160 

Mycock  V.  Beatson  (13  Ch.  D.  384)      305, 

529 
Myers  v.  Buggy  Co.  (54  Mich.  215,  19 

N.  W.  961)  238 

V.  Edge  (7  T.  R.  254)  314,  315 

V.  Huggins  (1  Strobh.  473)  379 

r.  Smith  (14  la.  181)  385 

V. (29  Oil.  St.  120)  336.  345 

V.  Standart  (11  Oh.  St.  29)    162,  163, 

380 

V.  Winn  (16  IIL  135)  253 

Myrick  v.  Dame  (9  Cush.  248)  246 


N. 


Nadnay  ;'.  Harvey  (9  Gratt.  466)  94 

Nail  V.  Mclntyre  (31  Ala.  532)        97,  274 
Napier  v.  Catron  (2  Humph.  534)         150, 

151,508 

i:  McLeod  (9  Wend.  120)       152,  383 

Nason,  Ex  parte  (70  Me.  363)         182,  487 
National   Exchange  Co.  v.  Drew  (2 

Macq.  103)  116, 124 

Natusch  V.  Irving  (Gow  Part.  398)      166, 

191,  212,  285 


Nay  lor.  In  re  (2  Deac.  &  Ch.  186)         473 

i;.  Sidener  (106  Ind.  179)  293 

Neale  v.  Turton  (4  Bmg.  149)  246,  255,  553 
Near  v.  Lowe  (49  Mich.  482, 13  N.  W. 

825)  306 

Nedliam's  Case  (8  Co.  136)  143 

Nehrboss  v.  Bliss  (88  N.  Y.  600)  333,  434, 

437 
Neil  v.  Greenleaf  (20  Oh.  St.  567)  254,  255 
Neilson  v.  Moesend  Iron  Co.  (11  App. 

Cas.  298) 
Nelms  V.  McGraw  (93  Ala.  245,  9  So. 

719) 
Nelson,  Ex  parte  (1  Cow.  424) 

V.  Hill  (5  How.  127) 

V.  Lloyd  (9  Watts  22) 

V.  Tenney  (36  Hun  327) 

Nerot  V.  Burnand  (2  Russ.  56) 

V. (4  Russ.  247) 

Ness  1-.  Antjas  (3  Ex.  805) 

Newall  V.  Bartlett  (114  N.  Y.  399,  21 

N.  E.  990) 

V.  Hussev  (18  Me.  249) 

Newbiggin  v.  Pillans  (2  Bay  462) 
Newhigging   v.   Adam    (34   Ch.   D. 

582) 
Newbrau  v.  Snider  (1  W.  Va.  153) 
Newburg   Petroleum   Co.   v.    Weare 

(27  Oh.  St.  343) 
Newhurgh,  Bank  of,  i-.  Bigler  (83  N. 

Y.  51) 
Newby  v.  Harrell  (99  N.  C.  149,  5  S. 

E.  284) 
Newell  V.  Cochran  (41  Minn.  374,  43 

N.  W.  84)  7,  196 

V.  Humphrey  (37  Vt.  265)    439,  447 

v.  Townsend  (6  Sim.  419)  290 

Newliall  V.  Buckingham  (14  111.  405)    344 
New  Hampshire  Ins.  Co.  v.  No  ves  (32 

N.  H.  345)  ■  20 

Newland  v.  Tate  (3  Ired.  Eq.  226)  129, 200, 

384 
Newman  v.  Bagley  (16  Pick.  570)         446 

V.  Baker  (9  Johns.  207)  81 

V.  Bean  (21  N.  H.  93)       60,  325,  338 

V.  McComas  (43  Md.  70)  160 

V.  Milner  (2  Ves.  483)  288 

V.  Morris  (52  Miss.  402)  24 

V.  Payne  (2  Ves.  Jr.  199)  516 

V.  Richardson  (9  F.  R.  865)  99 

Newmarch  v.  Clay  (14  East  239)  421,424, 

425 
Newmarket  Nat.  Bank  v.  Locke  (89 

Ind.  428)  476 

New  Orleans  v.  Gauthreaux  (32  La. 

Ann.  1126)  46 

New  Orleans,  Bank  of,  v.  Matthews 

(49N.  Y.  12)  403 

Newsome  v.  Coles  (2  Camp.  617)  108,  403, 

412 
Newton  v.  Belcher  (12  Q.  B.  921)  427 
New  Vienna  Bank  v.  Johnson  (47  Oh. 

St.  306,  24  N.  E.  503)  351 

New  York,  Bank  of,  v.  Vanderhorst 

(32  N.  Y.  553)  432 


213 


57 

22 

445 

69 

136 

504 

389 

25,  130 


118 

483 

23 

305 

222 

50 
451 
304 


Iviii 


TABLE    OF   CASES. 


Kew  York  Ins.  Co.  v.  Bennett  (5  Conn. 

674)  87,  180,  184, 

(.'.  Statliam  (93  U.  S.  24) 

Nicliol  V.  Stewart  (oG  Ark.  urj)  97, 
Kicliolaus  V.  Thielges  (50  Wis.  491,  7 

N.  VV.  341) 
NiclioUs  V.  Dowding  (1  Stark.  81) 

163, 
Nichols  V.  Anguera  (2  Mills  290) 

V.  Cheairs  (4  Sneed  229)      75,  76, 

96, 

V.  Hughes  (2  Bail.  109) 

V.  Sober  (38  Mich.  678) 

17.  White  (85  N.  Y.  531) 

Nicholson  v.  Janevvay  (1  Green  285) 

r.  Moog  (G5  Ala.  471)  404, 

r.  Kicketts  (2  E.  &  E.  497) 

NicoU  i:  Glennie  (1  M.  &  S.  588) 

V.  Mumt'ord  (4  Jolms.  Ch.  522) 

66,  128,  137,  138, 
Niehoff  V.  Dudley  (40  111.  406) 
Niemann  v.  Niemann  (43  Ch.  D.  198) 

Nightingale  ?'.  Scanimell  (6  Cal.  506) 
Niras,  In  re  (16  Blatch.439)  113, 

V.  Bigelow  (44  N.  H  376) 

Nirdlinger  v.  Bernheimer  (133  N.  Y. 

45,  30  N.  E.  561)  33, 128, 

Nisbet  V.  Nasli  (52  Cal.  540)  34, 

1-.  Patton  (4  Kawle  120) 

Niven  v.  Spickerman  (12  Johns.  401) 

258, 
Nixon  V.  Nash  (12  Oh.  St.  647)  344, 
Noble  V.  McClintock  (2  W.  &  S.  152) 

Nobles  V.  Eatea  (7  Cow.  307) 
Nockels  V.  Crosby  (3  B.  &C.  814,  5  D. 

&  R.  751 )  252,  456, 

Noel  V.  Bowman  (2  Litt.  46) 
'Nokes,  Ex  parte  (1  Mont.  Part.  114) 

I'.  Leppings  (2  Phil.  19) 

Nolte,  Ex  parte  (2  Glyn  &  J.  295)  185, 
Noonan  v.  McNabb  (30  Wis.  277) 
V.  Nunan    (76   Cal.  44,  18    Pac. 

98)  10,  128,  343, 

Norfolk,  Ex  parte  (19  Ves.  458)  271, 
Norman  y.  Huddleston  (64  111.  11)  136, 
Norment  v.  Hull  (1  Humph.  320) 

r.  Johnson  (10  Ired.  89) 

Norris  v.  Vernon  ( 19  Md.  13) 
North  V.  Bloss  (30  N.  Y.  374) 
North  British  Bank  v  Colhns  (28  Eng. 

L.  &  Eq.  7)  206. 

Northern    Bank  of  Ky.  v.  Keizer  (2 

Duv.  169) 
Northern  Co.  v.  Potter  (63  Cal.  157) 
North    Penn.  Coal   Co.'s  Appeal  (45 

Pa.  181) 
North  River  Bank  v.  Aymar  (3  Hill 

262) 

V.  Stewart  (4  Bradf.  254) 

Northrup  v.  Phillips  (99  111.  449)  9, 
Northwestern  R.  R.  v.    McMichael 

(5  Ex.  114) 


185 

26 

231 

60 

164 

76 
,95, 
206 
147 

99 
163 
193, 
336 
407 
468 
124 

10, 
555 

58 
139, 
144 
320 
,488 
260 

506 
508 
124 
257, 
267 
476 
99, 
173 
401 

462 
251 
392 
516 
482 
213 

344 
498 
509 

60 
179 
138 

32 

216 

477 
144 

350 

180 
331 
198 

20 


563 
111, 
183 
110 

,366 
295, 
456 

412 

257, 
258 
406 
515 

222, 
525 
164 
54 
469 

454, 
507 
150 


Norton  v.  Phelps  (54  Miss.  467) 
V.  Seymour  (3  C.  B.  792)   110, 

r.  Thatcher  (8  Neb.  186)  77, 

Norwalk  Nat.  Bank  t'.  Sawyer  (38  Oh. 

St.  339)  351 

Norway  v.  Rowe  (19  Ves.  144)     292, 

298,  455, 

Norwich  Nav.  Co.  v.  Theobold  (M.  & 

M. 151) 
Notley,  Ex  parte  (1  Mont.  &  A.  46) 

Nott  V.  Downing  (6  La.  G84)  165, 

Nourse  v.  Prime  (7  Johns.  Ch.  69) 
Nowell  V.  Nowell  (L.  R.  7  Eq.  538) 

623^ 
Noyes  v.  Brumaux  (3  Yeates  30) 

V.  Cushman  (25  Vt.  390) 

V.  Sawyer  (3  Vt.  160) 

Nugent  V.  Locke  (4  Cal.  318)        250, 

Nunnely  v.  Dolierty  (1  Yerg.  26) 
Nutting,  Ex  parte  (2  Mont.  D.  &  D 

302)  496 
V.  Colt  (3  Halst.  539)  60 


o. 


Oakeley  v.  Pasheller  (10  Bligh.  548, 

4  CI.  &  F  207)  95,  417,  485 

Oakley  v.  Aspinwall  (2  Sandf.  7)  74 

O'Bannon  v.  Miller  (4  Bush  25)  344 

O'Brien  v.  Currie  (3  C.  &  P.  283)  21 

V.  Eoglesong  (31  Pac   1047)  333 

V.  Smith    (42   Kas    49,  21   Pac. 

784)  248 
O'Connor  v.  Stark  (2  Cal.  155)  510 
Odiorne  r  Lyford  (9  N.  H.  511)  303 
V  Maxcy  (13  Mass.  182, 15  Mass. 

44)  164 

Ogden  V  Astor  (4  Sandf.  311)  55,  60,  430, 

438,  443,  512,  515 

V.  Kip  (6  Johns.  Ch.  160)  291 

I'.  Saunders  (12  Wheat.  213)  468 

Os:i\hy,Ex  parteiSVes  &B.133)  471,499 
Ogilvy,  Ex  parte  (2  Rose  177)  472,  499 
Ogle,  Ex  parte  (Mont.  350)  497,  499 

V.  Barnes  (8  T.  H.  188)  126 

Ohio  Salt  Co.  v.  Guthrie  (35  Oh.  St. 

666)  566 

Olcott  V.  Wing  (4  McLean  15)  35 

Oldaker  v.  Lavender  (6  Sim  239)  216, 
277,  455,  511,  519 
Oliphant  v.  Mathews  (16  Barb  608)  114 
Oliver  V.  Hamilton  (2  Anst.  453)  293,  297, 

298,  457 

V.  Burton  (17  Q  B.  989)  317 

V.  Forrester  (96  111.  315)  435 

V.  Gray  (4  Ark.  425)  48 

V.  Palmer  (11  G.  &  J  426)  469 

Olmstead  r   Hill  (2  Ark.  346)  60 

O'Mealey  v  Wilson  (1  Camp.  482)        26, 

309,  310 
O'Neill  V.  Brown  (61  Tex.  34)  248 


TABLE    OF   CASES. 


lix 


Onondaga  Bank  v  De  Puy  (17  Wend. 

47)  143 

Ontario  Bank  v.  Hennessey  (48  N.  Y. 

64o)  114 

r  Mumford  (2  Barb.  Ch.  596)       312 

Oppenlieimer  v.  Clenimons  (18  F.  R. 

880)  62, 69 

Oram  v.  Rothermel  (08  Pa.  300)  363 

Ord  V.  Portal  (3  Camp.  2!)3)  316 

Ordinary  v.  Wherry  (1  Bail.  28)  19 

Oregon  Steam  Nav.  Co.  v.  Winsor  (20 

Wall.  64)  566 

Orplnm    Board    v.    Van    Keenen    (I 

KiKipp  100)  514 

Orr  V.  Cliurcliill  (1  H.  Bl.  227)  223 

Orvis  V.  Kimball  (3  N    H.  314)  18 

Oiborn  v.  McBride  ( 16  N.  B.  R.  22)     340, 

344 

V.  U.  S.  Bank  (9  Wheat.  788)         69 

Osborne  r.  Barge  (29  F.  R.  725)     134,  135 

V.  Brennan  (2  N  &  McC.  427)  54 

V.  Harper  (5  East  225)  253 

V.  Stone  (30  Minn.  25,  13  N.  W. 

922)  83 
r.  Thompson  (35  Minn.  229,  28 

N.  W.  -M))  83 

Osgood  V.  Glover  (7  Daly  367)  146 

V.  Spenser  (2  H.  &  G.  133)  444 

Osmond  y.  Fitzroy  (3  P.  Wms.  130)  512 
Ostrom  V.  Jacobs  (9  Met.  454)  69,  89 

Oteri  r.  Scalzo  (145  U.  S.  578)      305,  454, 

457 
Ottley  V.  Browne  (1  Ball  &  B.  360)  9 

Over  V.  Heatherington  (66  Ind.  365)  136 
Overall  r.  Taylor  (11  So.  738)  118 

Overholt's  Appeal  (12  Pa.  222)  345,349 
Overton  ?;.  Tozer  (7  Watts  333)    151,  155, 

156 
Owen,  Ex  parte  (13  Q.  B.  D.  113)         293 

V.  Body  (5  A.  &  E.  28)        56,  65,  452 

V.  Bowen  (4  C.  &  P.  93)  482 

V.  Van  Uster  (10  C.  B.  319)  183 

Owens  v.  Collins  (23  Ala.  837)       349,  353 

V.  Mackall  (33  Md.  382)  65 

Owings  V.  Low  (5  G.  &  J.  134)  163 

Owston  V.  Ogle  (13  East  538)  207,  267 
Oxley,  Er  parte  ( 1  Ball  &  B.  257)  467 
Ozeas  i".  Johnson  (1  Binn.  191,  4  Dall. 

434)  260,  262,  519 


Paden  v.  Bellenger  (87  Ala.  575,6  So. 

351)  125 

Page  V.  Brant  (18  111.  37)  272,  413 

V.  Carpenter  (10  N.  II.  77)     338,  343 

V.  Cox  (10  Hare  163)  127 

V.  Fry  (2  B  &  P.  240)  319 

V.  McCrea  (1  Wend.  167)  384 

V.  Morse  (128  Mass.  99)  17 

V.  Thomas  (43  Oh.  St.  38, 1  N.  E. 

79)  352,  366 

r.  Thompson  (33  Ind.  137)  249 

c.  Wolcott  (15  Gray  536)  333 


450) 
Palmer  v.  Dodge  (4  Oh.  St.  21) 


Pahlman  v.  Graves  (26  111.  405)  477 

Paige  V.  Paige  (71  la.  318,  32  N.  W. 

360)  4,  352,  362,  366 

Paine  v.  Thacher  (25  Wend.  450)       200, 

258,  384 
Painter  v.  Painter  (68  Cal.  395,  9  Pac. 

138 

168,  378, 

381 

75 

&B. 

151 
132,  135 
103 
168 
111,113 
508 


V.  Elliott  (1  Cliff.  63) 

V.  Justice  Assur.  Co.  (6  E 

1015) 

o.  Myers  (43  Barb.  509) 

V.  Pinkbam  (33  Me.  32) 

V.  Scott  (68  Ala.  380) 

V.  Stephens  (1  Den.  471) 

V.  Tyler  (15  Minn.  106) 

Paradise  v.  Gerson  (32  La.  Ann.  532)  427 
Parchen  v.  Anderson  (5  Mont.  438,  5 

Pac.  588)  46,  104 

Park  V.  Ballentine  (6  Blackf.  223)        469 

V.  Wooten  (35  Ala.  242)  402 

Parkburst  v.  Kinsman  (1  Blatch.  488)    67, 

244,  391 

V.  Muir  (3  Halst.  Ch.  .307)  295 

Parker,  Ex  parte  (Cooke  B.  L.  503)    497 

,  In  )e  (19  N.  B.  R.  340)  95 

V.  Barker  (1  Br.  &  B.  9,  3  Moo. 

226)  492 

I'. (1  Clarke  Ch.  1.36)  20 

V.  Brewer  (3  J.  B.  Moore  226)        69 

V.  Broadbent   (134   Pa.   322,   19 

Atl.  631) 
V.  Canfield  (37  Conn.  250) 


i:  Cousins  (2  Gratt.  372) 


439 

55,  57, 

61,  95 

96,  378. 

.381 

V.  Fergus  (43  111.  437)  57,  62 

V.  Gossage  (2  C.  M.  &  R.  617)       219 

V.  Gregg  (23  N.  H.  416)  312 

?'.  Jonte'  (15  La.  Ann.  290)  515 

V.  Macomber  (18  Pick.  505)  247,  308, 

378,  379,  381 

v.  Merrill  (6  Me.  41)  162 

(;.  Merritt  (105  111.  293)  332 

V.  Moore  (2  La.  Ann.  1017)  160 

V.  Morrell  (2  C.  &  K.  599)      162,  163 

r. (2  Ph.  453)  163 

V.  Muggridge  (2  Story  346)  471,  479, 

500 

V.  Piiillips  (2  Cush.  175)        380,  383 

V.  Pistor  (3  B.  &  P.  288)      250,  290, 

.324,  475 

V.  Ramsbottom  (3  B.  &  C.  257)     62, 

473,  489 

V.  Wright  (66  Me.  392)  345 

Parkin  v.  Carruthers  (3  Esp.  248)   88,  403 

406,  407 

V.  Fry  (2  C.  &  P.  311)  553 

Parmalee  v.  Wiggenhorn  (6  Neb.  322)  427, 

429 
Parmelee  v.  Lawrence  (44  III.  405)  144 
Parnell  v.  Robinson  (53  Ga.  26)  197,  524 
Parr,  Ex  parte  (18  Ves.  65,  1  Rose  76)  480, 

485 


Ix 


TABLE   OF    CASES. 


Parrish  v.  Parrish  (88   Va.   529,   14 

S.  E.  325)  363 

Parsons  v.  Crosby  (5  Esp.  199)  30,  77, 109, 

492 

V.  Haywood  (31  Beav.  199) 

• '•.  Tillman  (95  Ind.  452) 

Partridge  v.  Kingman  (130  Mass.  476) 


213 
497 
60, 
104 
204 


V.  Wells  (30  N.  J.  Eq.  176) 

Paton  V.  Baker  (62  la.  704,  15  N.  W. 

586)  368 

Patten  v.  Garney  (17  Mass.  182)    116,  320 

I'.  Whitehead  (13  Rich.  L.  150)     113 

Patterson  v.  Blake  (12  Ind.  436)  349 

(;.  Brewster  (4  Edw.  Ch.  352)  35,  91, 

330,  331 

r.  Chalmers  (7  B.  Mon.  595)  li6 

V.  Grace  (10  Ala.  444)  349 

r.  Maughan  (39  U.  C.  Q.  B.371)  143 

V.  Silliman  (28  Pa  304)  219 

V.  Ware  (10  Ala.  444)  214 

Patterson's  Appeal  (13  W.  N.  C.  154)      9 
Pattison  v.  Blanchard  (5  N.  Y.  186)  45,  66 

V. (6  Barb.  537)  262 

Patton  V.  Leftwich  (86  Va.  421,   10 

S.  E.  686)  136 

Paul  V.  CuUura  (132  U.  S.  539)  222 

Pawsey  v.  Armstrong  (18  Ch.  D.  698)  42, 

237 
Payne  v.  Freer  (91  N.  Y.  43) 

V.  Hornby  (25  Beav.  280) 

V.  Ives  (3  I).  &  R.  664) 

V.  Matthews  (6  Paige  19) 


527 
378 
185 
330,  444, 
500 


V.  O'Shea  (84  Mo.  129)  347 

V.  State  (39  Barb.  634)  160 

V.  Thompson  (44  Oh.  St.  192,  5 

N.  E.  654)  24 

Peacock  v.  Cummings  (46  Pa.  4.34)       188 

V.  Peacock  (16  Ves.  49)  199,  291,  292. 

295,  302,  371,  378,  388,  392,  396, 
398 

V. (2  Camp.  45)     109,  232,  233, 

234 

Peake,  Ex  parte  (1  Madd.  358)     328,  338, 

468,  474,  478,  489,  490 

Pearce  v.  Chamberlin  (2  Ves.  33)  10,  129, 

432,  459 

V.  Cooke  (13  R.  I.  184)  445 

V.  Covert  (39  Wis.  252)  354 

V.  Hennessy  (10  R.  I.  223)  203 

0.  Kearney  (5  Hill  82)  92 

V.  Piper  (17  Ves.  1.)  553 

V.  Wilkins  (2  N.  Y.  469)  80 

Pearpoint  v.  Graham  (4  Wash.  C.  C. 

232)  131,  134,  371,  396 

Pearsall  v.  McCartney  (28  Ala.  110)     490 
Pearson  v.  Keedy  (6  B.  Mon.  128)     327, 

V.  Lord  (6  Mass.  81 )  318 

V.  Parker  (3  N.  H.  366)  312,  316 

V.  Pearson  (27  Ch.  D.  145)  237 

V.  Skelton  (1  M.  &  W.  504)  277 

r.  Williams  (26  Wend.  630)  224 

Pease  v.  Cole  (53  Conn.  53)  83,  84 


Pease  v.  Hewitt  (31  Beav.  22)  530 

V.  Hirst  (10  B.  &  C.   122)     158,  313, 

316 
Pechell  V.  Watson  (8  M.  &  W.  691)  320 
Peck  V.  Fisher  (7  Cush.  386)  350,  352,  361 

0.  Schultze  (1  Holmes  28)  344 

V.  Thomas  (29  Eng  L.  &  Eq.  276)    12 

Pecker  r.  Hall  (14  All.  532)  387 

Peckham  Iron  Co.  v.  Harper  (41  Oh. 

St.  100)  119,  125 

Pecks  V.  Ellis  (2  Johns.  Ch.  131)  269 

Pecot  V.  Armelin  (21  La.  Ann.  667)  6 

Peele,  Ex  parte  (Buck  457)  146 

, (6  Ves.  604)  175 

Peirce  v.  Jackson   (6  Mass.  242)  475 

V.  Tobey  (5  Met.  168)  160 

Pelletier  v.  Couture  (148  Mass.  269,  19 

N.  E.  400)  17,  21 

Pemberton  v.  Oakes  (4  Russ.  154)        425, 

448,  622 
Pendleton  v.  Cline  (85  Cal.  142,  24 

Pac.  659)  228 

Penn  v.  Harrison  (3  T.  R.  760)  186 

V.  Stone  (10  Ala.  209)  308,  341 

V.  Whitehead  (17  Gratt.  503)  22 

Pennell  v.  Deffell  (4  De  G  M.  &  G.  372)  425 
Penniman  v.  Jones  (58  N.  H.  447)         247 

;;.  Munson  (26  Vt.  164)  67,  244 

Pennoyer  v.  David  (8  Mich.  407)  162 

Penn.  Ins.  Co.  v.  Murphy  (5  Minn.  56)  552 
Penn.  Nat.  Bank  v.  Furness  (114  U.  S. 

376)  427 

Penny  v.  Black  (9  Bosw.  310)  235 

V.  Martin  (4  Johns.  Ch.  566)      76,  93 

Pennybacker  v.  Leary  (65  la.  220,  21 

N.  W.  575)  7,  350 

Pennypacker  v.  Umberger  (22  Pa.  492)  420 
People  V.  Chicago  Gas  Trust  (130  111. 

268,  22  N.  E.  798)  5.59,  567 
V.  North  River  S.  R.  Co.  (121  N. 

Y.  582,  24  N.  E.  834)  559,  661,  564 

V.  Norton  (1  Paige  17)  297 

V.  Wemple  (117  N.  Y.  136,  22  N. 

E.  1046)  131,  551 

Peoples'  Bank  v.  Keech  (26  Md.  521)    187 

V.  Shryock  (48  Md.  427)         344,  345 

Pepper  v.  Peck  (20  Atl.  16)  98,  331 
t;.  Thomas   (85  Ky.  539,  4  S.  W. 

297)  352 

PercifuU  v.  Piatt  (36  Ark.  456)  351,  363 
Perens  v.  Johnson  (3  Sm.  &  G.  419)    375, 

383,  392 
Perham  v.  Raynal  (2  Bing.  309)  156,  157 
Perkins  v.  Fisher  (80  Ky.  11)  470 

V.  Hart  (11  Wheat.  237)  515 

Perminter  v.  Kelly  (18  Ala.  716)  303 

Perrin  !'.  Keene  (19  Me.  355)  381 

Perrine  r.  Hankinson  (6  Halst.  181)  63 
Perring  v.  Hone  (4  Bing.  28)  111,  183,  248, 

653 

V. (2  C.  &  P.  401 )  474,  549 

Perrott  i'.  Bryant  (2  Y.  &  C.  61)  60 

Perry,  Ex  parte  (5  Ves.  575)  490 

V.  Butt  (14  Ga.  699)  46,  179 

V.  Jackson  (4  T.  R.  519)  162 


TABLE   OF   CASES. 


Ixi 


Perry  v.  Randolph  (6  Sm.  &  M  335)     77, 

107 

V.  Taylor  (1  Utah  63)  2U3 

Persou  V.  Carter  (3  Murph.  321)  160,  151, 

152 
]\'rsonette  c  Pryme  (34  N  J.  Eq.  26)  7 
Perth   Amhoy   Terra-Colta    Co.    v 

Wood  (124  Pa.  307,  17  Atl.  4  )  155 

Peter  /;.  Heverly  (10  Pet.  5G7)  483 

Peters  p.  Anderson  (5  Taunt.  596)         420 

V.  Main  (138  U.  8.  670)   475.  476,  480 

V.  Davis  (7  Mass.  256)  434,  443 

V.  Sandfurd  (1  Den.  224)  76,  92 

Peterson   v.   Humphrey    (4   Abb.  Pr. 

394)  242,  243 

/'.  lloach  (32  Oh.  St.  374)  89 

Petrie  p.  IJury  (3  B  &  C.  354)  316 

y.  Hannay  (3  T.  R.  418)  9 

r.  Lamont  (1  C.  &  M.  93)  118 

Petrikin  ik  Collier  (1  Barr  247)  37,  373 
Pettee  o.  Appleton  (114  Mass.  114)  55,  58 
Pettis  V.  Atkins  (60  111.  454)  65 

Pettit  LK  Shepherd  (5  Paige  493)  89 

Pettyjohn  v.  Woodroof  (86  Va.  478, 10 

S.  10.  715)  476 

Pettyt  o.  Janeson  (6  Madd.  146)   215,  282, 

518 
Peyser  v.  Myers  (135  N.  Y.  599,  32  N. 

E.  699)  429 

Pfeffer  v.  Steiner  (27  Mich.  537)  444 

Pfeuffer  v.  Maltby  (54  Tex.  454)  8 

Phelps  V  Brewer  (9  Cush.  390)  145 

V.  McNeely  (66  Mo.  654)  332 

Philippi  u.  Philippi  (61  Ala.  41)  306 

Philips  V.  Belden  (2  Kdw.  Ch.  1)  515 

(I   Samuel  (76  Mo.  657)  46,  58 

u.  Turner  (2  Dev.  &  B.  Eq   123)  200, 

201,  384,  520 
Phillips  V.  Ackerson  (2  Bro.  C.  C  272)  309, 

436 

V.  Blatchford  (137  Mass.  510)  66,  248, 

433,  550 

r   Clagett  (11  M.  &  W.  84)    152,  307 

V   Cook  (24  Wend.  398)  290,  340,  343 

r.  Pennywit  (1  Ark.  69)  318 

V.  Phillips  (1  M.  &  K.  649)     360,  354 

V. (Biss.  Part.  50)  364,  365 

V.  Purington  (15  Me.  425)  69 

i\  Trezevant  (67  N.  C.  370)  293 

t>.  Trowbridge  Furniture  Co.  (86 

Ga.  699,  13  S.  E.  19)  69,  134 

Philson   i\  Bampfield  (1  Brev.  202)  76 

Phinsen  v.  Negley  (25  Pa.  297)  171,  172 
Phoeni.x  c.  Ingraham  (5  Johns.  412)  490 
Piatt  V.  Oliver  (3  McLean  27)  214,  367 
Pickard  u.  Sears  (6  A.  &  E.  469)  492 

Pickels  V.  McPherson  (59  Miss  216)  84,  89 
Pickens  i\  McCoy  (24  W.  Va.  344)  203 
Pickering  r.  Holt  (6  Me.  160)  150 

V.  Pickering  (11  N.  H   141)  320 

V.  Rugbv  (18  Ves.  484)  283 

Pigott  V.  Bagley  (McC  &  Y.  569)         449, 

450,  610 
Pierce  v.  Barnham  (4  Met.  303)  23 
r.  Bryant  (5  All.  91)                639,  545 


Pierce  v.  Cameron  (7  Rich.  114)  94 

V.  Covert  (39  Wis  252)  361 

V.  Daniels  (24  Vt.  624)  193,  194 

V.  Fuller  (8  Mass  223)  401 

V.  Jackson  (21  Cal.  636)  172 

V, (6  Mass   242)  118,  137,  338, 

339,  346,  446 

V.  Kearney  (5  Hill  94)  76 

V.  McClellan  (93  111.  245)  306 

V.  Nashua  Ins  Co.  (60  N.  H.  297)  235 

I'.  Pass   (1  Port.  232)  97,  99,  100,  179 

V.  Pierce  (89  Mich.  233,  50  N.  W. 

851)  194 

V.  Stockwell  (11  Cush  236)  146 

V.  Tiernan  (10  G.  &  J.  253)     137,  600 

V.  Tobey  (5  Met.  168)  18 

V.  Trigg  (10  Leigh  246)  349,  361,  362 

363,  443 

V.  Whitley  (39  Ala.  172)  10 

Piersole  v.  Elliott  (6  Pet.  95)  289 

Pierson  v.  Hooker  (3  Johns  68)  131,  144, 

152  307 

V.  Steinmyer  (4  Rich.  309)         46,  62 

Pike  V.  Bacon  (21  Me.  280)  151,  153 

V.  Warren  (16  Me.  390)  159 

Pilcher,  Succession  of  (39  La.  Ann  362, 

1  So.  929)  2,  335 
Pillans  V.  Harkness  (CoUes  P.  C.  442)    11, 

276 
Pilling  V.  Pilling  (3  De  G.  J.  &  S.  162)  202 
Pim  V.  Harris  (Ir.  Rep.  10  Eq.  442)  202 
Pinckney  v.  Keyler  (4  E.  D.  Smith 

469) 

V.  Wallace  (1  Abb.  Pr.  82) 

Pine,  Ex  parte  (Cooke  B.  L.  503) 
Pinkerton,  Ex  parte  (6  Ves.  814) 
Pinkett  v.  Wright  (2  Hare  120) 
Pinkney  v.  Hall  (1  Salk.  126,  1 

Raym.  175) 
Pio  Pico  V.  Cuyas  (47  Cal  174) 
Pipe  V.  Bateman  (1  la.  369) 
Piper  V.  Smith  (1  Head  93) 
Pirtle  V.  Penn  (3  Dana  240) 
Pitcher  v.  Barrows  (17  Pick.  361) 

406,  411,  412 
Pitkin  V.  Pitkin  (7  Conn   307)  461 

Pitt  V.  Cholmondeley  (2  Ves.  Sen.  566) 

515  616 

V.  Petway  (12  Ired  69)  '  304 

V.  Smith  (3  Camp.  33)  27 

Pitts  V.  Mower  (18  Me.  361)  317 

V.  Spotts  (86  Va  71,  9  S.  E.  601) 

360 

V.  Waugh  (4  Mass.  424)  76,  348, 

349,  356 
Pittsburg  Melting  Co    v.  Reese  (118 

Pa.  355, 12  Atl.  362)  663 

Place  V.  Sweetzer  (16  Ohio  142)     291,  325, 

344 
Planter's  &  Miner's  Bank  v.  Padgett 

(69  Ga.  159) 
Piatt  V.  Halen  (23  Wend.  456) 
Plowden,  Ex  parte  (3  Mont.  &  A.  402, 

2  Dcac.  456) 
Plummer,  In  re  (1  Phil.  56) 


435 
497 
329 

554,  656 

Ld. 
2,167 
248 
653 
362 
281 

68,  308, 


60 
317 


472 
481 


Ixii 


TABLE   OF   CASES. 


Poillon  V  Lawrence  (77  N.  Y  207)       470 

i:  becor  (61  i\.  Y.  456)  1U4 

Pomdexter  v.  Waddy  (0  Alunf.  418)    172, 

427 
Polk  V  Buchanan  (5  Sneed  721)  46 

V.  Oliver  (50  Miss  566)  405 

Pollock  V.  Williiuns  (42  Miss.  88)  81 

Pomeroy  u   Ben  tun  (57  Mo.  531)  512 

V. (77  Mo  64)  527 

Porafret  v.  Wuidsor  (2  Ves   Sen.  482) 

515 

200 

60 


Pond 


.  Clark  (24  Conn.  370) 

r.  Ounimins  (50  Conn  372) 

c.  Kimball  (101  Mass  105)     335,  491 

Pontet  V.   Basingstoke  Canal  Co.    (2 

Scott  543)  655 

Ponton  V.  Dunn  (1  Russ  &  M.  402)      448 
Pool  V.  Delaney  (11  Mo.  570)       252,  254, 

255 

V.  Pratt  (1  D.  Chip.  252)  16 

Poole   V.    Hintrager   (00  la    180,   14 

N.  W.  223)  429 
V.  Seney  (66  la.  502,  24  N.  W. 

27)  332 

Pooley  V.  Driver  (5  Ch.  D.  458)     1,  3,  43. 

61 

V.  Whitmore  (10  Heisk.  629)  84 

Poor  V.  Carleton  (3  Suinn  81)  292 

Pope  V.  Cole  (55  N   Y.  124)  445 

('.  Randolph  (13  Ala.  214)      263,  264 

V.  Rislev  (23  Mo.  185)     163,  405,  413 

r.  Salsman  (35  Mo.  362)  508 

Popper  (•.  Scheider  (7  Abb.  Pr.  n  s 

56)  456 

Port  Gibson,  Bank  of,  v.  Baugh  (9  Sm. 

&  M.  290)  381 

Porter  v.  Cumings  (7  Wend.  172)  169,  183 

V.  Currv  (50  111  310)  139 

(,•   Gorman  (65  Ga.  11)  237 

V.  McClure  (15  Wend.  187)      53,  54, 


V.  Taylor  (6  Moo.  &  S.  156) 


66 
144, 
307,  385 
121 


384 
165 


307 
150 


i:  Vance  (14  Lea  629) 

V.  Wheeler  (37  Vt.  281) 

Porthouse  v.  Parker  (1  Camp  82) 
Portland  Bank  i-.  Hyde  (11  Me.  196) 
270,  271, 
Po.eey  V.  Bullitt  (1  Blackf.  99) 
Post  V  Kimberly  (9  Johns.  470)  37,  54, 
81,  102,  229 
Postmaster-General  v.  Furber  (4  Mas. 

332)  425 

Potomac,  The  (2  Black  481)  198 

Pott,  Ex  parte  (2  Sim.  257)  495 

V.  Eyton  (3  C.  B.  32)  41,  104 

Potter  V.  Commissioner  (10  Ex.  147)    237 


Gray  (1  R.  I.  1) 

V.  Greene  (9  Gray  809) 

V.  McCoy  (26  Pa.  458) 

V.  Moses  (1  R.  I  430) 

Potts  i\  Bell  (8  T.  R.  548) 

V.  Waugh  (4  Mass  424) 

Powell  V    Heisler  (16  Ore. 
Pac.  109) 


412, 


371,  373 

103 

96,  151 

55,60 

26 

35 

19 

512 


Powell  i;  Maguire  (43  Cal  11)  259 

V.  Messer  (18  Tex  401)         171,  172, 

173 
V.  Moore  (79  Ga.  524,  4  S.  E 

383) 

V.  North  (3  Ind.  392) 

V.  Waters  (8  Cow.  670) 

Powers   I'.   Guardian    Jns.    Co. 

Mass,  108) 
V.  Large  (69  Wis.  621,  35  N. 

53) 


44,  62 
452 

164,413 

(136 

235 

W. 
340 

V.  Robinson   (90  Ala.  225,  8  So. 

10)  351,  360 

Powles  V.  Page  (3  C.  B.  16)  119 

Pratt  V.  Hutchinson  (15  East  511)        554, 

555,  556 

V.  Langdon  (12  All  544)      45,  46,  74 

V.  (97  Mass.  97)  44,  45,  46 

Prentice  v.  Elliott  (72  Ga.  154)  527 

Prentiss  v.  Savage  (13  Mass.  20)  468 

V.  Sinclair  (5  Vt.  149)  40.3,  406 

Prescott,  Ex  parte  (4Deac.  &  Ch.  23)   485 
Preston  v.  Stratton  (1  Anst.  50)  255,  260, 

264,  265 
Price  V.  Alexander  (2  Greene  427)       151, 

152, 

V.  Drew  (18  Fla.  670) 

V.  Green  (16  M.  &  W.  346) 

V.  Groom  (2  Ex.  542) 

V.  Hicks  (12  Fla.  365) 

Priest  V.  Chouteau  (85  Mo.  398) 


153 
248 
224 

67 

354 

46,  47, 

51,  368 

82,  84 


Prince  v.  Crawford  (50  Miss.  344 
Princeton  &  K.  Turnpike  Co.  v.  Gulick 
(16  N.  J.  161)  403,406 


Pringle  v.  Leverich  (97  N.  Y.  181 
Printup  V.  Turner  (65  Ga.  71)       351, 
Prichard  v.  Draper  (1  Russ.  &  M.  191 ) 
69,  144,  168,  162, 
Pritt  V.  Clay  (6  Beav.  503) 
Proctor  V.  Moore  (1  Mass.  198) 

1-.  Sargent  (2  M.  &  G.  20) 

Prosser  r.  Hartley  (35  Minn.  340,  29 

N    W.  156) 
Protheroe  v.  Forman  (2  Swanst.  227) 


163 

;67 


515 
468 
401 

335 

290 


Providence  v.  Bullock  (14  R  I.  353) 

352 
Prnyn  i'.  Milwaukee  (18  Wis.  367)  203 
Publishing  Co.  v.  Gage  (11  Can.  306)  244 
Pugh  V  Currie  (5  Ala.  446)  349,  350,  353, 
354,  362,  363,  366,  367 


Pullen  V.  Ready  (2  Atk.  592) 

r.  Whitfield  (55  Ga.  174) 

Purcell  V.  Cole  (1  L.  &  T.  449) 
Purdom  v.  Bovd  (17  S.  W.  606) 
Purdy  V.  Powers  (6  Barr  492) 


179, 


511 
445 
514 
24 
274, 
276 


Purple  V.  Farrington  (119  Ind  164, 21 
N.  E.  543)  332 

Parsley  v.  Ramsey  (31  Ga.  403)     113,  403 

Purviance   v.  McClintee  (6  S.  &  R. 
259)  46 

V  Sutherland  (2  Oh.  St.  478)       151, 

153,  154 


TABLE    OF    CASES. 


Ixiii 


Purvines  v.  Champion  (67  111  459)       255 
Purvis  V.   Butler  (87    Mich.    248,   49 

N.  W.  5(J4)  65 

Putnaui  V.  Wise  (1  Hill  234)       53,  54,  U3, 

128,  555 


Q. 

Quayle  i-.  Guild  (91  111.  378)  306 

Queen  v.  Robsoii  (16  Q.  B.  D.  137)         52 

V.  Whitmarsh  (15  Q.  B.  600)  52 

Quine  v.  Quine  (9  Sin.  &  M.  155)  34,  58 
Qiiiner  c.  Marhleliead  Social  Ins.  Co. 

(10  Mass.  482)  131 

Quinlan  v.  Kciser  (66  Mo.  603)  512 

Quinlivan  o.  KnsiHsh  (42  Mo.  362)        401 

;;. (44  Mo.  46)  293 

Quinn  v.  Quinn  (81  Cal.  14,  22  Pac. 

264)  35 


R. 


Raba  v.  Ryland  (Gow  132)  115,  133 

Rabitte  v.  (Jrr  (88  Ala.  185,  3  So.  420)  49 
Rackstraw  u.  Iniber  (Holt  N.  P.  368) 

262,  519 
Radcliffe  v.  Wightman  (1  McC   Ch. 

408)  512 

Radenhurst!  v.  Bates  (3  Ring.  463)  258,  312 
Railroad  v.  Bixby  (55  Vt.  235)  345 

r.  Black  (8  E.x.  181)  20 

('.  Cazenove  (11  Q.   B.  935)  20 

r.  Culver  (75  Ala.  587)  65 

('.  Elliot  (57  N.  H.  397)  203 

V.  Fen  rule  V  (4  Ex.  26)  20 

V.  Hudson"  (16  Beav.  485)  384 

V.  Johnson  (7  S.  W.  838)  60 

V.  McCaughev  (62  Tex.  271)  334 

V.  McMichael  (5  Ex.  114)  20 

v.  Niles  (3  Hill  162)  66 

i:  Roach  (35  Kas.  740,  12  Pac.  93)  65 

V.  Spratt  (2  Duv.  4)  65 

V.  Trippe  (42  Ark.  465)  65 

Railsback  v   Lovejoy  (116  111.  442,  6 

N.  E.  504)  204,  350,  365 

Rainey  v.  Nunse  (54  111.  29)  477 

Rains  v.  McNairv  (4  Humph.  356)  303 
Raleigh,  Er  parte  (3  .Mont.  &  A.  670)  73 
Ralston  v.  Moore  (105  Ind   243)  445 

Ramey  v.  McBride  (4  Strobh.  12)  179 

Rammelsberg  v.  Mitchell  (29  Oh.  St. 

22)  237,  238 

Ramsbottom  v.  Duck  (1  Mont.  Part. 

135)  471 

V.  Parker  (6  Madd.  5)  210 

Randall  v.  Hunter  (66  Cal.  512)  98 

V.  Johnson  (13  R.  I.  338)         343,  344 

V.  Meredith  (11  S.  W.  170)  35 

f. (76  Tex.  669,  13  S.  W. 

576)  81,  84 

V.  Randall  (7  Sim.  271)  357 

Randel  v.  Chesapeake  Canal  Co.  (1 

Harr.  233)  219 


212 
222 

123 

6 

492 
492 
60 
499 
237 


347 
222 


^89,  459 


Randleson,  Ex  parte  (1  Mont  &  M'A. 

36)  9 

, (2  Deac  &  Ch.  534)  426 

Randolph  v  Randolph  (2  Call  537)  512 
Ransom,  In  re  (17  F.  R.  331)      7,  362,  364 

>:.  Van  Devcnter  (41  Barb.  307)    471 

Rapid,  Tiie  (8  Cranch  160)  26,  3l0 

Rapier  v.  Gulf  City  Paper  Co.  (64  Ala. 

330)  399 

Rapp  V  Latham  (2  B.  &  Aid.  795)  120,  163 
Ratcliffe  v.  Mason  (17  8.  W.  438)  352 

Rathbun  V.  McConnell   (27  Neb.  239, 

42  N.  W.  1042) 
Ratzer  v.  Ratzer  (28  N.  J.  Eq.  136) 
Rau  V.  Small   (144  Pa.  304,   22  Atl 

740) 
Raub  V.  Smith  (61  Mich.  543,  28  N.  W 

676) 
Raw  V.  Pole  (2  Vern.  239) 

V.  Potts  (Prec.  Ch.  35) 

Rawlinson  v  Clarke  (15  M.  &  W.292) 
Rawson,  Exparte  (Jae.  277) 

V.  Pratt  (91  Ind.  9) 

Rawstorne  v.  Gandell  (16  M.  &  W. 

304)  307,  312 
Ray  ;;.  Bogart  (2  Johns.  Cas  432)  512 
Raymond  v.  Carne  (45  N.  H.  201)  283 
V.  Palmer  (41  La.  Ann  425,  6  So 

692) 

V.  Putnam  (44  N.  H.  160) 

V.  Vaughn  (128  111.  256,  21  N.  E 

566) 

Raymond's  Case  (2  Rose  255)  127,  138 
Rayner  v.  Pearsall  (3  Johns.  Ch.  578)  512 
Reab  r.  Pool  (30  S.  C.  140,  8  S.  E.  703)  74 
Read  v.  Bowers  (4  Bro.  441)  291 

V.  Smith  (60  Tex.  379)  8,  9 

V.  White  (5  Esp.  122)  482,  485 

Reade  v.  Bentley  (3  Kay  &  J.  271,  4 

Kay  &  J.  65)  371,  373,  374 

Reber  v.  Col.  Machine  Mfg.  Co.  (12 

Oh.  St.  175)  103 

Reddington  v.  Lanahan  (59  Md.  429)      60 
Redlon  v.  Cimrcliill  (73  Me.  146)     99,  187 
Redman  v.  Green  (3  Ired.  Eq.  54) 
Reece  v.  Hoyt  (4  Ind.  169) 
Reed  v.  Boardman  (20  Pick  441) 

V.  Hussey  (Bl.  &  H.  525) 

v.  Murphv  (2  Greene  574) 

V.  Norris'(2  My.  &  C.  361) 

(;.  Upton  ( 10  Pick  525) 

V.  Vidal  (5  Rich.  Eq.  289) 

V.  White  (5  Esp.  122)        95,  387,  416 

Reed  Lumber  Co.  v.  Lewis  (94  Ala. 

626, 10  So.  333)  146 

Reese  v.  Bradford  (13  Ala.  837)  327,  328, 

338 
Reeve,  Ex  parte  (9  Ves.  588)  489,  497,  499 
Reeves  r.  Ayres  (38  111.  418)  474 

Rehfuss  V.  Moore  (134  Pa.  462,  19  Atl. 

756)  537 

Reid,  Ex  parte  (2  Rose  84)     472,  498,  499 

V.  HoUinshead  (4  B.  &  C.  867,  7 

D.  &  R.  444)  55,  115,  133 
V.  McQuesten  (61  N.  H.  421)        252 


515 
391 
421 
60 
45,  62 
503 
483 
279 


Ixiv 


TABLE    OF    CASES. 


Reilly  v.  Smith  (16  La  Ann.  31)  405 

Reimsdyk  v.  Kane  (1  Gall.  630)    162.  164, 

169 
Regden  v.  Pierce  (6  Madd.  353)  502,  503, 

504,  531 
Regester  v.  Dodge  {6  F.   R.  6,  19 

Blatcli.  79)  415 
Regina  v.  Mallinson  (16  Q.  B.  367)  303 
V.  Registrar  of  J.  S.  Cos.   (10  Q. 

B.  839)  551 

I'.  Whitraarsh  (19  L.J.  Q.  B.  185) 

551 
Remick  v  Emiz  (41  111.  343)  434 

Remington  v.  Allen  (109  Mass.  47)        248 

r.  Cummings  (2  Wis.  138)  155 

Rencher  v.  Anderson  (95  N.  C.  208)     204, 

306 
Renfrow  v.  Pearce  (68  111.  125)  204 

Renton  i-.  Chaplain   (1  Stock.  62)  292,  300 

391  392 
Reppert  v.  Colvin  (48  Pa.  248) 
Reubin  v.  Cohen  (48  Cal.  545) 
Rew  V.  Pettet  (1  A.  &  E.  196) 
Rex  V.  Almon  (5  Burr.  2686) 

V.  Cole  (  1  Ld.  Raym.  443) 

V.  Dodd  (9  East  516) 

V.  Hard  wick  (11  East  578) 

V.  Marsh  (2  B.  &  C.  723) 

V.  Pearce  (Peake  75) 

V.  Sanderson  (1  Wightw.  50)  344,  475 

r.  Topham  (4  T.  R.  126)  124 

V.  Webb  (14  East  406)  554,  556 

Reybold  v.  Dodd  (1  Harr.  401)      200,  384 
Reyburn  v.  Mitchell  (106  Mo.  365,  16 

S.  W.  592) 
Reynard  v.  Chase  (2  Wils.  40) 
Reynell  v.  Lewis  (15  M.  &  W.  517) 
Reynolds  v.  Austin  (4  Del.  Ch.  24) 

V.  Cleveland  (4  Cow.  282)   37,  74,  81, 

91 

V.  Hicks  (19  Ind.  113)  127,  128 

V.  Johnson  (54  Ark.  449, 16  S.  W. 

124)  332 

V.  Mardis  (17  Ala.  32)  201,  527 

V.  Pool  (84  N.  C.  37)  53 

V.  Toppan  (15  Mass.  .370)  45,  63 

V.  Ward  (5  Wend.  501) 

Rhea  v.  Rhenner  (1  Pet.  105) 
Rliodes  V.  McKean    (55  la.  547,  8  N 

W.  359) 
Rianhard  r.  Hovey  (13  Ohio  300) 
Riarl  v.  Wilhelm  (3  Gill  3-56) 
Rice,  Appellant  (7  All.  112) 
V.  Austin  (17  Mass.  197) 


160 
170 
157 
124 
21 
549,  553 
164 
124 
124 


332 
15 

105 
293 


41 
-23 


98 

50 

248 

445 

45,  61,  63, 

64,  325,  339 

V.  Barnard  (20  Vt.  479)       361 

V.  Barrett  (116  Mass.  312)      103 

V.  Pennypacker  (5  Houst.  279)  306, 

352  372 

V.  Rockefeller  (134  N.  Y.  174,  3l' 

N.  E.  907)  561,  562 

V.  Shuman  (43  Pa.  37)  5 

V.  Shute  (5  Burr.  2611)  469 

Rich  V.  Davis  (4  Cal.  22)  180 
V.  Flanders  (39  N.  H.  304)  162 


Rich  V.  Pilkinton  (Carth.  171) 
Richards  v.  Baurman  (65  N.  C  162) 


125 

293, 
466 

V.  Butler  (65  Ga.  593)  405 

V.  Davies  (2  R.  &  M.  347)     280,  281, 

293,  456,  457,  510 

V.  Dutch  (8  Mass.  506)  468 

V.  Grinnell  (63  la  44,  18  N.  W. 

7,306 
Heatlier  (1  B.  &  Aid.  29) 

V.  Hunt  (65  Ga.  342) 

V.  Manson  (101  Mass.  482) 

V.  Todd  (127  Mass.  167) 

Richardson,  Ex  parte  (Buck  209) 


668) 


444 
404 

332 

305,  529 

503 


(3  Madd.  138)  451,  452 

;  In  re  (5  L.  J.  Ch.  129)  499 

, (11  N.  B.  R.  114)  491 

V.  Adler  (46  Ark.  43)  335 

v.  Bank  of  England  (4  My.  &  C. 

171)  214,249,517 

V.  Boright  (9  Vt.  368)  18,  20 

V.  Buhl  (77  Mich.  632,  43  N.  W. 

1102)  567 

V.  Davis  (11  So.  790)  403 

V.  Farmer  (36  Mo.  35)  73 

V.  French  (4  Met  577)  123 

V.  Gregory  (126  111.  166, 18  N.  E. 

777)  374 

V.  Hastings  (  7  Beav.  301)     457,  510 

V.  Hogg  (38  Pa.  153)  538,  540 

V.  Hughitt  (76  N.  Y.  55)  61 

u.  Larpent  (2  Y.  &  C.  507)  384 

V.  Moies  (31  Mo.  430)  381 

V.  Pitts  (71  Mo.  128)  50 

V.  Snider  (72  Ind.  425)  405 

V.  Tobey  (3  All.  81)  466 

V.  Wyatt  (2  Desaus.  471) 

V.  Wyman  (4  Gray  553) 

Richmond  v.  Heapy  (1  Stark    202) 


485 

145, 

179 

52 


I'.  Judy  (6  Mo.  App.  465) 

Richmond  Ry.  &  Electric  Co.  v.  Dick 

(52  F.  R.  379)  119 

Richter  v.  Poppenhausen    (42  N.  Y. 

373)  65 

Ricker  i^.  Amer.  L.   &  T.  Co.    (140 
Mass.  346,  5  N.  E.  248)     131,  549,  559, 

560 
Ricketts  v.  Bennett  (4  C.  B.  686)  82 

Riddle  v.  Whitehill  (135  U.  S.  621)     306, 
352,  359,  393 
Ridenour  v.  Mayo  (40  Oh.  St  9)  51 

Ridgeley  v.  Crandall  (4  Md.  4.35)  16 

Ridgley  v.  Carey  (4  H.  &  McH.  167)  137, 

500 
Ridgway  v.  Clare  (19  Beav.  Ill)  325,  330, 

445 

V.  Grant  (17  111  117) 

V.  Philip  (1  C.  M.  &  R.  415) 


1,. (5Tyrw.  131) 

Ridgway's  Appeal  (15  Pa.  177) 
Riding  w.  Smith  (1  Ex  D.  91) 
Ridlev  V.  Plymouth  &c.  G.  &  B. 
(2  Ex.  711) 


257,  258 
69,  105, 

164 

107 
354,  369 

236 
Co. 

551 


TABLE   OF   CASES. 


Ixv 


Ridley  V.  Tavlor  (13  East  175)  96,  99, 108, 
172,  173,  175,  170 
Kiedeburg  v.  Sclimitt  (71  Wis.  044,  38 

N.  W.  330)  128 

Ricser,  In  re  (19  Hun  202)  497 

Rigden  v.  Fierce  (0  Madd.  353)    443,  407, 

609 
Righter  V.  Farrel  (134  Pa.  482, 19  Atl. 

087)  65 

Riley  V.  Carter  (25  Atl.  667)      186,  364, 
'  476 

Rilling  V.  Thompson  (12  Bush  310)  203 
Rimel  c  Hayes  (83  Mo.  200)  69,  104 

Rui'^o  V.  Wing  (49  Ar.c.  457,  5  S.  W. 

787)  118,231,427,429 

Riper  v.  Poppenhausen  (43  N.  Y.  08)  540 
Ripley  v.  Colby  (23  N.  H.  438)  37,  59,  110 

V.  Water  worth  (7  Ves.  425)  357 

Rishton  v.  Grissell  (L  R.  5  Eq.  326)  524 
Rittenhouse  v.  Leigli  (57  Miss.  697)  24 
Rizer  v.  James  (20  Kas  221)  105 

Roauh  /'.  IJrannou  (57  Miss.  490)  136,  437 

').  Perry  (10  III.  37)  34,  200,  234 

Roache  c  Pendergrast  (3  H.  &  J.  33)  253 
Robb  V.  Miidge  (14  Gray  534)  402,  484 
Robbins  (.'.  Butler  (24  111.  387)  550 

0.  Cutler  (26  N   H.  173)  17 

V   Fuller  (24  N.  Y.  570)  370 

V.  Laswell  (27  111.  3(55)  59 

y.  Willard  (6  Pick.  464)  164 

Robert  c.  Garnie  (3  Cai.  14)  420 

Roberts  v.  Anderson   (2  Johns.   Ch. 

202) 
V.  Eldred  (73  Cal.  394,  15  Pac. 

16) 

V.  Everhardt  (1   Kay  148)     34,  293, 

294,  290,  298 

r   Filler  (13  Pa.  265)  251,  208 

V.  Hardy  (3  M.  &  S.  533)         20,  310 

V.  Johnson  (58  N.  Y.  613) 

V.  Kuffln  (2  Atk.  112) 

c.  Law  (4  Sandf.  642) 

V.  McCarty  (9  Ind.  10) 

V.  Oldham  (03  N  C.  297) 

r.  Ripley  (14  Conn.  513) 

V.  Spencer  (123  Mass   397) 

V.  Strang  (38  Ala.  560) 

V.  Totten  (13  Ark.  009)  124,  194,  215 

Robertson  v.  Corsett  (39  Mich.  777)  3 

V.  Lockie  (10  Jur.  533)  460 

V.  Mills  (2  H.  &  G.  90)  172,  180 

V.  Quiddington  (28  Beav.  529)     237, 

243 

V.  Smith  (18  Johns.  478)  22,  70 

Robey  v.  Howard  (2  Stark.  557)  37,  532 
Robins  v.  Eaton  (10  N.  H.  561)  18,  19 
Robinson,  Ex  parte  (4  Deac.  &  Ch. 

9)  499 

,  In  re  (1  Mont.  &  A.  18)  471 

V.  Allen  (85  Va.  721,  8  S.  E.  835)   46, 

58,  333 

r.  Anderson  (20  Beav.  98, 7  De  G. 

M.  &  G.  239)  221 

V.  Bullock  (58  Ala.  618)  53 

V.  Crowder  (4  McC.  519)        135,  153 


292 
521 


124 

515 
517 
354,  359 
345 
247 
407 
144 


Robinson  v.  Goings  (63  Miss.  500) 


V.  Gregory  (30  N.  Y.  350) 
V.  Hotinan  (4  Bing.  502) 
V.  Hurlbut  (34  Vt.  115) 
w.  McDonnell  (5  M.  &  S.  228) 
V.  Mcintosh  (3  E.  D.  Smith  221)  135, 
209,  252,  540,  545 


119, 
125 
135 
140 
95 
493 


V.  Mansfield  (13  Pick.  139) 

V.  Marciiant  (7  Q.  B.  918) 

V.  Reynolds  (1  Aik.  174) 

V.  Rudkuis   (38   Eng.  L.   &  Eq. 

372) 
V.  Simmons  (146  Mass.  167,  15 

N.  E.  558) 

V.  Taylor  (4  Barr  242) 

V.  Thompson  (1  Vern.  465) 

V.  Wilkinson  (3  Price  538) 


320 

321 

23 

90 


V.  Williams  (8  Met.  454) 

Robson  V.  Curtis  (1  Stark.  78) 


439 

381 

188 

75,  95, 

272,  387 

264 

248,  255, 

205 

V.  Drumraond  (2  B.  &  Ad.  303)   272, 

315,317,318 
Roby  V.  Colehour  (135  111.  300,  25  N. 

E.  777)  204 

Rochester,  Bank  of,  v.  Bowen  (7  Wend. 
158)  185 

V.  Monteath  (1  Den.  402)     110,  113, 

114,  169,206 
Rockafellow  v.  Miller  (107  N.  Y.  507, 

14  N.  E.  433)  128 

Rockwell  V.  Wilder  (4  Met.  556)  252,  253, 

255,  201,  265 

Rocky  Mountain  Nat.  Bank  v.  Mc- 

Caskill  (16  Col.  408,  26  Pac.  821)     169, 

171,  404,  405 

Rodgers  v.  Maw  (4  D.  &  L.  66)  385 

V.  Meranda  (7  Oh.  St.  179)     331,  476 

('.  Nowell  (5  C.  B.  109)  244 

Rodney  v.  Hare  (Mos.  296)  515 

Rodriguez  v.  Heffernan  (5  Johns.  Ch. 

417)  120,132,137,138,325,555 

Rod  well  V.  Redge  (1  C.&  P.  220)  272,317 

Rogers  v.  Batchelor  (12  Pet.  221)     96,  97, 

98,  100,  110,  132,  137,  147,  172,  173 

V.  Coit  (6  Hill  322)  111,  181 

V.  Hurd  (4  Day  57)  16 

V.  Imbleton  (5  B.  &  P.  117)  126 

V.  Murray  (110  N.  Y.  658,  18  N. 

E.  261)  68 

V.  Nichols  (20  Tex.  719)      328,  338, 

391 

V.  Priest  (74  Wis.  538,  43  N.  W. 

510)  84 

V.  Reed  (18  Me.  257)  370 

V.  Rogers  (1  Hall  391)  250 

(,.. (5Ired.  Eq.  31)  270,307 

V.  Taintor  (97  Mass.  291)  243 

Rolfe  V.  Flower  (L.  R.  1  P.  C.  27)      481, 


V.  Peterson  (2  Bro.  P.  C.  436) 

V.  Rolfe  (15  Sim.  88) 

Rollins  V.  Stevens  (31  Me.  454) 
Rolston  V.  Click  (1  Stew.  526) 


491 
224 

278 
185 
185 


Ixvi 


TABLE   OP    CASES. 


Rooke  V.  Nisbet  (50  L.  J.  n.  s.  Ch. 

5bS)  52U,  530 

Roope  V.  Herron  (15  Neb.  73,  17  N. 

W.  353)  4,  332 

Roosevelt  v.  Mark  (6  Johns.  Ch.  26G)  159 
Rootes  V.  Wellford  (4  Muiif.  215)  1(33 

Rooth  V.  Quin  (7  Price  193)      (JO,  79,  387, 

402 
Roots  V.  Mason  City  Salt  Co.  (27  W. 

Va.  483)  201,  388 

V.  Welford  (4  Munf.  215)      '         37fi 

Rose  V.  Coffield  (53  Md.  18)  404,  405 

V.  Daniel  (3  Brev.  438)  20 

V.  Gunn  (79  Ala.  411)  108 

V.  Murckie  (2  Call  409)  273 

V.  Poulton  (2  B.  &  Ad.  822)  271 

Rosenbaiun  v.  Hayden  (22  Neb.  744, 

36  N.  VV.  147)  115 

Rosenfield  v.  Haight  (53  Wis.  260,  10 

N   W.  378)  62 

Rosenkrans  v.  Barker   (115  111.  331, 

3  N.  E.  93)  125 

Rosenstein  v.  Burns  (41  F.  R.  841)      45-5, 

457,  402 
Ross  ■;;.  Cornell  (45  Cal.  133) 

V.  Decy  (2  Esp.  469) 

y.  Drinker  (2  Hall  415) 

V.  Henderson  (77  N.  C.  170) 


248 

75,  272 

60 

325,351, 

366 


156 

92 
437 
293 
538 
465 


V.  Howell  (84  Pa.  129) 

V.  Lawhorn  (Dud.  360) 

V.  Pearson  (21  Ala.  473) 

V.  Titsworth  (37  N.  J.  Eq.  333) 

Rothchild  ,:  Hoae  (43  F.  R.  97) 
Rothwell  V.  Dewees  (2  Black  613) 

V.  Humphreys  (I  Esp.  406)       89,  143 

Roulston  V.  Washington  (79  Ala.  519)  361 
Ronquette  v.  Ryan  (8  S.  W.  702)  204 

Rousillon    V.    Rousillon    (14    Ch.    D. 

351 )  566 

Rovelsky  v.  Brown  (92  Ala.  522,  9  So. 

182)  367 

Rowe  V.  Wood  (2  Jac.  &  W.  556)         194, 

199,  507 
Rowland,  In  re  (L.  R.  1  Ch.  421)  108,  463, 

475 

r.  Boozer  (10  Ala.  690)  349 

• V.  Long  (45  Md.  439)  55 

Rowlandsnn,  Ex  parte  (1  Rose  89)    40,  56 

,  (1  Rose  416)  468,  490,  493 

, (2  Yes.  &  B.  173)  326,  327 

. (3  P.  Wms.  405)  487,  4»6 

Rowlev  V.  Adams  (8  Jur.  994)  230 

V   Stoddard  (7  Johns.  207)  143 

Rowth  r   Howell  (3  Ves.  565)  453 

Roxby,  Ex  parte  (1   Mont,  on  Part. 

198)  485 

Rovs  V.  Vilas  (18  Wis.  169)  434,  435 

Ruckman   v.   Decker   (23  N.  J.  Eq. 

283)  118,  165,  361 

Ruddock's  Case  (6  Co  2-5)  152 

Ruff,  Ex  parte  (6  Ves.  126)  475 

Ruffin,  Ex  parte  (6  Ves.  119)         136,  137, 

326,  327,  328,  336,  338,  436,  463,  469, 
490,  494,  500 


Ruffner  v.  McConnell  (17  111.  212)  153 
Rufford,  Ex  parte  (1  Glyn  &  J.  41)  485 
Rumery   v.   McCuUoch  (54  Wis.  565, 

12  N.  W.  65)  151,  367 

Runnels  v.  Moffat  (73  Mich.  188,  41 

N.  W.  224)  06 

Rush  V.  Tliompson  (  112  Ind.  158,  13 

N.  E.  665)  163 

Rushing  v   Peoples  (42  Ark  390)  56 

liussell  V.  Annable  (109  Mass.  72)         154 

o.  Austwick  (1  Sim.  52)  196 

u.  Byron  (2  Cal.  86)  248 

V.  Grimes  (46  Mo.  410)  266 

V.  Leland  (12  All.  349)  71 

V.  Lennon  (39  Wis.  570)  335 

V.  Loscomb  (4  Sim.  8)  508 

V.  Miller  (26  Mich.  1)  354 

V.  Pellegrini  (6  E.  &  B.  1020)        148, 

219 

V.  Perkins  (1  Mass.  368)  315 

V.  Swan  (16  Mass.  314)  311,  312 

Russia   Cement  Co.   i'.    Lepage   (147 

Mass.  206,  17  N.  E.  304)  242,  243 

Rust  V.  Cliisolm  (57  Md.  376)  435 

Ruth  V.  Lowrey  (10  Neb.  260,  4  N.  W. 

977)  334,  478 

Rutherford  v.   Hill   (22  Ore.  218,  29 

Pac.  546)  50 

Rutland    Marble    Co.    v.   Ripley    (10 

Wall.  339)  284 

Rutledge  v.  Squires  (23  la.  53)  97 

Rutter  V.  Tailis  (5  Sandf.  610)  295 

Ryan  v.  Mackmath  (3  Bro.  C.  C.  15)    209 


S. 


Sadler,  Ex  parte  (15  Ves.  52) 

V.  Lee  (6  Beav.  324)        123,  142, 

V.  Nixon  (5  B.  &  Ad.  936) 

Sage  V.  Ensign  (2  Ail.  245) 

V.  Sherman  (2  N.  Y.  417) 

Sager  v.  Tupper  (38  Mich.  258) 
St.  Barbe,  Ex  parte  (11  Ves.  413) 

Sainter  v.  Ferguson  (7  C.  R.  727) 
St.  James's  Club,/?/  re  (2  De  G.  M.  & 

G.  383) 
St.  John  V.  Holmes  (20  Wend.  609) 

V.  Standring  (2  Johns.  468) 

St.  Johns,    Ex  parte    (Cooke   B.    L. 

510) 
St.  Marv's,  Bank  of,  v.  St.  John  (25 

Ala.  566)  32, 

Sale  V.  Dishman  (3  Leigh  548) 
Salem,  Bank  of,  v.  Thomas  (47  N.  Y. 

15) 
Salinas  v.  Bennett  (33   S.  C.  285,  11 

S.  E.968)  18, 

Salisbury's  Case  (6  Ves.  747)        474, 

Salland  v.  McRae  (16  La.  Ann.  193) 
Salmon  v.  Davis  (4  Binn.  375)       152, 
Salomons  v.  Nissen  (2  T.  R.  674)     37 
139,  304, 


478 
4.59 
2-18 
160 
95 
68 
474, 
499 
224 

52 
155 
304 

474 

273 
94 

89 

367 
496, 
499 
86 
307 
,58, 
466 


TABLE    OF    CASES. 


Ixvii 


Salsbury  v.  Ellison  (7  Col,  167,  2  Pac. 

y06,  3  Pac.  485)  136 

Salter  V.  Ham  (31  N.  Y.  321)  60,  505 

Saltmarsli  v.  Bower  (22  Ala  221)  143 

Saitoun  V.  Houston  (1  Bing  433)  430 

Sampson  v.  Shaw  (101  Mass  145)  323 
Sanborn  v.  Merrill  (15  Vt.  700)  304 

V.  Royce  (182  Mass.  5'J4)  343 

V.  Stark  (31  F    R    18)  168 

Sander  v.  Sander  (2  Coll.  270)  460 

Sanders   v.   RuJdle   (2   T.    13.  Mon. 

139)  118 

I'.  Young  (31  Miss   111)  344 

Sanderson  v.  Brooksbank  (4  C.  &  P. 

286)  180 

V.  Stockdale  (11  Md  503)  476 

Sandham,  Ex  parte  (4  Deac.  &  Ch. 

812)  428 

Sandilands   v.  Marsh    (2    B.   &  Aid. 

673)  142,  103,  186,  206 

Sandusky,  In  re  (17  N.  B  R.  452)  336 
Sanford  v.  Mickles  (4  Jolins.  224)  381 
Sangster  v.  Mazarredo  (1  Stark.  161)  68 
Sangston  v.  Hack  (52  Md.  173)  47,  20], 
213,  222,  525,  527 
San  Jose  Indians,  The  (2  Gall.  208)  20,  234 
Santa  Clara  Min.  Ass.  v.  Quicksilver 

Min.  Co.  (17  F.  R.  657,  8  Sawy. 

330)  34 

Sargeant,  Ex  parte  (1  Glyn  &  J.  183)  260 
Sargent  v.  Henderson  (79  Ga.  268,  5 

S.  E.  122)  85 

Saunders  v  Johnson  (Skin.  401)  216,  257 
V.  Reilly  (105  N.  Y.  12,  12  N.  E 


170) 


331 
491 
463 
350 
468 
433 
400 


Sauthoff,  //(  re  (16  N.  B.  R.  181) 
Savaoe.  In  re  (16  N.  B.  R.  -308) 

v.  Carter  (9  Dana  408) 

V.  Marsii  (10  Met.  594) 

V.  Putnam  (32  Barb.  425) 

V.  Rockwell  (32  X.  Y.  501) 

Saville  v.  Robertson  (4  T.  R.  725)    73.  88, 
89,  101,  102,  184,  220,  430 
Saving  &  Loan  Soc.  v.  Gibb  (21  Cal. 

595)  438 

Sawver  r.  Proctor  (2  Vt.  580)  264,  265 
Saver  v.  Bennet  (1  Cox  107)  452,  458,  459 
Savre  v   Herick  (7  W.  &  S.  383)  38 

Scaife  v.  Jackson  (5  D.  &  R.  290,  3  B. 

&C.  421)"  483 

Scales  u.  Jacob  (3  Bing.  652)  157 

Scanlon  (•.    Union  Ins.    Co.  (4   Biss. 

511)  235 

Scarf  V.  Jardine  (7  App.  Cas.  345)  403 
Schack  r.  Autorg  (1  M.  &  S  574)  316 
Schatzill  V.    Bolton  (2  McC.   478,   3 

McC.  33)  345 

Scheifflin  v.  Stevens  (1  Wins.  106)  405 
Schenierhorn  v.  Loines  (7  Johns.  311)  95 
Schenkl  v.  Dana  (118  Mass.  236)  200 

Schindel  v.  Gates  (46  Md.  604)  160 

Schlapback  v.  Long  (90  Ala.  525,  8 

So.  113)  24,103,335 

Schleicher  v.  Walker  (28  Fla.  680,  10 

So.  33)  331,  333 


Schmertz  v.  Shreeves  (02  Pa  457) 
Schmidlapp  v.  Currie  (55  Miss.  597)  98, 
Schneider  t:  Sansom  (62  Tex  201) 
Scholefield   v.   Eichelberger    (7    Pet. 

585)  2(),  127,  399,  432, 

V.  Heafield  (7  Sim   667) 

Scholey  v.  Walton  (12  M.  &  W.  510) 
Schollenberger  v.  Seldonridge  (49  Pa. 

83)  95,  181, 

Schulten  v.  Lord  (4  E.  D.  Smith  206) 

Sehurtz  v.  Romer  (82  Cal.  474,  23  Pac 

118) 
Schwabacker  v.  Riddle  (84  111.  517) 
Schwanck  c.  Davis  (25  Neb.  196,41 

N.  W.  141)  134, 

Scotland,    Bank  of,  v.  Christie  (8  CI. 

&  F.  214) 
Scott  V.  Avery  (8  Ex.  487,  5  H.  L.  C. 

811)  148, 

V.  Beale  (6  Jur.  n.  ^.  559) 

V.  Berkeley  (3  C.  B.  925) 

V.  Buchanan  (11  Humph.  468) 

V.  Campbell  (30  Ala.  728)         45, 

252, 

V.  Colraesnil  (7  J  J.  Marsh.  416) 

114, 

V.  Dansley  (12  Ala  714) 

V.  Fisher  (4  T.  B.  Mon.  387) 

V.  Godwin  (IB  &  P.  74) 

V.  Mdne   (5   Beav.  215,    7  Jur. 

709)  443, 

V.  Raynient  (L.  R.  7  Eq.  112) 

v.  Rowland  (26  L.  T.  Rep.  391) 

Scott's  Appeal  (88  Pa.  173) 
Scruegs  V.  Blair  (44  Miss.  406) 

"r.  Burruss  (25  W.  Va.  670) 

r.  Russell  (McCah.  39) 

Scull's  Appeal  (7  Atl.  588) 

Sea,  F.  &  L  Ass.  Soc.  In  re  (5  De  G. 

M.  &  G.  465) 
Seabury  v.   Bolles   (51  N.  J    103,  16 

Atl.  54)  103, 

Searle  v.  Adams  (3  Kas  315) 
Sears  v.  Starbird  (78  Cal.  225,  20  Pac 

547)  159,  160, 

Second  Nat.  Bank,  Appeal  of  (83  Pa. 

203) 

V.  Burt  (93  N.  Y  233)  113, 

V.  Hall  (35  Oh.  St.  158) 

V.  Hume  (4  Mack,  90) 

Secor  i\  Keller  (4  Duer  416) 
Seddon,  Ex  parte  (2  Cox  49)  483, 

V.  Connell  (10  Sun.  79) 

Sedgwick  v.  Daniell  (2  H  &  N  319) 


154 
331 
132 

444 
444 

448 


Seelev  v.  Mitchell  (85  Kv.  508,  4  S.  W. 

190') 
Seibert  v.  Bakewell  (87  Pa.  506) 
Seighortner  v.  Weissenborn  (20  N.  J. 

Eq   172)  455, 

Seldner  v.  Mount  Jackson  Nat  Bank 

(66  Md.  488,  8  Atl.  262) 
Seldon  v.  Hickock  (2  Cai.  167) 


542, 
545 

231 

118 

170 

425 

220 
427 
554 
17, 
20 
,48, 
254 
76, 
409 
112 
420 
316 

515 
210 
242 
254 
354 
135 
7 
478 

552 

104 
203 

268 

359 

488 
50 
186 
273 
485 
269 
255, 
269 

.368 
540 

456 

146 
303 


Ixviii 


TABLE    OF   CASES. 


Seligman  i'.  Heller  Bros.  Clo.  Co.  (69 

Wis  410,  34  N.  W.  232)  347 

Sellers  v.  Shore  (89  Ga.  416,  15  S.  E. 

494)  335,  433,  435 

V.  Streator  (5  Jones  261)        154,  155 

Sells  V.  Hubhell  (2  Johns.  Ch.  397)  276 
Servant  v.  Rusk  (43  Cal.  235)  491 

Servante  v.  James  (10  B  &  C.  410)  207 
Serviss  v.  McDonnell  (107  N.  Y.  260, 

14  N.  E.  314)  429 

Sessions  v.  Jones  (0  How.  Miss.  123)     289 

V.  Kichinond  (1  R.  I.  298)  223 

Settenibre  v.  Putnam  (30  Cal  490)  556 
Setzer  r.  Beale  (19  W,  Va.  274)  47,  128 
Sewall  V.  Cailin  (3  Wend.  291)  320 

Sewel  V.  Bridge  (1  Ves.  Sen.  297)  615 
Sexton  r.  Anderson  (95  Mo  373,  8  S. 

W.  564)  98,  331 


Se.xton  (9  Gratt.  204) 
Shaaber  v.  Bushong  (105  Pa.  514) 
Shackelford  v.  Clark  (78  Mo  491) 


195 
83 

476, 
478 


r.  Shackelford  (32  Gratt.  481)        332 

Shackle  v.  Baker  (14  Ves.  468)  237, 239,  240 


Shafer  v.  Randolph  (99  Pa.  250) 
Shafer's  Appeal  (106  Pa.  49) 
Shaffer  r.  Snvder  (7  S.  &  H.  503; 
Shakeshaft's  Case  (G  Ves.  123) 


Trowbridge   (28  N.  J. 


10: 

350 

411 

474,  496, 
499 

Eq. 

97 
409 


Shaler 

595) 
Shaniburg  v.  Abbott  (112  Pa  6) 

V  Ruggles  (83  Pa.  148)  409,429,  554 

Shanks  v.  Klein  (104  U.  S.  18)  364 

Shannon  v.  Wriglit  (60  Md.  520)  284,  293 
Sharon  Canal  Co.  (;  Fulton  Bank  (7 

Wend.  412)  28 

Sharp  V.  Hibbins  (42  N  J.  Eq  543,  9 

Atl.  113)  508 
V.  Hutchinson  (100  N.  Y  533,  3 

N  E.  500)  542 

r.  Taylor  (2  Phil.  801)  8,  269 

V.  Warren  (6  Price  131)  259 

Sharpe  v  Cummins  (2  D.  &  L  504)      232 
Sbattuck  V.  Chandler  (40  Kas.  516,  20 

Pac    225)  134,  136 

Shaw,  Appellant  (81  Me.  207, 16  Atl. 

662)  432,  451 

,  Ex  parte  (1  Glvn  &  J.  129)  146 

V.  Holland  (15  M   &  W.  136)         550 

V.  Picton  (4  B  &  C.  715)  421 

V.  Rhodes  (2  Russ  539)  299 

V.  Pratt  (22  Pick.  305)  143 

V.  Robbins  (12  Wheat.  369)  468 

Shea  V.  Donahue  (15  Lea  160)  223 

Shearer  v.  Paine  (12  All.  289)  367 

V.  Shearer  (98  Mnss.  107)      354,  361 

Sheble  v.  Strong  (128  Pa.  315,  18  Atl. 

397)  538 

Shed  V.  Pierce  (17  Mass  623)  144 

Sheedy  v.  Bank  (62  Mo.  17)  345 

Sheehy  v.  Graves  (58  Cal  449)  231 

V.  Mandeville  (6  Cranch  253)  76. 

416,  417,  483,  484 
Shelby  v.  Mandeville  (6  Cranch  264)      95 


Shelton  V.  Cocke  (3  Munf.  191)     159,  160 

V   Knight  (68  Ala.  5U8)  201 

V.  Pollock  (1  H.  &  M  422)  150 

Shepard  r   Haw  lev  (1  Conn.  367)    38,  165 

V.  Pratt  (16  Kas.  209)  46 

Shepherd,  Ex  parte  (2  Mont  D  &  D 
204)  485 

V.  Morris  (4  Beav.  252)  514 

V.  Towgood  (T.  &  H.  379)  503 

Shepley  v.  Waterhouse  (22  Me  497)     159 
Sheppard  v.  Boggs  (9  Neb.  257,  2  N.  W. 
370)  237 

V.  Oxenford  (1  K.  &  J  491)  298 

Sheridan  v.  Medara  (2  Stockt.  469)         61 
Sherman  v.  Kreul  (42  Wis.  33)  445 

Sherrod  v.  Langdon  (21  la  518)  103 

Sherry  r.  Gilmore  (58  Wis.  324,  17 

N.  W.  252)  351 

Sherwood  ?•.  Barton  (36  Barb,  284)        179 

V.  Creditors  (42  La.  Ann.  103,  7 

So.  79)  231,  542 

V.  Mar  wick  (5  Me.  295)  118 

V.  St.  P.  R.  R.  (21  Minn  127)  7,  350 

V   Snow  (46  la.  481)  171,  187 

Shieknesse  v.  Bromilow   (2   Cr    &  J. 

425)  82 

Shields  v.  Oney  (5  Munf.  550)  272 

Shirley  v  Long  (6  Rand.  735)  465 

Shirreff  y.  Wilks  (1  East  4b)  96,  174,  176, 

•  427 
Shoe  &  Leather  Bank  v.  Herz  (89  N. 

Y.  629)  404 

Shoemaker  v.  Benedict  (UN  Y.  176)  160 
Shoemaker  Piano  Mfg.  Co.  v.  Bernard 

(2  Lea  358)  427,  429 

Shorb  V  Benudrv  (56  Cal.  446)  50 

Short  V.  Magruder  (22  F.  R.  46)  350 

Shotwell  V.  Miller  (Coxe  181)  143 

Shriver  r.  McCloud  (20  Neb    474,  30 

N.  W   534)  9 

Shriver's  Appeal  (12  Atl  553)  201 

Shropshire  v.  Shepperd  (3  Ala  733)  32,  45 
Shuggart  v.   Lycoming  Ins.  Co.  (55 

Cal.  408)  2.35 

Shumway  v.  Reed  (34  Me   560)  483 

Siiurlds  v.  Tilson  (2  McLean  458)  406 
Shute  V.  Taylor  (5  Met.  67)  225 

Sibley  v.  Lambert  (30  Me.  2-53)  161 

V.  Parsons  (53  N.  W.  786)  404 

V.  Young  (26  S.  C.  415,  2  S.  E. 

314)  150,  151 

Sickman  v.  Abernathy  (14  Col.   174, 

23  Pac  447)  332 

Siddall,  In  re  (29  Ch.  D.  1)  557,  560,  561 
Siegel  V.  Chidsey  (28  Pa.  287)  88,  46.3,  464 
Siegfried  v.  Ludwig  (102  Pa.  547)  108,  378 
Sieghortner  v.  Weissenborn  (20  N.J 

Eq.  172)  248 

Siffkin  V.  Walker  (2  Camp  307)  181,  316 
Sigler  V.  Bank  (8  Oh.  St.  511)  332 

V.  Piatt  (16  Mich.  206)  160 

Sigourney  v  Drury  (14  Pick.  387)         159 

V.  Munn  (7  Conn  11)     350,  436,  443, 

531 
Sikes  V.  Work  (6  Gray  433)  261,  265 


TABLE    OF   CASES. 


Ixix 


Silk  V.  Osborn  (1  Esp.  140) 

V.  Prime  (2  L.  Cas.  Eq.  318) 

Sillitoe,  E.r  parte  (1  Glyn  &  J  374) 

49(5,  407, 
Silver  v.  St.  Louis,  I.  M.  &  S.  liy.  (72 

Mo.  194) 
Silverman  v.  Chase  (90  111.  37)     168, 

Simiiions  v.  Curtis  (41  Me.  373) 

o.  Leonard  (3  Hare  581)         443, 

V.  Swaine  (1  Taunt.  540) 

Kimms  v.  Brutton  (5  Ex.  802) 

V.  Kirtley  (1  T.  B.  Mon.  80) 

Simonds  v.  Strong  (24  Vt.  042) 
Simpson,  Ex  jiarte  (2  Rose  338) 

, (Mont.  &  Cii.  (i()2) 

,  In  re  (L.  II.  0  Cli.  572) 

V.  Bloss  (1  Taunt.  240) 

V.  Feltz  (1  McC.  Ch.  21.3)  55,  439, 

/•.  (iediles  (2  Bay  538) 

,j.  llowden  (3  My.  &  C.  07) 

V.  Leach  (80  111.  280) 

V.  Tenney  (41  Kas.  501,  21  Pac. 

634) 
Sims  V.  Bond  (5  B.  &  Ad   380)      273, 

i\  Brittain  (4  B  &  Ad.  375) 

V.  Brutton  (1  E.  &  B.  446) 

V.  Smith  (12  Rich.  L  085) 

V.  Willing  (8  S.  &  R.  103) 

Simson  v.  Cook  (l  Bii'g.  452) 
V.  Ingiiam  (2  B.  &  C.  05) 


315, 
420, 
423, 
Sindelare  v.  Walker  (137  111.  43,  27 

N.  E.  59) 
Singer  v.  Carpenter  (125  111.  117,  17 
N.  E.  701)  230, 

V.  Kelly  (44  Pa.  145)  540, 

V.  Townsend  (53  Wis.  120) 

Sitler  V.  Walker  (1  Freem  Ch.  77) 

Skaife  v.  Jackson  (3  B.  &  C.  421) 
Skiffkiu  V.  Walker  (2  Camp.  308) 
Skillings  v.  Coolidge  (14  Mass  43) 
Skinner  (;.  Dayton  (19  Johns.  513) 

151.  154,  371,  390,  508,  552, 

V. (5  Johns.  Ch.  351)      151, 

V.  Shannon  (44  Mich.  86,  6  N.  W. 

108) 

V.  Stocks  (4  B.  &  Aid.  437)  272, 

317,  318, 

V.  Tinker  (34  Barb.  333) 

Skip  V.  Harwood  (1  Dick.  114) 

V. (2  Swanst.  586)  137,  290, 

Skipworth  v.  Lea  (16  La.  Ann.  247) 
Skirving  v.  Williams  (24  Beav.  275) 
Slater,  Ex  parte  (6   Ves.  140)     143, 

V.  Arnett  (81  Va.  432) 

V.  Lawson  (1  B.  &  Ad.  396)  157, 

Slaughter  v.  Doe  (07  Ala.  494) 

Slee  V.  Bloom  (20  Johns.  069,  5  Johns. 

Ch.  360) 
Sleech's  Case  (1  Mer.  530)     445,  470, 
Sleraraer's  Appeal  (58  Pa.  168) 


441 
440 
474, 

499 

512 
429, 
445 
135 
531 
402 
117 
520 
400 
480 
494 
442 
9 
524 
102 
289 
302 

50 
317 
317 
82 
87 
54 
425 
421, 
425 

308 

231 
542 
345 

291. 
344 
170 
89 
148 

150, 
553 
154 

335 
310, 
408 
392 
301 
391, 
392 
434 
453 
144, 
485 
508 
448 
351 

511 

482 
457 


Slipper  V.  Stidstone  (1  Esp.  47,  5  T. 

R  493)  437 

Sloan  V.  Machine  Co   (70  Mo.  206)        146 

V.  Moor?  (37  Pa.  217)  294 

Slocomb  V.  Lizard i  (21  La.  Ann.  355)  187 
Slocum  V   Hooker  (13  Barb.  530)  22 

Sloo  c.  Bank  of  Illinois  (2  111.  441)      150, 

155,  156 
Small  V.  Arwood  (Younge  456)  322 

V.  Fitzwilliams  (Prec.  Ch.  102)      224 

Smith,  Ex  parte   (3  Madd.  63,  Buck 


149) 


226,  403 

463,  404 

472 

485 
487 
488 


(5  Ves.  295) 

, (Buck  492) 

, (3  Bro.  C.  C.  46) 

, (1  P.  Wms.  237) 

, (1  Deac  3«5) 

, (lGlvn&J.74,6Madd.2)   489, 

491,  498 

, (2  Sim.  357)  495 

, (16  Joims.  102)     200,  324,  325, 

343,  475 

V.  Abbott  (5  Abb.  N.  C  274)        243 

V.  Allen  (18  Johns.  245)  248 

V.  Anderson  (15  Ch.  D.  247)        557, 

558,  500,  561 

V.  Argall  (6  Hill  479,  3  Den. 

435)  638,  545,  547 

V.  Ayer  (101  U.  S.  320)  451 

V.  Ayrault  (71  Mich  475,  39  N. 

W.  724)  ,   126 

V.  Baily  (11  Mod.  401)    142,  168,  183 

V.  Barker  (10  .Me.  458)  325 

V.  Barrow  (2  T,  R.  476)  250,  256,  259 

I'.  Black  (9  S.  &  R.  142)  76,  93 

c.  Burnham  (3  Sumn.  435)    6,  35,  76 

V.  Chandos  (Barn.  Ch.  419)  211 

V.  Clay  (3  Bro   C.  C.  639)  514 

r.  Coleman  (7  Jur.  1053)  82,  175 

V.  Collins  (115  xMass.  388)  34,  87,  95. 

105 

r.  Craven  (1  Cr.  &  J.  500)        89,  103 

>-.  Cummings  (2  Pars.  Cas.  92)      202 

r.  De  Silva  (Cowp.  409)  136,  403,  501 

V.  Danvers  (5  Sandf.  669)  301 

V.  Edwards  (2  H.  &  G.  411)  48 

V. (7  Humph.  100)  328,338 

V.  Emerson  (43  Pa.  466)  337 

V.  Everett  (27  Beav.  446)       237,  238 

V. (126  Mass.  304)  305 

V.  Fromont  (2  Swanst.  330")  284 

('.  Goldsworthy  (4  Q.  B.  430)         551 

V.  Griffith  (3  Hill  3-33)  08 

V.  Hall  (5  Bosw.  319)  118 

V.  Harris  (76  Ind.  104)  335 

V.  Hill  (13  Ark   173)  35 

V.  Hull  Glass  Co.  (19  L.  J.  C.  P. 

123)  551,  553 

0.  Jackson  (2  Edw.  Ch.  28)    325.  302 

V.  Jameson  (6  T.  R.  001)      123,  200, 

385,  420 

I'.  Jarves  (2  Ld.  Ravm   1484)         168 

V.  Jeyes  (4  Beav.  503)    208,  293,  295. 

371,  456,  457 
V.  Johnson  (2  Edw.  28)  327 


Ixx 


TABLE    OF    CASES. 


Smith  V.  Jones  (12  Mc.  332)       35,  76,  349 

V. (18  Neb.  481,  25  N.   W. 

624)  352, 366 

V.  Kane  (2  Paige  303)  47!) 

V.  Kerr  (3  N.  Y.  144)  151 

i".  Knight  (71  III.  148)  46 

V.  Lowe  (1  Etlw.  Ch.  33)  296 

V.  Ludlow  (6  Johns.  257)  159 

V.  Lusher  (5  Cow.  688)    80,  168,  180, 

206,  246 

f.  Mallory  (24  Ala.  628)  446 

V.  Mayo  (9  Mass.  62)  16,  19 

V.  Moynahan  (44  Cal.  53)  57 

V.  Oriell  (1  East  368)     304,  391,  464, 

466, 471 

V.  Perry  (5  Dutch.  74) 

V.  Rogers  (17  Johns.  340) 


V.  Shelden  (35  Mich.  42) 

V.  Sherwood  (10  Jur.  214) 

V.  Sinnott   (44  La.   Aun.   51 

So.  413) 

V.  Sloan  (37  Wis  285) 

(;.  Smith  (5  Ves.  189) 


60 

96,  418, 

482 

328,  381 

108 

10 

851 

82 

226,  353 


(80  Cal.  323,  21  Pac.  4, 22 


368 
248 
74,  107,  483 
468 
332 
304,  391,  463, 


Pac.  186,  549) 

I'.  (33  Mo.  557) 

r.  (27  N.  H.  244) 

V. (2  Johns.  235) 

V. (50  N.  W.  64) 

V.  Stokes  (1  East  363) 

464,  465,  466,  475 

V.  Stone  (4  Gill  &  J.  310)       152,  307 

V.  Snmmerhn  (48  Ga.  425)  53 

V.  Tarlton  (2  Barb.  Ch.  336)  6,  7 

V.  Tupper  (4  Sm.  &  M.  261)  150,  156 

V.  Tustin  (5  Cow.  688)  308 

V.  Vanderburi:  (46  111.  34)  57,  81 

IK  Walker   (-57  Mich.  456,  24  N. 

W.  830,  26  N.  W.  783)  244 

V.  Warden  (86  Mo.  382)  537 

V.  Watson  (2  B.  &  C.  401)        60,  492 

V.  Wigley  (3  Moo.  &  S.  174)  423,  425 

V.  Winter  (4  M.  &  W.  454)    151,  376, 

382 

v.  Wright  (5  Sandf.  113)  56 

v.    (4  Abb    App.  274)  57 

Smitha  r.  Cnreton  (31  Ala  652)  164 

Smout  V.  Ilberv  (10  M.  &  W.  1)  387 

/•.  Harrie  (31  111.  62)  385 

Smyth  V.  Hawthorn  (3  Rawle  355)        443 

V.  Smyth  (1  Swanst.  2-52)  292 

V.  Strader  (4  How.  404)  180 

V.  Tankerslev  (20  Ala  212)  303 

Snaith  >:  Burridge  (4  Taunt.  684)    96,  97, 

120,  133 
Snead  t:  Baringer  (1  Stew.  134)  91 
Sneed  i-.  Cogle^(4  Lift.  162)  181 
V.  Deaf  (53  Ark.  152,  13   S.  W. 

703)  204 

V.  Wiester  (2  A.  K.  Marsh.  277)  420, 

423 
Snell  V.  Crowe  (3  Utah  26,  5  Pac.  522)  344 

c.  D wight  (120  Mass.  9)  8,  9 

Sniffer  v.  Sass  (14  Rich.  L.  20)  478 


Snodgrass  v.  Broadwell  (2  Litt.  353)     312 

IV  Reynolds  (79  Ala  452)  12 

Snodgrass's  Appeal  (13  Pa.  471)  331 

Snow  V.  Howard  (35  Barb.  55)  183 

Snowball,  Ex  parte  (L.  R.  7  Ch.  5-34)  332 
Snyder  v.  Burnhani  (77  Mo.  52)  34 

V.  May  (19  I'a.  235)  150 

Sodiker  /•.  Applegate  (24  W.  Va.  411)     60 
Solomon  r.  Kirkwood    (55  Mich.  256, 
21  N.  W.  336)  393 

V.  Solomon  (2  Ga.  18)       87,  194,  211 

Solly  r.  Forbes  (4  Moore  448,  2  Br.  & 

B.  38)  144,  316 
Somerhy  v.  Buntin   (118  Mass.  279)  7,  67, 

280 
SomerviUe  r.  Mackay  (16  Ves.  382)     217, 

279' 
Soper  V.  Fry  (37  Mich.  236)  155 

Soule  (-•.  Havward  (1  Cal.  345)  58 

Soules  V.  Burton  (36  Vt.  6-52)  198 

Southard  v.  Steele  (3  T.  B.  Mon.  435)  149 
South  Carolina  Bank  v.  Case  (8  B.  & 

C.  427)  113,  114,  168,  181,  206 
V.  Humphreys  (1  McC.  388)         381, 

413 
Southern  Cotton  Oil  Co.  i\  Henshaw 

(89  Ala.  448,  7  So.  760)  351,  363 

Southern  Fertilizer  Co.  r.  Reams  (105 

N.  C.  283,  11  S.  E.  467)  61 

Southmayd's  Appeal  (8  Atl.  72)  212 

Southwick  r.  McGoyern  (28  la.  533)  69 
Spalding  v.  Hedges  (2  Barr  240)  102 

V.  Wilson  (80  Kv.  589)  851 

Sparhawk  v.  Russell  (10  Met.  305)  446 
Sparman  v.  Keim  (83  Ky.  245)  17 

Sparrow  v.  Chisman  (9  B  &  C.  241)    145, 

179 
Spaulding   v.   Ludlow  Mills   (36  Vt. 

150)  95,161,402 

Speake  v.  Prewitt  (6  Tex.  252)  273,  312 
Spear  v   Gillet  (1  Dev.  Eq.  466)  93 

1-.  Newell  (13  Vt.  288)     250,  263,  264 

Spears  v.  Toland  (1  A.  K  Marsh.  203)  163 
Speer  r.  Bishop  (24  Oh  St.  598)  103,  387 
Speights  V.  Peters  (9  Gill  472)  295,  297 
Spencer  v.  Billing  (3  Camp.  310)    105,  492 

V.  Durant  (Comb  115)  216,  257 

Spenceley   c.  Greenwood  (1  F.  &  F. 

297)  88T 

Sperry,  I»  re  (1  Ashm.  347)  327,  33(i 

Spicer  v.  James  (Coll.  Part   164)  241 

Spiers  v.  Houston  (4  Bligh  x.  s.  515)  31fi 
Spiro  r.  Paxton  (3  Lea  75)  351 

Sprague,  Ex  parte  (4  De  G.  M.  &  G. 

866)  494 

V.  Ainsworth  (40  Vt.  47)  181 

Springer  r.  Cabell  (10  Mo.  640)  248 

V.  Foster  (10  Met.  597)  468 

Spurr  V.  Cass  (L.  R.  5  Q.  B.  6-56)  109 

Staats  V.  Bristow  (73  N.  Y.  264)  344 

V.  Howlett  (4  Den.  559)        183,  240, 

243 
Stables  v.  Eley  (1  C.  &  P.  614)  407 

Stackpole  v.  Davoren  (1  Bro.  P.  C.9)  514 
Stacy  V.  Decey  (2  Esp.  169)  317 


TABLE   OF    CASES. 


Ixxi 


Stafford   Nat    Bank    v.    Palmer   (47 

(.'on II.  44.'-J) 
Stair  u.  Uichanlsoii  (108  Ind.  429,9 

N.  E.  300) 
Stall  <;.  Catskill  Hank  (18  Wend.4G6) 

Stanliope   v.  Swaffurd    (80  la.  45,  45 

N.  VV.  40:i) 
Staiinanl  r.  VVIiittlesey  (9  Conn.  556) 
StansfiL'ld  (•    Levy  (o  Stark.  8) 
Stanton  ".  i5iic-kner  (24  La.  Ann.  301) 
V.  Westover  (101  N.  Y.  265,  4  N. 

E.  52;))  231,  331, 

Stanton    Iron   Works   Co.,   In   re   (21 

13eav.  164) 
Stanwood  r.  Owen  (14  Gray  105) 
Sta[)ilton  r.  Stapilton  (1  Atk.  10) 
Staples  V.  Sprague  (75  Me.  458)      59, 
Star    Wajron   Co.  ;,'.   Swezey   (52  la. 

;W1,  3  X.  \V.  421) 
Stark  r.  'I'aylor  (4  McC.  413) 
Starnes  /••  (^iiin  (G  Ga.  84) 
State  ('.  Biernian  (1  Strobli.  256) 

r.  Rowden  (18  Fla   17)  231, 

/'.  (\atskill  Bank  (18  Wend.  480) 

r.  i)av  (29  X.  E.  430) 

-■.  Enunons  (99  Ind.  452) 

/•.  Kenan  (94  N   C.  296) 

/'.  Liiiaweaver  (3  Head  51) 

r.  Xeal  (27  N.  H.  131) 

IV    Xebraska    Distilling   Co.    (29 

Nel).  701),  46  N.  W.  155)       559,  565, 

r.  Spencer  (64  Mo.  355) 

V.  Standard  Oil  Co.  (30  N.E.  279) 

564,  565, 
State  Capital  Bank  v.  Noyes  (62  N  H. 

35) 
Stead  y.  Salt  (3  Ring,  101)     147,  148, 
Stearns  v.  Barrett  (1   Pick.  443) 

V.  Burnliani  (4  Me.  84)  172, 

V.  Haven  (14  Vt.  540)       77,  103, 

r. (16  Vt.  87) 

.  Hongiiton  (38  Vt.  583) 

Siebbins,  Ex  parte  (R.  M.  Charlt.  77) 
Steel  r.  Jennings  (Ciieves  183)      142, 

r.  Western  (7  J    B.  Moo.  31) 

Steele  l\  Jennings  (1  McMull.  297) 

r.  Stuart  (L.  K.  2  Eq.  84)         70, 

Steers  v.  Lashlev  (6   !'.  R.  61) 
Stegall  r.  Coney  (49  .Miss    761) 
Steiglitz  r.  Eg^niirton  (Holt  141) 
Stein  V.  La  Dow  (13  Minn.  412) 
V.  Robertson  (30  Ala  286) 


134, 
214, 


50 

108 
180, 
184 

125 

507 

272 
248 

335 

65 
387 
511 
192 

168 
23 
303 
117 
335 
174 
335 
344 
335 
118 
117 

566 
335 
559, 
566 

83 
152 
401 
173 
107 

60 
171 
327 
143 
273 
160 
118 
9 

97 
150 
135 
234. 


Steinhart  i>.  Fyhrie  (5  Mont.  463,  6 

Pac.  367)  135 

Stephens  v.  Orman  (10  Fla  9)       195,  513 

V.  Revnolds  (2  F  &  F.  147)  170 

/•.  Thompson  (28  Vt.  77)        416,  417 

Sterlinsi  /•.  Bock  (40  Minn.  11,  41  N. 
W.  236)  151,  153 

r.  Jandon  (48  Barb.  459)  87 

Sternburg  v.  Callanan  (14  la.  251)         99, 

427 
Sterndale  v.  Hankinson  (1  Sim.  393)    425 


Sterry  v.  Clifton  (9  C.  B   110)  15,  36 

Steuart  v.  Gladstone  (10  Ch.  D.  628)    569 
Steuben    Countv    Bank   v.    Alberger 

(101  N.  Y.  202)  168 

Stevens  v.  Hennnig  (1  K.  &  J.  108,  6 

De  G.  M.  &  G.  223)  315 

V.  Faucet  (24  111,  483)  46,  60 

V.  Gainesville  Nat.  Bank  (62  Tex. 

499)  46 

(,-.  Lunt  (19  Me.  70)  312,316 

r.  Morse  (7  Me  36)  384 

u.  Perry  (113  Mass.  380)  336 

('.  Yeatnian  (19  Md  480)  384 

Stevenson  /;   Mailiers  (67  111.  123)         508 
Steward  r.    Blakeway    (L.  R.  4  Ch. 

60!)  352 

/•. ( L.  R.  6  Eq.  479)  358 

Stewart,  In  re  (62  la.  614,  17  N.  W. 

897) 

V.  Brown  (37  N.  Y.  350) 

V.  Forbes  (1  McN.  &  G.  137) 


98 
491 
233, 
234 
119 
9 


V.  Levy  (36  Cal.  159)  117 

V.  Mcintosh  (4  H   &  J.  233) 

V.  Robinson   (115  N.  Y.  328,22 

N.  E.  160)  451 

i:  Rogers  (19  Md.  98)  428 

Stewart's  Appeal  (105  Pa.  307)  160 

Stileman  i\  Ashdown  (2  Atk.  480)  514 
Still  V.  Focke  (66  Tex.  715,  2  S.  W.  59)  231 
Stillman  c.  Harvey  (47  Conn.  20)  139 

Stiinson  /•.  Lewis  (.36  Vt.  91)  554 

V.  Whitney  (130  Mass.  591)   169,  403 

Stirling  r.  Heintzraan  (42  Mich.  449, 

4  N.  W.  165)  1,  115 

Stirrup's  Case  (6  Ves.  743)  474,  496,  499 
Sioal lings  v.  Baker  (15  Mo.  481)  53 

Stockdale  v.  Ullery  (37  Pa.  486)  171 

Stocken  r.  Dawson  (6  Beav.  371)  201,  439, 

448 
Stocker  v.  Brocklebank  (3  McN.  & 

G.  250)  60 

Stockton  V.  Frey  (4  Gill  406)  124,  125 
Stockwell  v.  Dillingham  (50  Me.  442)  87 
Stoddard  Mfg.  Co.  v.  Krause  (27  Neb. 

83,  42  N.  W.  913)  404,  405 

Stokes  r.  Brown  (4  Chand.  39)  20 

Stone,  Ex  parte  (L.  R.  8  Ch.  914)  282 

V.  Chamberlin  (20  Ga.  259)    94,  381 

V   Dennis  (3  Port.  231)  220 

V.  Fouse  (3  Cal.  294)  454,  507 

V.  Marsh  (6  B.  &  C  551)  121 

V. (R.  &  .M.  304)  121 

r.  Mattinsily  ( 19  S.  W.  402)  248 

V.  Sevmour  (15  Wend   19)  420 

Storer  v  Flack  (41  Barb.  161)  7 

V.  Hinkley  (Kirby  147)  KiO 

V.  Hunter  (3  B.  &  C.  368)  493 

Storrs  V.  Birker  (6  Johns.  Ch.  166)  492 
Story  V.  Livingstone  (13  Pet.  359)        469 

('.  Moon  (8  Dana  331 )  456 

V   Winsor  (2  Atk.  6-30)  34 

Stouffer  V.  Coleman  (1  Yeates  390)  465 
Stoughtou   V.   Lynch  (1   Johns.    Cii. 

467)  194, 443 


Ixxii 


TABLE   OF   CASES. 


Stougliton   V.   Lynch   (2  Johns.   Ch. 

209)  215,  511,  515,  516,  52U,  522 

Stout  V.  Baker  (o2   Kas.  llo,  4   Pac. 

141)  334 
V.   Ennis   Nat.    Bank    (09   Tex. 

384,  8  S.  \V.  808)  143,  152 

V.  P^ortnne  (7  la.  183)     327,  328,  338 

V.  McNeill  (98  N.  C.  1,  3  S.  E. 

915)  335 
V.  Zulick  (48  N.  J.  599,  7  Atl. 

362)  50 

Stoveld,  Er  parte  (1  Glvn  &  J.  303)       298 

V.  Eade  (4  Bing.  154)  424 

Strain  ?'.  Wright  (7  Ga.  568)  17 

Strang  v.  Bradner  (114  U.  S.  555)  124 
Stranae  r.  Lee  (3  East  484)  315 

Strangford  r.  Green  (2  Mod.  228)  149 

Straus  V.  Kerngood  (21  Gratt.  584)  335 
Strauss  v.  Frederick  (91  N.  C.  121)  437 
Strecker  v.  Conn  (90  Lid.  469)  105,  404 
Street  v.  Rigby  (6  Ves.  815)  220,  462 

Stretch  v.  Talmadge  (65  Cal.  510,  4 

Pac.  513)  512 

Stroller  v.  Elting  (97  N.  Y.  102)  45 

Stroman  v  Varn  (19  S.  C.  807)  151,  3fi7 
Strong  V.  Fish  (13  Vt.  277)  179 

y.  Foster  (17  C.  B.  201)  417 

V.  Lord  (107  111.  25)  359,  363 

V.  Smith  (62  Conn.  39,  25  Atl. 

395)  69 
V.  Stapp   (74  Cal.  280,   15  Pac. 

835)  393 

Stroud,  Ex  parte  (2  Glyn  &  J.  127)  474, 499 
Struthers  v.  Pearce  (51  N.  Y.  357)       196, 

204 
Stuart  V.  Adams  (89  Cal.  367,  26  Pac. 

970)  34 

17.  Coming  (32  Conn.  105)  333 

Studdy  V.  Sanders  (2  D.  &  R   347)  69 

Stuniph  V.  Bauer  (76  Ind  1-57)  56,  343 
Styles  V.  Cowper  (3  Atk  692)  492 

Suau  V.  Caffe  (122  N,  Y.  308,  25  N.  E. 

488)  24 
Sullivan  v.  Greaves  (Park  Ins.  8)  9,  269 
V.  Smith  (15  Neb.  476,  19  N.  W. 

620)  367, 368 
V.  Sullivan  Mfg.   Co.  (20  S.  C. 

79)  51 

Summerlot  v   Hamilton  (121  Ind.  87, 

22  N.  E.  973)  139 

Sumner  v.  Hampson  (8  Ohio  358)        137, 

361,  304,  366,  500 

?•.  Powell  (2  Mer.  37)  330 

Sutcliffe  V.  Dohrman  (18  Ohio  181)  325 
Sutro  r.  Wagner  (23  N.  J.  Eq  388,  24 

N.  J.  Eq,  .5^9)  293 

Sutton  v.  Clark  (6  Taunt.  29)  125 

V.  Gregory  (2  Peake  150)      168,  180 

V.  Irwine  (12  S  &  R.  13)         185, 186 

Suydam  v.  Barber  (6  Duer  34)  92 

V.  Owen  (14  Grav  195)  435 

Swan  V.  Stedman  (4  Met.  548)  151 

V.  Steele  (7  East  210)        70,  73, 106, 

131.  142.  1-52.  168,  171 
Swasey  v.  Antram  (24  Oh.  St.  87)         24 


Swascy  v.  Vanderheyden  (10  Johns. 

33)  16 

Swearingen  v.  Bassett  (65  Tex.  267)  351 
Sweeney  v.  Neeley  (53  Mich.  421,  19 

N.  W.  127)  526 

Sweet  V.  Bradley  (24  Barb   549)  lb6 

V.  Jacocks  (6  Paice  355)  503 

V.  Morrison  ( 103  N.  Y.  235,  8  N. 

E.  396)  192 

y.  Read  (12  R.I.  121)  345 

Sweotser  v.  French  (2  Cush.  309)  184, 185 
Sweetzer  v.  Mead  (5  Mich.  107)  133, 153 
Swift  V.  Ward  (80  la.  700,  45  N.  W. 

1044)  217,  392,  393,  529,  530 

Syers  v.  Syers  (1  App.  Cas.  174)  56 

Svkes  v.  Beadon  (11  Ch.  D.  170)  8,  9 

Sylvester  v.  Smith  (9  Mass.  121)  88,  272 
Symonds  v.  Carter  (32  N.  H.  458)         322 


Taber  v.  Cannon  (8  Met.  456)  111 

Tabler  v.  Brvant  (62  Miss.  350)  333 

Taft  V.  Buffum  (14  Pick.  322)  392 

V.  Sergeant  (18  Barb,  320)         17,  18 

V.  Ward  (111  Mass.  518)  550 

V. (106  Mass.  518)  550 

Taggard  v.  Loring  (16  Mass.  336)  63 

Tait  V.  Murphv  (80  Ala.  440.  2  So. 

317)  '  ■      231,  344 

Taitt,  Et  parte  (16  Ves.  198)  479,  480 
Tallmadffe  v.  Penover  (35  Barb.  120)  177 
Tanis  V.  Hetner  (9Va.441)  111 

Tanner  v.  Hall  (1  Barr  417)     97, 184,  187 
Tanner   &    Delaney    Engine    Co.    ?'. 
Hall  (86  Ala.  305,  5  So.  584)       68,  104, 

108 

Tapley  v.  Butterfield  (1  Met.  515)        131, 

133,  134,  142,  153,  367 

Tappan  v.  Bailev  (4  Met.  535)  553 

V.  Blaisdeil  (5  N.  H.  190)      325,  338, 

345, 446 
159,  160 
468 
50 
368 
163 
270 
555 

236 


V.  Kimball  (30  N.  H.  136) 

V.  Poor  (15  Ma.'is.  419) 

Tarbell  r.  Page  (24  111.46) 

V.  West  (86  N.  Y  280) 

Tassey  v.  Church  (4  W.  &  S.  141) 

V.  (5  W.  &  S.  468) 

Tatani  v.  Williams  (3  Hare  347) 
Tate   V.    Citizens'  Ins.  Co.  (13  Gray 

79) 

V.  Clements  (16  Fla.  339)       159,  160 

V.  Mut.  Ins.  Co.  (13  Gray  79)        311, 

312 
Tatlock  V.  Harris  (3  T.  R.  180)  386 

Tattersall  v.  Groote  (2  B.  &  P.  131)       11, 
220,  276,  454 
Tav  V.  Ladd  (15  Gray  296)  333 

Ta'yloe  i\  Bush  (75  Ala.  432)       46,  47,  60 

V.  Sandiford  (7  Wheat.  14)  420 

Taylor,  Ex  parte  (8  De  G.  M.  &  G. 

254)  17 

, (2  Rose  175)  472,  409 

, (18  Ves.  284)  480 


TABLE   OF   CASES. 


Ixxiii 


Tavlor,  Ex  parte  {'S\r,r\t.  240)  494 

— '-,  In  re  (5  Biss.  UU)  544 

0.  Beniis  (4  Biss.  40(3)  244,  531 

0.  Carpenter  (2  W.  &  M.  1,  11 

Paige  292, 2  Saridf.  Cli.  GO:},  3  Story 

458)  244 

V.  Castle  (42  Cal.  367)  432,  556 

V.  Cliurcii  (8  N.  Y.  452,  1  E.  D. 

Smith  470)  820,321,322 

V.  Cornell  (12  S.  &  R.  243)     145,  149 

V.  Davis  (3  Beav.  388)  457 

V.  Field  (15  Ves.  550)  290,  503 

V.  Fields  (4  Ves.  300)     136,  290,  344, 

430,  475,  503 

V.  Glassbrook  (3  Stark.  76)  15 

V.  Hamlin  (2  Bro.  C.  C.  310)         515 

V.  Hayling  (1  (>)x  435)  515 

V.  Henderson  (17  S.  &  K.  453)  69,  107 

V.  Herring  ( 10  Bosw.  447)  65 

V.  Higgings  (3  East  16'.))  269 

V.  UiUyer  (3  Blackf.  43.3)  162, 172, 173 

V.  Hutciiinson  (25  Gratt.  536)        524 

I'.  Jones  (2  Atk.  602)  514 

V. (42  N.  H.  25)  117 

V.  Kymer  (3  B.  &  Ad.  320)     424,  425 

V.  Neate  (39  Cli.  I).  538)  237 

V.  Perkins  (26  Wend.  124)  48 

I'.  Ragland  (42  La.  Ann.  120,  8 

So.  467)  201,  202 

>\  Tavlor  (2  Murph.  70)  234 

V.  TeVme  (3  H.  &  J.  505)  46 

r.  Wilson  (58  N.  H.  465)  116 

V  Young  (3  Watts  339)  406 

Taylor's  Case  (1  Browne  73)  150 

Teague  v.  Hubbard  (8  B.  &  C.  345)     246, 

255,  553 

r. (1  M.  &R.  369)  553 

Tebbetts  v.  Dearborn  (74  Me.  392)  204 
Teed  v.  Elwortliy  (12  East  210)  22 

V. (14  East  210)  109 

Teller  v.  jNIuir  (2  Penn.  548)  164 

Temperton  v.  Russell  (37  Sol.  Jour. 

423)  236 

Temple  v.  Seaver  (11  Cush.  314)  308,  380 
Tenant  v.  Elliott  (1  B.  &  P.  3)  269 

Tench  v.  Roberts  (6  Madd.  145)  55 

Tennant,  E.r  parte  (6  Cli.  I).  303)  61 

Tennessee,  Bank  of,  v.  Saffarans  (3 

Humph.  597)  174,  184 

Tenney  v.  Johnson  (43  N.  H.  144)        476 

V.  N.  E.  Protect.  Union  (37  Vt.  64)  550 

Terrell  v.  Goddard  (18  Ga.  664)     297,  384 

V.  Hurst  (76  Ala.  588)  146 

V.  Pichards  (N.  &  McC.  20)      6,  257 

V.  RowIand(86Ky.67,4S.W.825)  201 

Terry  v.  Butler  (43  Barb.  395)  477 

V.  Carter  (25  Miss.  168)  259 

Tevis  V.  Tevis  (24  Mo.  535)  186,  187 

Te.xas  &  St.  L.  R.  R.  v.  McCaughey 

(62Te.x.  271)  334 

Texiere  v.  Da  Costa  (Coll.  Part.  354)  295 
Thatcher  v.  Massey  (20  S.  C.  542)  203 
Thayer  v.  Augustine  (55  Mich.  187, 

20  N.  W.  898)  62 
V.  Buffum  (11  Met.  398)         246,  308 


Thayer  r.  Lane  (Walk.  Cli.  200)  362,  364 

r.  Smith  (116  Mass.  363)  172 

Theller  v.  Such  (57  Cal.  447)  438,  439 
Tliicknesse  v.  Bromilow  (2  Cr.  &  J. 

425)  142,  143,  169 

Thimblethorp   v.  Hardesty    (7   Mod. 

116)  216,257 

Thom  V.  Smith  (21  Wend.  365)  89 

Thomas,  Ex  jnirte  (3  Mont.  D.  &  D. 

40,  2  id.  544)  494 

,  In  re  (17  N.  B.  R.  54,  8  Biss.  139)  182, 

481 

V.  Atherton  (10  Ch.  D.  185)  148,  523 

t:  Elmaker  (1  Pars.  Cas.  108)        553 

V.  Fredericks  (10  Q   B.  775)  220 

V.  Harding  (8  Me.  417)  147 

V.  Litchfield  (Coll.  Part.  287)         276 

V.  Pennrich  (28  Oh.  St.  55)  87 

r.  Pyke  (4  Bibb  418)  257 

V.  Shillibeer  (1  M.  &  W.  124)  95,  387, 

415 
V.  Stetson  (62  la.  537,  17  N.  W. 

751)  98 

Thomason  v.  Frere  (10  East  418)  149,  463, 

467,  469 
Thomasson  v.  Boyd  (13  Ala.  419)  18 

Thompson  v.  Andrews   (1   M.  &  K. 

116)  451 

V.  Bowman  (6  Wall.  316)        162, 353, 

367 

V.  Brown  (M.  &  M.  40)  423 

V. (4  Johns.  Ch.  619)  452,  453, 503 

V.  Charnock  (8  T.  R.  139)      219,  220 

y.  First  Nat.   Bank  (111   U.   S. 

529)  104 

V.  Frist  (15  Md.  24)  344 

V.  Graham  (1  Paige  384)  289 

V.  Howard  (2  Ind.  245)  35,  82 

V.  J.  D.  Morton,  The  (2  Oh.  St. 

26)  271 

V.  Ketcham  (8  Johns.  189)  310 

V.  Lay  (4  Esp.  48)  19 

V.  Lewis  (34  Me.  167)  344,  345 

V.  Lowe  (HI  Ind.  272,  12  N.  E. 

476)  136,  247 

V.  Percival  (5  B.  &  Ad.  925)     94,  95, 

387,  416,  419,  4«2,  484,  485 

V.  Ryan  (2  Swanst.  555)         230,  501 

V.  Snow  (4  Me.  264)  63 

V.  Thompson  (7  Ves.  473)  269 

V.  Walker  (40  La.  Ann.  676,  4 

So.  881)  512 
V.  Wesieyan  Newspaper  Associa- 
tion 1 19  L.J.  C.  P.  114)  553 
V.    Williamson    (7    Bligh   N.    s. 

432,  5  W.  &  Sii.  16)  232,  234 

Thomson  v.  Cook  (2  South.  580)  303 

Thorndike  v.  De  Wolf  (6  Pick.  120)     54, 

64,66 
Thornton  v.  Dixon  (3  Bro.  C.  C.  200)  432 

V.  Illingworth  (2  B.  &  C.  824)   16,  22 

V.  Kerr  (6  Ala  823)  107 

V.  Lambeth  (103  N.  C.  86,  9  S. 

E.  432)  90 
V.  Proctor  (1  Anst.  94)          200,  384 


Ixxiv 


TABLE   OF   CASES, 


Thorpe,  Ex  parte  (3  Mont.  &  A.  716)     96, 

99,  175 

V.  Jackson  (2  Y.  &  C  553)   330,  444, 

445 
Thrall  v.  Seward  (37  Vt.  573)  378,  427 
Thropp  V.  Richardson  (132  Pa.  399, 

19  .\tl.  218)  254 

Thrupp  V.  Wilder  (2  Esp.  628)  19 

Thurber  v.  Corbin  (51  Barb.  215)  414 

Thurlow  r.  Gilmore  (40  Me.  378)  18 

Thursby  v.  Lidsrerwood  (09  N.  ¥.198)378 
Tliurston  v.  Lloyd  (4  Md.  283)  171 

Thwaites  v.  Kichardson  (Peake  16)  164 
Thweatt  v.  Jones  (1  Rand.  328)  269 

Tibbatts  v.  Tibbatts  (6  McLean  80)  55,63 
Tickel  V.  Short  (2  Ves.  Sen.  239)  518 

Tidd  V.  Rines  (26  Minn.  201,  2  N.  W. 

497)  351 

Tiemann  r.  MoUiter  (71  Mo.  512)  442 

Tilford  V.  Ramsey  (37  Mo.  563)  87,  113 
Tilge  V.  Brooks  (124  Pa.  178,  10  Atl. 

746)  409,  544 

Till's  Case  (3Neb.  261)  491 

Tillar  v.  Cook  (77  Va.  477)  280,  508 

Tilley  v.  Phelps  (18  Conn.  294)  325 

Tillier  v.  Whitehead   (1  Dall.  269)     146, 

206 

Tillinghast  v.  Champlin  (4  R.  I.  173)  302, 

329,  349,  361,  369 

V.  Gilmore  (22  Atl.  942)  148 

V.  Nourse  (14  Ga.  641)  160 

Tillotson  V.  Tillotson  (34  Conn.  335)   201, 

354,  524 
Tilson  V.  Warwick  Gas  Light  Co.  (4 

B.  &  C.  962)  553 

Timrall  r.  O'Bannon  (7  B.  Mon.  603)  309 
Tindal  v.  Bright  (Minor  103)  246,  307 
Tinkler  v.  Walpole  (14  P:ast  226)  69 

Tipton  V.  Nance  (4  Ala.  194)  311 

Tirrell  v.  Jones  (30  Cal.  655)  202 

Titus  V.  Todd  (25  N.  J.  Eq.  458)  95 

Tobey  v.  McFarlin  (115  Mass.  98)  345 
Tobias  v.  Blin  (21  Vt.  544)  45 

Todd  V.  Jackson  (75  Ind.  272)  121 

V.  Pennington  (21  Atl.  297)  9 

V.  Raffertv  (30  N.  J.  Eq.  254)  9,  198, 

512 
Tolman  r.  Hanrahan  (44  Wis.  133)  111 
Tom  r.  Goodrich  (2  Johns.  213)  91,  150 
Tombeckbee  Bank  ik  Dumell  (5  Mass. 

56)  381,403 

Tomlin  v.  Lawrence  (3  Moo.  &  P.  555)  144, 

145 
Tomlinson  v.  Nelson  (49  Wis.  679)  251 
Tompkins  v.  Tompkins  (18  S.  C.  1)     435, 

522 
r.  Woodford  (5  W.  Va.  216)  170, 186, 

187 
Toof  r.  Brewer  (3  So.  571)  24,  27 

Tooker's  Case  (2  Co.  68)  152 

Topliff  V.  Jackson  (12  Gray  565)  415,  519 
Torrell,  £'.r /-ar/e  (Buck  345)  499 

Torrey  r.  Buck  (1  Green  366)  289 

c.  Twombly  (57  How.  Pr.  149)     248 

Towle  V.  Harrington  (1  Cush.  146)        311 


Towle  V.  Meserve  (38  N.  H.  9) 

Towne  r.  Leach  (32  Vt.  747) 

Townsend  v.  Bogart  (11  Abb.  Pr.  355)  117 

V.  CJoewey  (19  Wend.  424)     252,  262 

V.  Neall  (2  Camp.  190) 

V.  Riddle  (2  N.  H.  448) 

V.  Townsend  (1  Cox  28) 

Townshend,  Kx  parte  (2  Moll.  242) 

t'.  Devaynes  (Mont.  Part.  96) 

Toulmin  v.  Copland  (3  Y.  &  C.  625) 


249 

345 


36 
417 
514 

515 

350 
42.5, 


517,  520,  51: 


96 


177 

206 


344 


Tracy  v.  Pearl  (20  Vt.  162) 
Trader's  Bank  v.  Bradner  (43  Barb. 

379) 
Tradesmen's  Bank  v.  Astor  (11  Wend. 

87) 
Trafford  v.  Hubbard  (15  R.  I.  326,  4 

Atl.  762) 

Trafton  v.  United  States  (3  Storv  648)  92 
Traphagen  v.  Burt  (67  N.  Y.  30")  351 

Travis  v.  Milne  (9  Hare  153)  233 

Tread  well  r.  Brown  (43  N.  H.290)  345,  346 

I'.Williams  (9  Bosw.  049)        139,  368 

Tredwen  v.  Bourne  (6  M.  &  W.  461)  82 
Trentman  v.  Swartzell  (85  Ind.  443)  332 
Trickett  v.   Moore  (34  Kas.   755,  10 

Pac.  147)  345 

Trimble  v.  Coons    (2   A.   K.  Marsh. 

375)  149,150,154 

Troughton  v.  Hunter  (18  Beav.  470)     410, 

456 
Troup  I'.  Haight  (Hopk.  239)  515 

Trowbridge  v.  Cross   (117  111.  109,7 

N.  E.  347)  350 

V.  Cushman  (24  Pick.  310)     182,  345 

V.  Scudder  (11  Cush.  83)  50,  51 

Troy  I.  «&  N.  Factory  v.  Corning  (45 

Barb.  231) 

V.  Winslow  (11  Blatch.  513) 

Trueman,  Ex  parte  (1    Deac.  &  Ch. 

464 

V.  Loder  (11  A.  &  E.  589) 

Truitt  V.  Baird  (12  Kas.  420) 
Trumbo  i'.  Hamel   (29  S.   C.  520, 

S.  E.  83) 

Tubbs  r.  Richardson  (6  Vt.  442)  303,  304 
Tucker  v.  Adams  (63  N.  H.  361)  10 
V.  Cole  (54  Wis.  639,  11  N.  W. 

703) 

V.  Moreland  (10  Pet.  58) 

V.  Oxley  (5  Cranch  35) 

V  Peaslee  (36  N.  H.  167) 

Tuckerman  r.  Newhall  (17  Mass.  581) 
Tudor  r.  White  (27  Tex,  584) 
Tuff,  In  re  (19  Q.  B.  D,  88) 
Tumlin  v.  Goldsmith  (40  Ga.  221) 
Tupper  V.  Haythorne  (Gow  135)  115,  133 
Turbeville  v.  Ryan  (1  Humph.  113)  151 
Turner,  Ex  parte  (4  Deac.  &  Ch.  169)  489 

V.  Bissell  (14  Pick    192)  45 

V.  Burrows  (5  Wend.  541)      318,  319 

V.    Duglass    (77    Tex.    619,   14 

S.  W.  221)      '  135 

V.  Jaycox  (40  N  Y.  470)  182 

V.  Major  (3  GifE.  442)  237 


433 

445 

520 
114 

258 
8 
4,  480 


118 

16 

446 

89 

143 

407 

497 

69 


TABLE   OF   CASES. 


Ixxv 


Turner  v.  Ross  (1  R.  T.  88)  159,  160 

.  Sm.irt  (6  15.  &  C.  603)  157 

r.  Turner  (5  S.  W.  457)  2^3 

Turnipseed  v.  Goodwin  ('J  Ala.  372)     214, 

234,  458 
Turton  r.  Tiirton  (42  Cli.  D.  128)  242 
Tutt  r.  Adams  (24  Mo.  18G)  171,  172 

V.  Laii.l  (50  Ga.  338)  202 

Tuttle  y.  Cooper  (5  Pick.  414)  69,  107 

V. ( 10  Pick.  281)  22,  469 

r.  Kskri(I^;e  (2  Muiif.  230)      150,  152 

Twiss  r.  iMassey  (1  Atk.  07)  491 

Twopenny  r.  Youn^  (3  H  &  C.  208)     310 
Twyt'onl  o.  Trail  (7  Sim.  <J2)  123 

Tyler  v.  Scott  (45  Vt.  261)  58 

Tylor  I'.  Taylor  (8  Barb.  585)        303,  304 
Tynherg   v.   Cohen  (67   Tex.  220,   2 

S.  W.  734)  272 

Tyng  (,.  Thayer  (8  All.  3',)1)  507,  522 

Tyree  v.  Lyon  (07  Ala.  1)  99 

Tyrrell  v.  \Vaslii)urn  (6  All.  466)  553 

Tyson  v.  Pollock  ( 1  Barr  375)  143 


u. 


Uhl  V.  Bingaman  (78  Ind.  365)  404 

r.  Harvey  (78  Ind.  26)  405 

Uliler  V.  Browning  (4  Dutcli.  79)  172 

r.  Semi)le  (20  N.  J.  Eq.  288)  362 

Ulery  r.  Ginrick  (57  111.  531)  82 

Ullman  v.  Myrick  (93  Ala.  532,  8  So. 

410)  134 

Uimer  v.  Cunningham  (2  Me.  118)        317 
Union   Bank   v.  Bank  of  (Commerce 

(94  III   271)  475,476,487 

V.  Day  (12  Heisk,  413)  89 

r.  Eaton  (5  Humpli.  499)  89,  170 

V.  Hall  (1  Harp.  245)  376,  377 

V.  Knapp  (3  Pick.  113)  514 

r.   Underhill  (102   N.  Y.  336,  7 

N.  E. 293)  98,  99 

United  Ins.  Co.  i'.  Scott  (1  Johns.  106) 

54,  57,  65 
U.  S    V.  Astley  (3  Wash.  C.  C.  508) 

91,  150,  152 

I'.  Bainbridge  (1  Mas.  71)  16 

V.  Bradbury^  (2  Ware  146)  425 

i:  Cuslniian  (2  Sumn.  437)         76,  92 

V.  Hack  (8  Pet.  275)  325 

'•.  Jellico  Mt.  Coal  &  Coke  Co. 

(46  F.  R.  432) 
V.  Kirkpatrick  (9  Wheat.  737) 


568 
421, 
425 
V.  Lyman  (1  Mas.  505)  91 

V.  Thoniasson  (4  Biss.  99)      119,  124 

V.  Thompson  (Gilp.  614)  143 

V.     Trans.     Missouri     Freight 

Assoc.  (53  F.  K.  440)  560,  566,  568 

V.  iJnion  Pacific  R.  R.  (98  U.  S. 

569)  558 

V.  Ward  well  (5  Mas   82)  425 

U.  S.  Bank  r.  Binney  (5  Mas.  176)         29, 

36.  114,  212,394,443,  520 

V.  Davis  (2  Hill  264)  413 


U.  S.  Express  Co.  v.  Bedbury  (34  111. 

459)  333 

Univ.  of  Cambridge   v.   Baldwin   (5 

M.  &  W.  580)  315 

Universities  of  Oxford  &  Cambridge 

V.  Richardson  (6  Ves.  706)  216 

Updyke  r.  Doyle  (7  R.  I.  446)  427 

Upham  V.  Hewett  (42  Wis.  85)  58 

V.  Naylor  (9  Mass.  490)  346 

Usborne,  A'x  jjarte  (1  Glyn.  &  J.  358) 

494,  495 
Usher  v.  Dauncey  (4  Camp.  97)    180,  380 


Vail  V.  Winterstein  (53  N.  W.  932)        23 
Valentine  r   Ford  (2  Browne  193)  23 

V.  Hickle  (39  Oh.  St.  19)  90 

V.  Wysor  (123  Ind.  47,  23  N.  E. 

1076)  435,  438,  512 

Vallett  V.  Parker  (6  Wend.  615)  169, 

171,  180 
Van  Aken  v.  Clark  (82  la.  256,  48 

N.  W.  73)  364 

Van  Alstyne  ;.'.  Cook  (25  N.  Y.  489)     542 
Van  Amringe  v.    Ellmaker  (4   Barr 

281)  260,  262,  265,  508 

Van  Brunt  v.  Matlier  (48  la.  503)  84 

Vance  v   Blair  (18  Oh.  532)  210,  259 

r.  Campbell  (8  Humph.  524)  82 

Vanderburgh  v.  Hull  (20  Wend.  70) 

45,60 
Vanderhurst  v.  De  Witt  (95  Cal.  57, 

30  Pac.  94)  69 

Van  Deusen  v.  Blum  (18  Pick  229)     150, 

155 
Vandike  v.  Rosskane  (67  Pa  330)  538 
Vanduzer  r.  McMillan  (37  Ga.  299)  523 
Van  Dyke  v.  Seelye  (52  N.  W.  215)  83 
Van  Eps  v.  Dillage  (0  Barb.  244) 
Van   Epps  v.  Van   Deusen  (4  Paige 

64) 
Van  heath  v.  Turner  (Winch  24) 
Van  Horn  v.  Corcoran  (127  Pa.  255, 

18  Atl.  16) 

Van  Ingen  v.  Whitman  (62  N.  Y.  513)  538 
Van   Keuren  v.   Parmalee     (2  N.  Y. 

525)  140,  160,  163 

Vann  v.  Barnett  (2  Bro.  C.  C.  158)       517 
Van  Ness  v.  Forrest  (8  Cranch  30)         76, 

256,  265 
-^  V.  Van  Ness  (32  N.  J.  Eq.  669)  199 
Vannoy  v.  Klein   (122   Ind.   416,  23 

N.  E.  526)  69 

Van  Ostrand  v.  Reed  (1  Wend.  424)  483 
Van  Reimsdvk  v.  Kane  (1  Gall.  630)  69 
Van  Sandau'y.  Moore  (1  Russ.  464)  209, 
394,  396,  397,  510 
Van  Scoter  v.  Lefferts  (11  Barb.  140)  136 
Van  Slvck  v.  Skinner  (41  Mich.  186, 

1  N.  W.  971)  369 

Van  Staden  v.  Kline  (64  la.  180,  20 

N.  W.  3)  350,  364 

Van  Valen  v.  Russell  (13  Barb.  593)      76 


95 


479 

2 

537 


Ixxvi 


TABLE   OF  CASES. 


Van  Valkenburgh    v.  Bradley  (2  la. 

108) 
Van  Winkle  v.  Ketclium  (3  Cai.  323) 
Vanzaiit  r   Kay  (2  Humph.  106) 
Varner  v.  Nobleborough  (2  Me   121) 
Varner's  Appeal  (16  All.  U8,  2Monag. 

228) 
Vassar  v.  Camp  (14  Barb.  356) 
Veal  V.  Keely  Co.  (86  Ga.  130,  12  S.  E. 

297) 
Veale  v.  Hassan  (3  McC  278) 
Venning  v.  Leckie  (13  East  7) 
Vent  )'.  Osgood  (19  Pick.  572) 
Venus,  The  (8  Cranch  253)  309, 

Vere,  Ex  jiarte  (19    Ves.   93,  1  Rose 

281) 
c.  Ashby  (10  B.  &  C.  288) 


12, 
170, 
Vergennes,  Bank  of,  v.  Cameron    (7 

Barb   143)  163,  180, 

Vermillion  v.  Bailey  (27  111.  230) 
Vernon  r.  Brunson  (25  Atl.  511) 

f.  Hallam  (34  Ch.  1).  748)      237, 

V.  Jt-fferys  (2  Stra.  114(1)        316, 

V.  Manhattan  Co.  (17  Wend.  524, 

22  Wend.  183)  180,  405,  408, 
V  Vawdrv  (2Atk.  1 19,  2  Kq.  Cas. 

Abr.  8,  Barn.  Cli.  280)         611,514, 
Vesey  v.  Mantel!  (9  M.  &  W.  323) 
Vetterlin  r.  Barnes  (0  F.  R   693) 
Vez  V.  Emerv  (5  Ves   144) 
Vibbard  v  Roderick  (51  Barb  C16) 
Vicary's  Case  (Bac.    Abr.    Eachnce 

623) 
Vice  V.  Anson  (7  B.  &  C  409)  6, 

■ V.  Fleming  (1  Y.  &  J.  227)        79, 

383,  387, 
Vigers  V.  Sainet  (13  La.  300) 
Villa  V.  Jonte  (17  La   Ann.  9)  6, 

Vinal  Burrill  (16  Tick.  401) 
Vincent  v.  Martin  (79  Ala  540)    432, 

Viner  v.  Cadel  (3  Esp.  90) 
Voorhees  v.  Wait  (3  Green  343) 
Vose  r.  Grant  (15  Mass.  521) 
Vosper  V.  Kramer  (31  N.  J.  Eq.  420) 
VuUiamy  v.  Noble  (3  Mer.  614)    399, 
446,  447,  467, 


381 
16 
69 

483 

512 
13 

98 
160 
257 

16 
310 

467 
75, 
430 

184 
508 
537 
239 
469 

412 

515 
257 
378 
453 
47 

164 
104 

,80, 
402 
549 
336 
162 

433, 
451 
503 
20 
269 
332 

432, 
482 


W. 

Waddell  i'.  Cook  (2  Hill  47)  343 

Wade  V.  Jenkins  (2  Giff.  509)  442 

?;.  Pratt  (12  Heisk.  231)  203 

Wadhams  v.  Page  (1  Wash.  St.  420, 

25  Pac.  462)  418 

Wadley  v.  Jones  (55  Ga.  329)  266 

Wadsworth  v.  Manning  (4  Md.  69)         68 
Wagner  v.  Freschl  (56  N.  H.  495)         168 

V.  Wagner  (50  Cal.  76)  508 

Wagnon  v.  Clay  (1  A.  K.  Marsh.  257)  147, 

185 
Wainwriglit  v.  Waterman  (1  Ves.  311)  449 
Wait,  In  re  (IJac.  &  W.  005)  468,  470,  471 


Wait  V.  Brewster  (31  Vt.  516) 
Waite  V   Dodges  (.34  Vt.  181) 

V.  Foster  (33  Me.  424) 

r.  Tliayer  (118  Mass.  473) 

Waithman,  Ex  parte  (2  Mont. 
364) 

V.  Miles  (1  Stark   181) 

V.  (4  Camp.  373) 

Wakeham,  In  re  (13  Q.  B.  D.  43) 


103 

82 

382 

87 

A 

164,  413 

374,  388 

377 

474 

Waland  v.  Elkins  (1  Stark  272)  66 

Waiburn  v.  Ingilby  (1  My.  &  K  61)     281, 

549,  652 

Walcott  V.  Canfield  (3  Conn.  198)  147 

Waldeck  v.  Brande  (61  Wis.  679,  21 

N    W.  633)  400 

Walden  v.  Sherburne  (15  Johns.  409)  132, 

139,  140,  150,  163,  1G4,  169,  206 

Waldo  Bank  r.  Greely  (16  Me.  419)      171 

r.  Lunibert  (16Me.  416)  180,185,  186 

Walford  v  De  Pienne  (2  Ksp.  554)  23 

Walker,  Ex  pmtf  (1  Bose  441)       488,  496 

V.  Bean  (34  Minn.  427,  26  N  W. 

148 

Brown  (66  Tex.  556,  1  S.  W. 

103,  104 

Grain  (17  Barb.  119)  550 

])ul)eiTy  (1  A.  K.  Marsh.  189)  163 
"     •    --    ■  33Q 

211 
42,  60 
293,  297, 
300,  301 
16  S.  C. 
76)  '  ■  131 

260 
143 
614 


V.  Eyth  (25  Pa.  216) 
V.  Harris  (1  Anst.  245) 
V.  Hirscli  (27  Ch.  1).  460) 
V.  House  (4  Md.  Ch.  39) 

■V.  Kee  (14  S.  C    142, 


Long  (2  Browne  125) 

V.  McCiilh)cli  (4  Me  421) 

V.  Symonds  (3  Swanst.  64) 

V.  Trott  (4  Kdw.  Ch.  38)         288,  295 

V.  Wait  (50  Vt.  608)  4,  159,  247,  433 

V.  Whipple   (58   Mich.    476,    25 

N.  W.  472)  392,  393 

Wall  V.  File  (37  Pa  394)  90,  488 

Wallace  v.  Agry  (4  Mas.  3.36)  483 

V.  Fairman  (4  Watts  378)  92 

V.  Fitzsimmons  (1  Dall.  248)  386,443 

V.  Kelsall  (3  B  &  C.  273)  179 

V. (7    M.    &    W.    264)       179, 

274 

V.  Patterson  (2  H.  &  McH.  463)  468, 

476 
Wallace's  Appeal  (104  Pa.  569) 
Waller  v.  Davis  (59  la.  103,  12  N.  W. 

798) 
Walling  V.  Burgess  (122  Ind.  299,  22 

N.  E  419) 
Wallingford  v.  Burr  (17  Neb  137) 
Wallis  V.  Hirsch  (1  C.  B.  n.  s.  416) 

V.  Wallace  (6  How.  Miss.  254) 

V.  Wood  (7  S.  W.  852) 

Wallworth  v.  Holt  (4  My.  &  C.  619) 


344 

394 

361 
237 
219 
307 
68,69 
281. 


4.57,  510 
Walmsley  v.  Cooper  (3  P.  &  D.  149)     145 

V.  Walmsley  (3  J  &  Lat.  556)       520 

Wain  V.  Hewes  (5  S  &  R.  468)  437 

Walrath  v.  Viley  (2  Bush  478)  103 


TABLE   OF   CASES. 


Ixxvii 


Walsh  V.  Adams  (3  Denio  125) 


321,  325, 
343 
471 


525 
146 
160 
150 

22 


V.  Kelly  (42  Barb.  <J8) 

V.  McKeen  (75  Cal.  519,  17  Pac 

673) 
Walton  V.  Dodson  (3  C.  &  P.  1G2) 

V.  Kohinsoii  (5  Ire.  341) 

V.  Tusten  (40  Miss.  560) 

Waiiisley  v.  Lindeiiberger  (2   Rand 

478) 

Wann  v.  Kelly  (5  F.  R.  584)  8 

Want  i'.  Roese  ( I  Bing   18)  257,  2G7 

Warbrittoii  i\  Cameron  (10  Ind.  302)    253 
Ward  u.  Bodenian  (1  Mo.  Ap]).  272) 

u.  Brampston  (3  Lev.  302) 

V.  Brigiiam  (127  Mas.s.  24) 

V.  Dalton  (7  C.  B.  643) 

y.  Gaunt  (6  Dner  257) 

V.  Jolinson  (13  Mass   148) 

V.  Leviston  (7  Blaekf.  460) 

Morris  (4  II.  &  McH.  330) 


66 

320 

50 

485 

54 

76,  01 

273,  317 

468 

Motter  (2  Rob.  Va.  536)      76,  91, 

93,  94 

V.  Newell  (42  Barb.  482)        539,  542 

V.  Society  of  Attorneys  (1  Coll. 

379)  551 

V.  Tiiompson  (1  Newb.  Adm.  95;  12, 

55,  102 

r.  Tyler  (52  Pa.  393)  376 

Warden  v.  Hughes  (3  Wend.  418)  172 
Warder  v.  Newdigate  (11  B.  Mon.  174)  179 
Wardwell  r.  Haight  (2  Barb.  549)  408,  411 
Ware  v.  Clowny  (24  Ala.  707)  320 

Warfield  r.  Booth  (33  Md.  63)  236 

Waring  ,:  Cram  (1  Pars.  Cas.  522)  438,443 

V.  Nat.   Marine    Bank   (74   Md. 

278,  22  Atl.  140)  44,  47 

0.  Robinson  (1  Hoff.  Ch.  524)  155,301 

Warner  v.  Cunningham  (3  Dow  76)     127, 

432 

V.  Griswold  (8  Wend.  665)      35,  317 

V.  Juif  (38  Mich.  602)  203 

V.  Smith  (9  Jur.  N.  s.  168)  33 

Warren,  hi  re  (Da v.  320)      7,  35,  74,  111, 

183,  349 

V.  Ball  (37  111.  76)  409 

».  Batchelder  (15  N.  H.  129)  482 

V.  Dickson  (30  111.  363)  99 

V.  Farmer  ( 100  Ind.  593)         332,  478 

V.  French  (6  All.  317)  87 

V.  Smitli  (9  Jur.  n.  8.  168)  523 

V.  Taylor  (8  Sim.  599)  278 

V.  Wheelock  (21  Vt.  323)  264 

V.  Willis  (38  Tex.  225)  337 

Warriner  v.  Mitchell  ( 128  Pa.  153,  18 

Atl.  337)  182 

Warring  v.  Hill  (89  Ind.  497)  254 

Warwick  v  Bruce  (2  M.  &  S.  205)  20 

Washburn  r.  Bank  of  Bellows  Falls 

(19  Vt.  278)  325,  327,  328,  330,  337,  338 

V.  Goodman  (17  Pick.  519)   380,  383, 

384,  399,  432,  436,  438,  443,  446 

V.  Pond  (2  AH.  474)  95 

Watchman,  The  (1  Ware  232)  468 

Waterer  v.  Waterer  (L.  R.  15  Eq.  402)  354 


Waters  v.  Taylor  (15  Ves.  10)  280,  293, 
295,  296,  297,  298,  508,  510 

V.  Taylor  (2  Ves.  &  B.  299)  342,  371, 

391,  455,  456,  457,  458,  459 

V.  Tompkins  (2  C  M.  &  R.  723)  158, 

421 
Watertown,  Bank  of,  v.  Landon  (45 

N.  Y.  410)  49,  51 

Watkins,  Ex  parte  (1  Mont.  &  McA. 

57)  490,491,498 

V.  Hill  (8  Pick.  522)  483 

Watkinson  v.  Bank  of  Penn.  (4  Whart. 

432)  403,  406,  413 

Watney  v.  Wells  (L.  R.  2  Ch.  250)     202, 

454,  527 
Watson,  Ex  parte  (16  Ves.  265)  21 

, (19  Ves.  459)  30,  32,  40,  77, 109, 

271,  498 

, (2  Ves.  &  B.  414)  123 

, (4  Madd.  477,  Buck   449, 

492)  472, 499 

V.  Bourne  (10  Mass.  337)  468 

V.  Fletcher  (7  Gratt.  1)         9,  10,  269 

V.  Hinchman    (42    Mich.   27,     3 

N.  W.  236)  119 

V.  Miller  (55  Tex.  289)  333 

V.  Murray  (23  N.  J.  Eq.  257)  9 

V.  Owens  (1  Rich.  Ill)  76 

V.  Sheath  (4  Madd.  477)  471 

V.  Taylor  (2  Ves.  &  B.  299)  475 

V.  Wells  (5  Conn.  468)    118.  165,  413 

V.  Woodman  (L.  R.  20  Eq.  721)    159 

Watt  V.  Kirby  (15  111.  200)  88 

Watts  0.  Adler  (130  N.  Y.  646,  29  N. 

E.  131)  508 

r.  Brook  (3  Ves.  612)  9 

V.  Patton  (66  Miss.  54,  5  So.  628)  196 

V.  Rice  (75  Ala.  289)       321,  333,  3-34 

V.  Say  re  (76  Ala.  397)  347 

Waugh  V.  Austen  (3  T.  R.  437)  469 

V.  Carringer  (1  Yerg.  31)  91 

V.  Carver  (2  H.  Bl.  235)       30,  35,  .39, 

40,  46,  64,  76,  77,  79,  2.59.  492 
Way  V.  Bassett  (5  Hare  55)  157,  448 
V.  Stebbins  (47  Mich.  296,  11  N. 

W.  166)  352 

Waydell  v.  Luer  (5  Hill  448)  94,  483 

r. (3  Den.  410)  95 

Wead  V.  Richardson  (2  Dev.  &  B.  535)  97 
Weald  of  Kent  Canal  Co.  v.  Robinson 

(5  Taunt.  801)  555 

Weaver  v.  Ashcroft  (50  Tex.  427)  231,  335 

V.  Jones  (24  Ala.  420)  17 

V.  Upton  (7  Ired.  458)     201,  248,  258 

V.  Tapscott  (9  Leigh  424)  94 

V.  Weaver  (46  N.  H.  188)        336,  470 

Webb,  In  re  {2  J.  B.  Moore  -500)    194,  269 

, (4  Sawy.  326)  470 

V.  Brooke  (3  Taunt.  6)  9 

V.  Fordyce  (55  la.  11,  7  N.  W. 

385)  199 

Webster  v.  Bray  (7  Hare  159)      221,  233, 

234 
V.  Lawson  (73  Wis.  661,  41  N. 

W.  710)  254 


Ixxviii 


TABLE   OF   CASES. 


Webster  v.  Stearns  (U  N.  H.  498)  91,  161 

0.  Webster  (3  iSwanst.  490)  242,  289, 

387,  441,  440 
Wedderburn  v.  VVedderburn  (22  Beav. 

84)  236,  237,  440,  442,  443,  447,  523 
V. (2  Keen  722,  4  My.  &  C. 

41)  501,513,514 
Weed  V.  Kello-'','  (6  McLean  44)  165 
r.  Richardson  (2  Uev.  &  B.  535)    172 

V.  Small  (7  Paige  572)  515 

Weeks  v.  McClintock  (50  Ark.  193,  6 

S.  W.  734)  201,212 

—  V.  Mascoma  Rake  Co.  (58  N.  H. 
101)  150,  154 

i:  Weeks  (5  Ired.  Eq.  Ill)  304 

Weil  V.  Jones  (70  Mo.  560)  347,  437 

r.  Simmons  (66  Mo.  617)  24 

Weisiger  v.  Wood  (15  S.  E.  597)  23,  24 
Weisman  v.  Smith  (6  Jones  Eq.  124)  305 
Weld  V  Oliver  (21  Pick.  559)  303,  304 
Weller  v.  Baker  (2  Wils.  414)  320 

Wells  V.  Brown   (S3  Ala.   161,  3  So. 
439) 

I'.  Carpenter  (65  111.  447) 

V.  ElUs  (68  Cal.  243,  9  Pac.  80) 


30G 
266 
374, 
480 


152 
132 

180 
260 

82 
200 
222 

68 

492 


V.   Evans    (20    Wend.   251,   22 

Wend.  324) 

V.  March  (30  N.  Y.  344) 

V.  Masterman  (2  Esp.  731) 

V.  Simonds  (51  How.  Pr.  48) 

-—  V.  Turner  (10  Ind.  133) 

V.  Wells  (  Ventr.  40) 

Welsh  V.  Canfield  (60  Md  400) 

/'.  Speakman  (8  W.  &  S.  257) 

Wendell  ;-.  Van  Rensselaer  (1  Jolins 

Ch.  344) 

Wendling  v.  Jennisch  (52  N.  W.  341)   526 
Werner  v.  Leisen  (31  Wis.  169)  450 

Wesson  v.  Washburn  Iron  Co.  ( 13  All. 

95)  361 

West,  Ex  parte  (2  De  G.  M.  &  G.  198)   21 

,  In  re  (39  F.  R.  203)  478 

V.  Citizens'  Ins.  Co.  (27  Oh.  St.  1)  235 

V.  Randall  (2  Mass.  181)  469 

V.  Skip  (1  Ves.  237)         130,  137,  320, 

436,  465,  468,  475,  500,  524 
West  Branch  Bank  v.  Moorehead  (5 

W.  &  S.  542) 
Westcott  ('.  Price  (Wright  220) 

r.  Tyson  (38  Pa.  389) 

Westerls  v.  Evertson  (1  Wend.  532)      35, 
262,  265,  268 
Western  Assur.  Co.  v.  Towle  (05  Wis. 

247) 
Western  Bank  of  Scotland  v.  Needell 

(1  F.  &  F.  401) 
Western  Mass.  Ins.  Co.  v.  Riker  (10 

Mich.  279) 
Western  Stage  Co.  v.  Walker   (2  la. 

512)  140,  189,  190 

Weston,  Ex  parte  (12  Met.  1)        182,  314, 

315,  488 
West  Point  Foundry  Assoc,  v.  Brown 

(3  Edw.  Ch.  284)  5 


420 
240 
471 


105 


410 


236 


West   Virginia  Transp.  Co.   i'.   Oliio 

River  Pipe  Line  Co.  (22  W.  Va.  617)  507 
Wetmore  v.  Baker  (9  Jolins.  307)  05,  200 
Wetter  v.  Schlieper   (4  E.  D.    Smith 

707)  135,  295,  297 

Weyer  v.  Thornburgh  (15  Ind.  124)      477 
Wevlan  v.  Elkins  (Holt  227,  1  Stark. 

•2.T2)  124 

Wiialey  v.  Moody  (2  Humph.  495)         184 
Wharton  v.  Fisiier  (2  S.  &  R.  178)         479 

V.  Walker  (4  B.  &  C.  103)  482 

V.  Woodburn  (4  Dev.  &  B.  507)      93 

Wiiately  v.  Manhim   (2  Esp.  008)  69 

Wheatley  v.  Calhoun  (12  Leigh  204)     ,353 
Wheeler,  Ex  porle  (Buck  25)  05,  494 

V.  Arnold  (30  Mich.  304)  249 

V.  Sage  (1  Wall.  518)  204 

V.  Rice  (8  Cush.  205)  173 

V.  Van  Wart  (9  Sim.  193,  2  Jur. 

252)  371,  373,  374,  394,  396 

Wheelock  v.  Doolittle  (18  Vt.  440)      159, 

160 
Whelen  v.  Watmough  (15  S.  &  R.  153)  507 
Whetham  v.  Davey  (30  Ch.  D.  574)  521 
Whetstone  v.  Shaw  (70  Mo.  575)  260,  268 
WhiUdin  v.  Bullock  (4  W.  N.  C.  234)  547 
Whipple  V.  Parker  (29  Mich.  370)  550 
Whitaker  v.  Brown  (16  Wend.  509)  88.  89, 
90,  123,  143,  169,  172,  206 
Whitcomb  v.  Converse  (119  Mass.  38)  202, 
222  5'''4   525 

V.  Whiting  (3  Doug.  652)     'l50,'l57, 

158,  159 
White,  In  re  (1  Ch.  D.  514)  444 

;;.  Boone  (12  S.  W.  51)  400 

V.  Dougherty  (Mart.  &  Y.309)       481 

V.  Eiseman  (134  N.  Y.  101,  31  N. 

E.  276)  533,  538 

V.  Fitzgerald  (19  Wis.  480)  302 

V.  Gibson  (11  Ired.  283) 

V.  Hackett  (24  Barb.   290) 

V.  (20  N.  Y.  178) 

V.   Hale  (3  Pick.  291) 

V.  Harlow  (5  Gray  403) 

V.  Jones  (38  111.  159) 

V. (14  La.  Ann.  681) 

V.  Murphy  (3  Rioli.  369) 

V.  Osborne  (21  Wend.  72) 

v.  Phelps  (12  N.  H.  386) 

r.  Reed  (124  N,  Y.  408,  26  N.  E. 

1037) 

V.  Toles  (7  Ala.  569) 

V.  Tudor  (24  Tex.  039) 

V.  Union  Ins.  Co.   (1  N.  &  McC. 

559)  399, 500 

V.  Woodward  (8  B.  Mon.  484)     291, 

344 
Whitehead  r.  Barron  (2  M.  &  R.  248)  426 

V.  Cliadwell  (2  Duv.  432)  477 

Wiiiteman  r.  Smith  (12  Rich.  L.  595)  126 
Whiteright  r.  Stimpson  (2  Barb.  379)  436, 

540 
Whitesides  v.   Lafferty    (3    Humph. 

150)  299 

Whiting  V.  Furanet  (1  Conn.  60)  474 


164 
542 
542 

156,  160 
268 
340 
312 
413 

303,  321 
303 


524 
178 

381 


TABLE   OF   CASES. 


Ixxix 


VVliitinan  v.  B.  &  M.  R.  R.  (3  All  133)  356 

/•.  Bowdeii   (27  S.  C   53,  2  S.  E. 

6;J0)  196 

V.  Keith  (18  Oh.  St.  134)  4 

V.  Leonard  (3  Tick.  117)        414,  458, 

404 

/•.  Porter  ( 107  Mass.  522)  58,  561 

Whitman  v.  liohinson  (21  Md  30j  208,293 
Wliitiiiore,  J'Ji:  j/(irtc  (3  Deac  305j  42b 
, (.3   Mont.  &   A.  627j    482, 484, 


485 

173 

264 

18 

69,  107 

53,60 

316 


y.  Adams  (17  la,  567) 

Whitney  v.  Dean  (5  N.  II.  249) 
ij.  Dutcli  (14  Mass.  457j 

r.  Ferris  (10  Johns.  66j 

ij.  Ludington  (17  Wis.  140) 

f.  McKechnie  (1  Bosw.  427) 

r.  Reese  (11  Minn.  138)  160 

r.  Sterling  ( 14  Johns.  215)  69 

Whiltaker  v.  Howe  (3  Beav.  389)  241 

Wliittenton  Mills  v.  Upton  (10  Gray 

582)  27 

Whittingham  v.  Hill  (Cro.  Jac.  494)  16 
Wliittle  V.  McFarlane  (1  Knai)p  312)  200 
Wliitton  V.  Hulbert  (Freem.  Cli.  231)    131 

V.  Smith  (Freem.  Ch.  231)  371 

Whitwell  /'.  Warner  (20  Vt.  425)  375 

Whitworth  r.  Hams  (40  Miss.  483)  279 
Wiivwall  c.  Champion  (2  Stra.  1083)  16 
Wic-kliam  ».  Davis  (24  Minn.  167)         344 

r.  Wickham  (2  Kay  &  J.  478)        424 

Widdifield  V.  Widdifield  (2  Binn.  245)  6 
Wiegand  v.  Copeland  [U  F.  R.  118)    352, 

360,  366 
Wiesenfeld  v.  Stevens  (15  S.  C.  554 1  351 
Wigfield  V.  Potter  (45  L  T.  Rep.  612)  557, 

561 
Wiggin  V.  Cummings  (8  All.  153)  249,  256 

y.  Goodwin  (63  Me.  389)         136,  509 

0.  Tudor  (23  Pick.  444)  143,  144 

Wiggins  V.  Hammond  (1  Ma  121)  88 

Wightman  v.  Tovvnroe  (1  M.  &  S.  412)  65, 

452,  503 

Wilby  V.  Phinney(15  Mass.  116)  261,  263, 

267,  384,  446 

Wilcox  V.  Jackson  (7  Col.  521)       132,  135 

V.  Kellogg  (11  Oiiio  394)  332 

f.  Koatli  (12  Conn.  550)  19 

—:—  V.  Singletary  ( Wright  420)  149 

Wild  V.  Dean  (3  All   579)  429,  484 

V.  Davenport  (,48  N.  J.  L.  129,  7 

295)  46,51,65,451,452 


Atl. 
W^iide  V.  Jenkins  (4  Paige  481) 

Wilder  V.  Keeler  (3  Paige  167) 
Wildes  V.  Fessenden  (4  Met.  12) 


512,  515, 

518 

330,  444 

94,415, 

484 

485 

337,  343 

165 


Wildman,  Ex  parte  (1  Atk.  109) 
Wiles  V.  Maddox  (26  Mo.  77) 
Wiley  V.  Griswold  (41  La.  375) 
Wilkins  V.  Davis  (15  N.  B.  R.  460)      463, 

466,  469 

• V.  Pearce  (5  Den  541)  79 

Wilkinson,  Ex  parte  (13  Sim.  475)         495 
c.  Candlish  (19  L.  J.  Ex,  166)        82 


Wilkinson  t'.  Frasier  (4  Esp.  182) 
V.  Henderson  (1  M.  &  K.  582) 

445, 

V.  Jett  (7  Leigh  115) 

V.  Stafford  (1  Ves.  Jr.  41) 

V.  Tilden  (9  F.  K.  683)    284,  286, 

V.  Torkuigton  (2  Y.  &  C.  726) 

Wilks  V.  Back  (2  East  142) 
Willard  V.  Decatur  (59  N.  H.  137) 

(.'.  Stone  (7  C(jw.  22) 

Willett  V.  Blaudford  (1  Hare  253) 

440, 

V.  Brown  (65  Mo.  138)  362, 

V.  Chambers  (Cowp.  814)        37, 

Williams,  Ex  parte  ( 1 1  Ves.  3)  129, 
326,  327,  328,  338,  378,  383,  391, 
464,  465,  475,  490,  493,  494, 

, (Buck  13)       316,  428,  481, 

,  (3  Mont.  D.  &  D.  433) 

V.  Attenborough  (T.  &  R.  70) 

V.  Bank  of  Michigan  (7  Wend. 

542) 

V.  Barrett  (10  Kas  455) 

»  V.  Beaumont  (10  Bing.  270) 

V.  Bingley  (2  Vern.  278) 

>\  Bowers  (15  Cal.  321) 

V.  Brimhall  (13  Gray  462) 

V.  Butler  (35  111.  544) 

V.  Farrand  (88  Mich.  473,  50  N. 

W.  446)  237,  238,  239,  243, 
r.  Fletcher  (129  111.  356,  21   N. 

E.  783) 

V.  Gage  (49  Miss.  777)  327, 

V.  Gdchnst  (11  N   H.  535)       96, 

V.  Gillespie  (30  W.  Va  586,  5  S. 

E.  210) 

V.  Gillies  (75  N  Y.  197) 

V.  Gridley  (9  Met  482) 

V.  Henshaw  (11  Pick  81)       252, 

257,  261,  262,  263,  265, 

V.  (12  Pick  378) 

r.  Hitchings  (10  Lea  326) 

0.  Hodgson  (2  H  &  J.  474)       91 

93,  154,  164, 

V.  Jones  (oB.&C   108) 

r.  Keats  (2  Stark.  290)  107, 

V.  Lewis   (115  Ind.  45,  17  N.  E. 


262) 

—  V.  Manning  (41  How.  Pr.  454) 

—  V.  Moor  (11  M.  &  W.  256) 
V.  Rawlinson  (3  Bing.  7l) 

—  V.  Roberts  (6  Cold    493)         118, 

—  V.  Savage  Mfg   Co.  (1  Md.  Cli. 
306) 

—  V.  Shelden  (61  Mich.  311,  28  N. 
W.  115) 

—  V.  Soutter  (7  la.  4-35) 

—  V.  Thomas  (6  Esp.  18)  82, 

—  V.  Thorp  (2  Sim.  263) 

—  V.  Walbridge  (3  Wend.  415)  172, 

—  V.  Walshy  (4  Esp.  220) 

—  ('.  Whedon  (109  N.  Y.  333, 16  N. 
E   365) 


60 
330 
482 

60 
453 
510 
210 
183 
293 

20 
200, 
523 
363 
116, 
532 
136, 
434, 
500 
483 

4r4 

34 

549 

97 

320 

286 

402 

97 

5 

244 

61 
345 
172 

135 

84 
161 
255 
522 
522 
144 

,92, 

508 

12 

403, 
407 

165 
163 
16 
425 
135 

515 

350 
46 
169 
495 
184 
150 

136 


Ixxx 


TABLE  OF  CASES. 


Williams  v.  Williams  (2  Swanst.  253, 

1  Wils.  Vh  478) 

V.  Wilson  (-1  Sandf.  Ch.  379) 

241,  290,  •2!)7, 
Williamson  v.  Barbour  (9  Ch.  D.  521)) 

u.  Fox  (38  Pa.  214) 

V.  Havcock  (11  la.  40) 

V.  Johnson  (1  li.  &  C    14G)  111, 

182, 

V.  McGinnis(ll  B.  Mon  74)  12(5, 

V.  Naylor  (3  Y.  &  C.  208) 

V.  Wilson  (I   Bland  418)     297, 

300,  bOl,  391,  432,456, 
Willings  V.  Consoqua  (1   Pet  C  C. 

301)  76,93, 

Willis  I'.  De  Castro  (4  C.  B  n  s.  21G) 

V.  Dvson  (1   Stark.  164)  80,  387, 

V.  Freeman  (35  Vt.  44)  345,  350, 

V.  Green  (5  Hill  232) 

V.  Hill  (2  Dev.  &   B.  231)     88, 


V.  Jerncsran  (2  Atk.  251 )        512, 

V.  Hector  (50  F.  K.  684) 

V.  Sharp  (113  N.  Y.  686,  21  N 

E.  705)  65,  451, 

Willison  V.  Patteson  (7  Taunt.  439) 
Williston  V.  Camp  (9  Mont.  88,  22  Pac 

501) 
WiUock,  Ex  parte  (2  Rose  892) 
Wills  V.  Cutler  (P.l  N.  H  405) 

V.  Sinimonds(51  How.  Pr  48) 

Willson  (•  Gomparts  (11  Johns  193) 

V.  Nicholson  (61  Ind   241) 

V.  Owen  (30  Mich.  474) 

Wilniot  V  The  Ouachita  Belle  (32  La. 

Ann.  607) 
Wilsford  r.  Wood  (1  Esp.  182)        12, 
Wilson,  Ex  parte   (18  Ves  439) 

I'.  Bowden  (8  Rich.  9) 

V.  Campbell  (5  Gilm   383) 

V.  Comine  (2  Johns.  280)        320, 

V  Curzon  (15  M.  &  W.  532) 

V.  Cutting  (4  Moo.  &  S  268) 

V.  Fitchter  (3  Stock.  71) 

V.  Gibbs  (2  Johns  282) 

V.  Greenwood  (1  Swanst  471) 

294,  295,  297.  298,  299,  378,  383, 
443,  456,  463,  464, 466,  501, 

V.  Hirst  ( 1  Nev.  &  M   742) 

V.  Hunter  (14  Wis.  683)  152, 

V.  Johnstone  (L.  R   16  Eq.  606) 

V.  Lassen  (15  Cal   116)  454 

V.  Lewis  (2  M.  &  G.  197) 

V.  (2  So.  N.  R.  115) 

V.  Mower  (5  Mass  411) 

V.  Reed  (3  Johns.  175)    303,  304. 

V.  Richards  (28  Minn.  337) 

V.  Robertson  (21  N.  Y.  587)  332, 

V.  Soper  (13  B.  Mon.  411)     136, 

328 

V.  Stilwell  (14  Ohio  464) 

V.  Torbert  (3  Stew.  296) 

V.  Turnman  (6  M.  &  G.  236) 


287 
239, 
440 
118 
405 
283 
113, 
•A2b 
.  144 
451 
298, 
,463 

143 
144 

402 
468, 
476 
38 
160, 
181 
518 
105 

452 
26 

374 

499 

83 

58 

470 

433 

9 

155 
313 
480 
138 
11 
476 
553 
254 
293 
475 
129, 
391, 
.509 
426 
355 
529, 
530 
,507 
97 
176 
145 
321 
168 
490 
327, 
338 
380 
160 
118 


Wilson  V.  Wallace  (8  S.  &  R.  53)  113,  272 
273,312,498 

V.  Waugh  (101  Pa.  233)        160,  161, 

389 

V.  Whitehead  (10  M.  &  W.  503)    57, 

102 

V.  Williams  (14  Wend.  146)      96,  99, 

172,  174 
Windham  County  Bank  v.  Kendall 

(7  R.  I.  77)  170 

Winchester  v.  Glazier  (152  Mass.  316, 

25N.  E.  728)  212 

Winget  V.  Heathcote  (4  Y.  &  C.  187)  298 
Wing  Ho   ('.  Baldwin  (70  Cal.  194, 

11  Pac.  565)  228 

Winship  v.  Bank  of  U.   S.  (5  Mas. 

176)  74,  142,  143,  168,  170 

I,  (5  Pet.  529)       32,  55,  73,  89, 

114,  131,  140,  142,  143,  168,  170,  206 
Winslow  V.  Newlan  (45  111.  145)  103 
V.  Wallace  (116  Ind.  317,  17  N. 

E.  923)  477 

Winsor  i-.  Cutts  (7  Me  261)  63 

Winsten  v  Ewing  (1  Ala.  29)  325 

Winter  v.  Innes  (4  Mv.  &  C.  101)    96,  482 

V.  White  (1  Br.  &  B  350)  260 

r. (3  J  B.  Moo  674)  265 

Wintermute  v.  Torrent  (83  Mich.  555, 

47  N.  W  358)  81,  247 

Wintle  V.  Crowther  (1  C  &  G  316)  75,96, 
97,  142,  170,  176 
Wipperman  v.  Stacy  (80  Wis  345,  50 

N.  W.  336)  223 

Wise  V.  Copley  (36  Ga.  508)  97,  99 

I'.  Frey  (7  Neb.  134)  335 

Wish  V.  Small  (1  Camp.  331)  55,  63 

Wisham  v.  Lippincott  (1  Stock.  353)  336 
Witter  i:  McNiel  (4  111.  433)  151 

V.  Richards  (10  Conn.  37)     291,  325, 

327,  344,  498 
Withers  v.  Withers  (8  Pet.  359)  520 

Wolbert  v.  Harris  (3  Halst.  Ch.  605)    295, 

296,  301 
Wolf  V.  Mills  (56  111.  360)  119 

Wood,  Ex  parte  (1  De  G.  M.  &  G.  272)   130 

, (1  De  Gex  134)  488,  494 

, (3  Mont.  D.  &  D.  314)  494 

V.  Barber  (90  N.  C.  76)  159,  160 

V.  Beath  (23  Wis.  254)  55 

V.  Bodwell  ( 12  Pick.  268)  483 

V.  Braddick  (1  Taunt.  104)   158,  161, 

165,  376,  385 
V.  Brush  (72  Cal.  224,   13  Pac. 

627)  251 

;;.  Connell  (2  Whart.  542)  142 

V.  Copper  Miners'  Co.  (17  C.  B. 

561)  220 

V.  Dodgson  (2  M.  &  S.  195)  472,  473. 

499 

V.  Dummer  (3  Mas.  312)  436 

V.  Erie  Ry.  (72  N.  Y.  196)  228 

V.  O'Kelley  (8  Cush.  406)      273,  817 

V.  Pennell  (15  Me.  52)  77,  104 

V.  Rutland  &  A.  Ins.  Co  (31  Vt. 

552)  235,  312,  313 


TABLE   OF    CASES. 


Ixxxi 


Wood  0.  Scoles  (L.  R.  1  Ch.  3G9)  203,  519 

u.  Slieplierd  (2  Pat.  &  II.  442)      i;J2, 

148,  149 

V.  Vallette  (7  Oh.  St.  122)  55 

Woodbridge  v.  Swann   (4  B.  &  Ad. 

633)  471 

V.  Wilkins  (3  How.  Miss.  360)      349 

Wooddrop  v.  Wards  (3  Dcsaus.  203)   327, 

500 
Woodford  v.  Downer  (13  Vt.  522)  376 
Woodgate,  Ex  parte  (2  Mont.  D.  &  D. 

391)  494 

Woodling  r.  Knickerbocker  (31  Minn. 

208,  17  N.  W.  387)  125 

Wooiimansie  ''.  Holcomb  (34  Kas.  35, 

7  Puc  003)  331,  332 

Woodruff   V.    King  (47  Wis.  261,   2 

N.  W.  4.52)  1.34 
V.  Scaife  (83  Ala.  152,  3  So.  311)    83 

V.  Webb  (32  Ark.  612)  203 

Woods  *•.  Wilder  (43  N.  Y.  164)  26 

Woodward,  Ex  parte  (3  Mont.  &  A. 

232)  448 

,  In  re  (4  Johns.  289)  16 

V.  Cowing  (41  Me.  1)  52 

V.  (ijles  (2  Vern.  110)  224 

u.  Ntwhall  (1  Pick.  500)  22 

V.  Schatzell  (3  Johns.  Ch.  412)      288 

V.  Winsidp  (12  Pick.  430)  147 

Woodworth  r.  Bennett  (43  N.  Y.  273)      9 

V.  Downer  (13  Vt.  522)  162 

V.  Fuller  (24  111.  109)  307 

Wooley  V.  Batte  (2  C.  &  P.  417)  2()7 

V.  Kelly  (1  B.  &  C.  68)  336,  414 

Worcester  Corn  Exchange  Co.,  In  re 

(4  I)e  G.  M.  &  (;.  180)  52,  78,  82,  118,  552 
Word  r.  Word  (90  Ala.  81,  7  So.  412)  293 
Worniley  r.  Wormley  (8  Wheat.  421)  514 
Worrall  v.  Munn  (5  N.  Y.  221)  151,  153 
Worsley  v.  De  Mattos  (1  Burr.  467)  493 
Worts  V.  Pern  (3  Bro.  P.  C.  558j  282 

Wray  v.  Hutchinson  (2M.  &  K.  235)  284, 

455,  458 

V.  Milestone  (5  M.  &  W.  21)  260,  262, 

265 
Wren  r.  Kirton  (8  Ves.  502)  34 

Wrexham   v.    Hudleston  (1    Swanst. 

514)  127,  458,  459 
Wright  V.  Cobleigh  (21  N.  H.  339)  249 
V.  Cumpsty  (41  Pa.  102)        253,  260 

i\  Davidson  (13  Minn.  449)  55 

r.  Hooker  ( 10  N.  Y.  51)  111 

V.  Hunter  (1  East  20)  2-53 

V. (5  Ves.  792)        254,267,276 

V.  Michie  (6  Gratt.  354)  252,  257 

V.  Pratt  (31  Wis.  99)  491 

V.  Pulhani  (2  Chit.  121)  403,  406,  412 

V.  Hussell  (13  Wils.  6-32)  314 

r.  Ward  (65  Cal.  525,  4  Pae.  534)  344 

V.  Williamson  (2  Penn.  978)  312,  316 

r.  Wright  (2  Desaus.  244)  23 

Wrightson  r.  Pullam  (1  Stark.  375)    381, 

403,  406,  412 


Wyatt  V.  Hodson  (8  Bing.  309)      157,  158 
Wycoff  V.  Purnell  (10  la.  332)       253,  262 


Y. 


Yale  V.  Eames  (1  Met.  486)  382,  443 

V.  Yale  (13  Conn.  185)  179 

Yallop,  Ex  parte  (15  Ves.  60)         490,  493 
Yandes  v.  Lefavour  (2  Blackf.  371)     144, 

160 
Yarbrough  v.  Bush  (69  Ala.  170)  24,  333 
Yarneil  v.  Anderson  (14  Mo.  619)  96,  417, 

419,  482 
Yates  V.  Finn  (13  Ch.  D.  839)        213,  439 

V.  Lyon  (61  N.  Y.  344)  17 

Yeager  v.  Wallace  (57  Pa.  365)      78,  188, 

302 
Yeatman  ;•.  Woods  (6  Yerg.  20)  362 

Yeoman  v.  Lasley  (40  Oh.  St.  190)    35,  59 
Yetzer  v.  Applegate  (50  N.  W.  66)        195 
Yonge,  Ex  parte  (3  Ves.  &  B.  34)  199,  471, 
489,  497,  498 

I,. (2  Rose  40)  497,  498 

York  V.  Clemens  (41  la.  93)  7,  350 

V.  Eaton  (2  Freem.  23)  436 

York   &  N.  M.   Ry.   v.   Hudson   (16 

Beav.  485)  384 

York  Co.  Bank,  Appeal  of  (32  Pa. 

446)  327 

Y'orkshire  Banking  Co.  v  Beatson  (5 

C.  P.  D.  109)  114 

Young,  Ex  parte  (2  Ves.  &  B.  242)  66,  326 

, (Buck  179.  3  Madd.  124)      467 

, (2  Rose  40) 

V.  Axtell  (2  H.  Bl.  243) 


V.  Brick  (3  N.  J.  L.  66.3) 

V.  Clapp  (32  N.  E.  187) 

V.  Goodson  (2  Russ.  255) 

v.  Hoglan  (.52  Cal.  466) 

V.  Hunter  (4  Taunt.  582)  75, 


471,  474 
64,  76,  104, 
107 
249,  260 
331 
145 
508 
101, 


102, 426 

r.  Keighly  (15  Ves.  557)       134,  436, 

475,  554,  556 

V.  Smith  (25  Mo.  341)  163 

r.  Tibbetts  (32  Wis.  79)  407 

V.  Timmins  (1  Cr.  &  J.  331)  401 

V.  Wheeler  (34  F.  R.  98)  6 

Y^ounglove  v.  Liebhardt  (13  Neb.  557, 
14  N.  W.  526)  248 


Zimmerman  v.  Chambers  (79  Wis.  20, 
47  N.  W.  947)  393 

V.  Erhard  (83  N.  Y,  74)  228 

Zell's  Appeal  (126  Pa.  329,   17  Atl. 

647)  202 

Zent  V.  Heart  (8  Barr  337 )  1 59 

Zollar  V.  Janvrin  (47  N.  H.  324)    403,  407 
Zuel  V.  Bowen  (78  111.  234)  170 


/ 


A  TREATISE 


ON    THE 


LAW  OF  PARTNERSHIP. 


THE    LAW   OF   PARTNERSHIP. 


CHAPTER  I. 

DEFINITION    AND    NATURE   OF   A    PARTNERSHIP. 

§  1.  Definition  of  Partnership.  —  Partnership  is  a  legal  entity 
formed  by  the  association  of  two  or  more  persons  for  the  purpose 
of  carrying  on  business  together  and  dividing  its  profits  between 
theiu.^ 

The  word  "  firm  "  is  often  used  synonymously  with  "  partner- 
ship," thougii  it  might  better  be  restricted  to  its  original  meaning, 
the  partners  or  members  of  the  partnership  taken  collectively. 
As,  however,  the  distinction  is  not  made  by  the  courts  it  is 
perhaps  useless  to  insist  upon  it ;  and  the  two  words  will  in  the 
following  pages  be  used  synonymously.^ 

§  2.  Origin  of  Law  of  Partnership.  —  The  law  of  partnership,  as 
it  exists  in  England  and  in  this  country,  constitutes  a  system  liy 
itself.  Its  origin  cannot  be  found,  excepting  in  the  law  mer- 
chant, which  is  itself  only  the  custom  of  merchants,  adopted, 
systematized,  and  enforced  by  the  courts,  (a) 

(a)  Thus  the  peculiar  doctrines  of  the  of   the   business),   that    the    act   of   one 

law  of  partnership,  which  most  distinguish  partner,    in    reference    to    a    partnership 

it  from  the  common  law,  as  that  there  is  matter,  is  the  act  of  all,  are  declared  hy 

no   survivorship  of  property  or  rights  be-  the  eailiest  authorities  to   be  "per  lectern 

tween  partners  (except  for  the  settlement  mercatoriam,"   and    "pro    benejicio    com- 

1  This  is  the  definition  of  the  Civil  Code  of  New  York,  with  the  addition  of  the 
worls  "  a  legal  entity  formed  by."  It  was  criticised  by  Jessel,  M.  R.,  in  Pooley  v. 
Driver,  5  Ch.  D.  458,  on  the  ground  that  it  allows  the  formation  of  a  partnership  for 
an  illegal  purpose.  But  an  association  for  an  illegal  business  would  evidently  be  a 
partnership,  though  an  illegal  one.  See  post,  §  8,  note.  A  collection  of  the  definitions 
which  have  been  proposed  for  a  partnership  may  be  found  in  1  Lindl.  Part.  p.  1 . 

2  There  can  be  no  firm  without  at  least  two  partners.  Therefore  in  a  State  where 
an  action  is  allowed  to  be  brought  against  a  partnershi])  in  the  firm  name  the  action 
altogether  fails  if  the  business,  though  carried  on  under  the  name  of  A.  &  Co.,  is 
owned  by  A.  alone,     Stirling  v.  Heintzman,  42  Mich.  449,  4  N.  W,  165. 

1 


2  THE   LAW   OF   PARTNERSHIP.  [CH.    I. 

Commercial  partnerships  were  known  to  the  Romans  ;  and 
their  hiw  recognized  and  regulated  tliem.  So  far  as  commerce 
was  then  conducted  in  a  similar  manner  and  upon  similar  prin- 
ciples as  at  present,  the  rules  of  the  Roman  law  are  applicable 
now ;  for  that  law,  quite  as  much  as  our  own,  applied  to  tlie 
transactions  of  merchants  a  law  founded  upon  their  usages ;  and 
to  this  extent  we  may  regard  the  Roman  civil  law  of  partnership 
as  similar  to  our  own.  As  a  very  large  part  of  commercial  busi- 
ness consists  in  forming  and  executing  contracts  whicli  must  be 
governed  by  the  law  of  contracts  generally,  and  this  is  a  part  of 
the  common  law,  many  of  the  principles  applicable  to  partnership 
are  the  same  as  those  which  regulate  the  common  transactions  of 
men  ;  and  so  far  the  law  of  partnership  may  be  said  to  be  founded 
upon  the  common  law.  We  doubt,  however,  whether  anything 
is  gained  by  references  of  this  kind.  The  supposed  analogies 
between  the  law  of  partnersliip  and  other  branches  of  the  law,  if 
they  sometimes  afford  ample  illustration,  lead  to  confusion  and 
error  when  we  attempt  to  carry  them  far;  or,  by  their  help, 
deduce  from  other  departments  of  the  law  a  rule  which  may 
control  and  determine  a  question  of  partnership. 

§  3.  Mercantile  Idea  of  Partnership.  —  That  a  partnership  is  an 
entity,  distinct  from  the  partners,  is  the  view  of  the  business  world 
everywhere.  Merchants  and  accountants  alike  look  upon  a  firm 
as  a  body  which  has  independent  rights,  as  well  against  its  mem- 
bers as  against  strangers.  Accountants  credit  the  partners  with 
advances  on  the  books  of  the  firm,  and  debit  them  with  over- 
drafts, the  accounts  being  kept  between  each  partner  individually 
and  the  firm,  not  between  the  partners. 

Since  the  law  of  partnership  is  founded  upon  the  law  merchant, 
that  is,  the  custom  of  merchants,  we  should  expect  to  find  the 
mercantile  conception  of  a  partnership  recognized  by  the  law. 
And  such  is  the  state  of  the  law  in  those  European  countries 
where  the  civil  law  is  in  force,  as  for  instance  in  Scotland,'  and 
in  Louisiana,  where  the  Code  is  founded  on  the  civil  law.^     We 

mnrcii."     Jenkins,  160  ;    Co.  Litt.   182  a  ;  are  two  joint  trailers,  and  one  accepts  a 

2  Brown,  99  ;  Jeffreys  v.  Small,  1  Vernon,  bill  drawji  on  botli  for  him  and  partner, 

217;  Leaker.  Craddock,  3  P.  Wms.  158;  it  binds  both   if   it  concerns  the   trade; 

Vanheath  v.  Tnrner,  Winch.  24  ;    Molloy,  otherwise,  if  it  concerns  the  acceptor  only 

b.  2,  ch.  10,  §  19.     The  case  of  Pinckney  in  a  distinct  interest  and  respect." v. 

V.  Hall  is  thus  reported  in  1  Salk.  126  :  Laytield,    1    Salk.   292.     See  also  2  Rol. 

"By  the  custom  of  England,  where  there  Abr.  702,  370  ;  Anon.,  Styles,  370  A. 

J  Bell,  Principles,  §  357. 

2  Succession  of  Pilcher,  39  La  Ann.  362,  1  So.  929  ;  Liverpool,  B.  &  R.  P.  Nav.  Co. 
V.  Agar,  14  F.  R.  615,  4  Woods,  20L 


§  4.]  DEFINITION    AND   NATURE   OP   A    PARTNERSHIP.  3 

have  seen  that  the  civil  law  of  partnership  was  founded,  equally 
with  our  own,  upon  the  custom  of  merchants,  and  there  should 
therefore  be  no  difference  in  this  respect  between  the  rules  of  the 
civil  law  and  those  of  our  own. 

§  4.  How  far  recognized  by  Law.  —  In  our  law,  however,  the 
partnership  has  not  been  clearly  recognized  as  an  entity.  In  an 
action  at  law,  at  least,  the  partners  alone  are  recognized  as  parties 
in  interest,  as  owners  of  the  firm  property,  and  as  principals  in  the 
firm  business.  Yet  even  at  law  certain  doctrines  are  held  which 
can  be  consistently  explained  only  by  recognizing  the  firm  as 
an  entity.  The  courts  of  equity  show  more  recognition  of  the 
true  character  of  a  partnership ;  but  even  in  equity  this  has  not 
been  made  clear  until  recently.  There  is  now,  however,  a  strong 
disposition  on  the  part  of  the  courts  to  recognize  the  mercantile 
doctrine. 

Perhaps  the  earliest  statement  of  the  doctrine  was  by  Horn- 
blower,  C.  J.,  in  Curtis  v.  Hollingshead.^  "The  firm  is  the 
contracting  party,  not  the  individuals  composing  the  firm ;  the 
credit  is  given  to  the  firm;  the  partnership,  the  ideal  person, 
formed  by  the  union  of  interest,  is  the  legal  debtor.  A  partner- 
ship is  considered  in  law  as  an  artificial  person^  or  heing^  distinct 
from  the  individuals  composing  it." 

The  doctrine  was  well  stated  by  Jessel,  M.  R.,  in  Pooley  v. 
Driver.2  "  Everybody  knows  that  partnership  is  a  sort  of  agency, 
but  a  very  peculiar  one.  You  cannot  grasp  the  notion  of  agency, 
properly  speaking,  unless  you  grasp  the  notion  of  the  existence  of 
the  firm  as  a  separate  entity  from  the  existence  of  the  partners  ; 
a  notion  which  was  well  grasped  by  the  old  Roman  lawyers,  and 
which  was  partly  understood  in  the  courts  of  equity  before  it  was 
part  of  the  whole  law  of  the  land,  as  it  is  now.  But  when  you 
get  that  idea  clearly,  you  will  see  at  once  what  sort  of  agency  it 
is.     It  is  the  one  person  acting  on  behalf  of  the  firm."  ^ 

1  2  Green  (N.  J.)  Law  403,  410  (1834).  See  Faulkner  v.  Whitaker,  3  Green  Law 
438,  439. 

'  5  Ch.  D.  458,  476. 

8  Language  as  clear  as  this  has  been  used  to  describe  a  firm  by  some  of  the  ablest 
judges  in  this  country.  "  When  one  joins  a  partnership  he  makes  himself  a  part  of 
an  entity  already  existing,  which  has  acquired  certain  property  and  business,  and  in 
acquiring  it  has  incun-ed  certain  indebtedness.  The  firm  owns  the  property,  holds  the 
business,  and  owes  the  debts."  Brewer,  J.,  in  Cross  v.  Burlington  Nat.  Bank,  17  Kas. 
336,  340. 

' '  The  partnership  for  most  legal  purposes  is  a  distinct  entity,  —  having  its  own 
property,  capable  of  contracting  separate  debts,  having  the  right  to  sue  in  equity  its 
several  members,  and  to  be  protected  against  their  conduct  to  the  same  extent  that  it 
might  be  against  the  conduct  of  strangers."  Cooley,  J.,  in  Robertson  v,  Corsett,  39 
Mich.  777,  784. 


4  THE  LAW   OF   PARTNERSHIP.  [CH.   I. 

§  5,  Relation  between  Partners  and  Partnership.  —  The  relation 
between  the  partners  and  the  firm  is  that  of  agent  to  principal; 
and  the  firm  property,  the  legal  title  to  which  is  held  by  the  part- 
ners, is  in  trust  for  the  firm.  Each  partner,  in  doing  an  act 
which  is  within  the  scope  of  his  agency,  is  acting  therefore  for  the 
firm.  It  is  ordinarily  said  that  the  partners  are  agents  for  each 
other ;  each  partner  when  carrying  on  business  being  principal  as 
to  his  own  interest  and  agent  as  to  the  interests  of  his  partners. 
A  more  exact  conception  of  the  transaction  is  however  that 
already  indicated :  that  each  partner  acts  not  as  principal  on  his 
own  account  and  also,  in  the  same  transaction,  as  agent  for  his 
copartners ;  but  that  he  acts  in  the  single  capacity  of  agent  for 
the  partnership,  and  neither  for  himself  nor  for  his  copartners. 

"A  partnership,  or  joint  stock  company,  is  just  as  distinct  and  palpable  an  entity 
in  the  idea  of  the  law,  as  distinguished  from  the  individuals  composing  it,  as  is  a 
corporation  ;  and  can  contract  as  an  individualized  and  unified  party,  with  an  individ- 
ual person  who  is  a  member  thereof,  as  effectually  as  a  corporation  can  contract  with 
one  of  its  stockholders.  The  obligation  and  the  liability,  inter  partes,  are  the  same  in 
the  one  case  as  the  other.  The  only  practical  difference  is  a  technical  one,  having 
reference  to  the  forum  and  form  of  remedy."  Barrett,  J.,  in  Walker  v.  Wait,  50  Vt. 
668,  676.  See  also  Forsyth  v.  Woods,  11  Wall.  484  ;  Goldsmith  v.  Eichold,  94  Ala. 
116,  10  So.  80  ;  In  re  Dennery,  89  Cal.  101,  26  Pac.  639  ;  Bracken  v.  Dillon,  64  Ga. 
243,  251  ;  Drucker  v.  Wellhouse,  82  Ga.  129,  8  S.  E.  40 ;  Henry  v.  Anderson,  77  Ind. 
361  ;  Paige  v.  Paige,  71  la.  318,  32  N.  W.  360;  Roop  v.  Herron,  15  Neb.  73,  80; 
Whitman  v.  Keith,  18  Oh.  St.  134,  144  ;  Trumbo  v.  Hamel,  29  S.  C.  520,  8  S.  E.  83. 
In  some  of  these  cases  a  statute  provided  that  the  partnership  might  sue  and  be  sued 
by  its  name.  This  statute,  however,  since  it  applied  only  to  the  remedy,  could  not 
change  the  nature  of  a  partnership.  If,  as  is  everywhere  decided,  it  is  an  entity  in 
the  eye  of  the  law  after  such  a  statute,  it  must  really  have  been  so  before  the  passage 
of  the  statute. 


§«■] 


HOW   PARTNERSHIP   MAY   BE   MADE. 


CHAPTER  II. 


HOW   PARTNERSHIP   MAY   BE   MADE. 


§  6.  Partnership  by  Express  Contract.  —  There  must  be  a  lawful 
aud  valid  agreement  to  enter  into  partnership  ;  and  this  contract 
must  be  executed.  And  therefore  courts  do  not  declare  persons 
to  be  partners  under  an  agreement  of  partnership,  without  proof 
that  some  joint  transactions  have  been  undertaken  in  accordance 
with  it,  or  some  joint  benefit  received,  (a)  But  a  partnership  may 
be  made  by  an  agent ;  and,  if  by  one  not  then  an  agent,  a  sub- 
sequent ratification  mai<es  the  partnership  effectual,  {aa)  Xot 
unt'requently  in  England,  and  more  rarely  here,  the  contract  is 
sealed ;  but  this  can  seldom  be  useful,  and  is  never  necessary  to 
its  validity.  Usually  the  contract  is  in  writing;  and  should 
always  be  so,  as  a  matter  of  reasonable  precaution.      But  writing 


{a)  Metcalf  v.  Royal  Exch.  Ass.  Co., 
Barnard.  343  ;  Heylioe  v.  Barge,  9  C.  B. 
431  ;  W'est  Point  Foundry  Association  v. 
Brown,  3  Edw.  Ch.  284  ;  Atkins  v.  Hunt, 
14  N.  H.  205  ;  Goddard  v.  Pratt,  16  Pick. 
412.  If  two  or  more  persons,  who  agree 
to  enter  into  partnership,  stipulate  each  to 
furnish  a  certain  amount  of  capital,  com- 
pliance with  this  stipulation  may  be  a 
condition  precedent,  without  the  fulfilment 
of  whicdi  no  partnership  will  exist,  unless 
it  be  waived  by  the  consent  of  both  parties. 
McGraw  v.  Pulling,  1  Freem.  Ch.  357; 
Bird  V.  Hamilton,  Walker  Ch.  361. 
Where  E.  advanced  money  to  W.,  to 
enable  him  to  perfect  and  realize  a  certain 
invention,  and  W.,  besides  expressly  promis- 
ing to  repay  the  advance,  agreed  that,  if  the 
invention  should  be  one  of  public  or  pri- 
vate use,  W.  should  have  one-third  of  the 
profits  thereof ;  it  was  held  that  E.  might 
sue  W.  for  the  sum  so  advanced.  Elgie  v. 
Webster,  5  M.  &  W.  518.  So  in  Burnell 
r.  Hunt,  5  Jur.  650,  where  B.  was  to 
receive  from  A.,  for  superintending  the 
latter's  manufactory,  half  the  profits  as 
soon  as  any  accrued,  and,  till  that  time, 
21.    per  week.      No   profits   having    ever 


arisen,  the  court  held  that  there  could  be 
no  partnership  before  that  time.  If  a  man 
make  an  agreement  for  a  partnership,  but 
expressly  reserve  for  himself  for  twelve 
months  the  option  of  determining  finally 
whether  or  not  he  will  be  a  partner,  he  is 
not  one  until  he  exercises  that  option  and 
declares  himself  such.  Gabriel  v.  Evill, 
9  M.  &  W.  2H7.  See  Chapman  v.  AVilson, 
1  Rob.  (Va.)  267  ;  President,  Directors,  & 
Co.  of  the  Adams  Bank  v.  Rice,  2  Allen, 
480  ;  Andrews  v.  Garstin,  10  C.  B.  x.  s. 
444  ;  Lascaridi  v.  Gurney,  11  C.  B.  x.  s. 
890 ;  Moody  v.  Rathburn,  7  Minn.  89  ; 
Cook  V.  Carpenter,  34  Yt.  121.  W^here 
one  permits  another  to  bu}'  stock  on  their 
joint  account,  in  anticipation  of  forming  a 
I)artnership,  and  immediately  afterwards 
repudiates  the  agreement  to  become  a 
partner,  he  is  not  entitled  to  any  of  the 
property  bought,  nor  are  his  individual 
creditors.  Rice  v.  Shuman,  43  Pa.  37. 
See,  as  to  what  connection  in  business 
constitutes  a  partnership,  and  the  admis- 
sion of  new  members.  Mealier  v.  Cox,  37 
Ala.  201. 

(aa)  Williams  v.  Butler,  35  111.  544. 


THE    LAW    OF    PARTNERSHIP. 


[CH.    II. 


is  not  essential  to  render  the  general  agreement,  or  any  of  its 
details,  valid,  (b)  And  though  articles  exist,  the  partnership  may 
be  proved  by  parol,  if  the  question  is  between  those  who  form  the 
firm,  and  a  stranger,  [hh) 

Whether  a  partnership  exists  is  a  question  of  fact ;  what  a 
partnership  is,  is  a  question  of  law.  (c)  Sometimes  the  question 
occurs,  whether  the  provisions  of  a  partnership  come  within  the 
requirement  of  the  Statute  of  Frauds,  and  must  therefore  be  in 
writing.  [According  to  the  weight  of  authority,  a  partnership, 
even  if  formed  for  the  purpose  of  dealing  in  land,  may  be  created 
by  a  verbal  agreement :  though  according  to  some  authorities  it 
must  be  in  writing.]  (d) 


(li)  The  true  meaning  and  ajiplication 
of  this  rule  is  clearly  stated  by  Tiudal,  C. 
J.,  in  Fox  V.  Clifton,  9  Bing.  117.  See 
also  Smith  v.  Tarlton,  2  Barb.  Ch.  336. 

(bb)  Anderson  v.  ClaJ',  1  Stark.  405  ; 
Griffin  v.  Doe,  12  Ala.  783  ;  Widdifield  v. 
Widdifield,  2  Binn.  245  ;  Bounatfe  v. 
Fenner,  6  Sm.  &  M.  212  ;  Allen  v.  Rostain, 
11  S.  &  R.  362.  Otherwise,  perhaps, 
where  the  question  of  partnership  or  no 
partnership  arises  between  the  partners 
themselves.  Cutler  v.  Thomas,  25  Vt.  73. 
See  Buffurn  v.  Buffum,  49  Me.  108,  and 
Villa  V.  Jonte,  17  La.  Ann.  9. 

(c)  Gabriel  v.  Evill,  Car.  &  M.  358  ; 
Drake  v.  Elwyn,  1  Caines,  184  ;  Beechani 
V.  Dodd,  3  Harr.  (Del.)  485;  Doggett  v. 
Jordan,  2  Fla.  541  ;  Everett  v.  Chapman, 
6  Conn.  347 ;  Terrell  v.  Richards,  1  N.  & 
McC.  20.  See  Dwinell  v.  Stone,  30  Me. 
384. 

{d)  In  Smith  v.  Burnham,  3  Sumn. 
435,  the  plaintiff  brought  his  bill  in  equity, 
alleging  an  agreement  of  copartnership 
between  himself  and  the  defendant  for 
general  business  purposes,  and,  among 
others,  for  the  purchase  and  sale  of  lands, 
and  praying  for  a  general  account  of  the 
affairs  of  the  partnership.  The  existence 
of  the  partnership  was  attempted  to  be 
proved  only  by  parol.  Story,  J.,  held 
that  a  verbal  agreement  to  become  inter- 
ested as  ])artners  in  the  purchase  and  sale 
of  lands  was  a  parol  contract  respecting 
an  interest  in  lands  within  the  Statute  of 
Frauds,  and  therefore  void.  So  in  Vice  v. 
Anson,  7  B.  &  C.  409  ;  Henderson  i'.  Hud- 
son, 1  Mnnf.  510.  Lefevre's  Appeal,  69 
Pa.   123  ;    Ebbart's    Appeal,   70   Pa.    79. 


[Young  V.  Wheeler,  34  F.  R.  98  ;  Larkins 
V.  Rhodes,  5  Port.  195  ;  Everhart's  Appeal, 
106  Pa.  349  ;  Raub  v.  Smith,  61  Mich. 
543,  28  N.  W.  676.  In  Louisiana  a  writ- 
ten contract  of  partnership  is  required  by 
the  code  :  Pecot  v.  Annelin,  21  La.  Ann. 
667.]  But  in  Dale  v.  Hamilton,  5  Hare, 
369,  a  different  view  prevailed.  In  that 
case,  the  bill  of  the  jilaintiff,  a  land  agent 
and  surveyor,  alleged  a  jiarol  agreement  of 
copartnership  with  the  defendants,  who 
■were  capitalists,  for  the  sole  purpose  of 
speculation  in  lands  ;  and  that,  by  the 
terms  of  their  agreement,  each  of  the 
parties  was  to  be  interested  one-third  in 
profits  and  losses.  Real  estate  had  confess- 
edly been  ac(|uired  under  some  arrangement 
of  this  sort,  which  had  since  greatly  risen 
in  value.  The  prayer  of  the  plaintiff  was, 
that  the  affairs  of  the  joint  concern  might 
be  wound  up,  the  lands  sold  for  the  mo.sc 
they  would  fetch,  and  the  proceeds  distri- 
buted by  the  court  in  accordance  with  the 
terms  of  the  said  contract.  The  Vice- 
Chancellor  (after  a  statement  of  the 
question  raised)  said  :  "  When  the  prop- 
osition was  first  advanced  by  the  plaintiff, 
I  confess,  it  appeared  to  me,  that  to  admit 
the  argument  to  the  extent  contended  for 
would  be  virtually  to  repeal  the  Statute 
of  Frauds,  or  nearly  so."  But,  upon 
examination  of  the  authorities,  he  felt 
himself  bound  to  hold  that  the  plaintiff 
might  first  prove  by  parol  the  existence  of 
the  partnership,  as  an  independent  fact, 
and,  that  being  established,  might  then 
show  by  the  same  evidence  his  intej-est  in 
the  lands,  considered  as  the  substratum  or 
stock  of  the  partnership.     An  issue  was 


§7.] 


HOW    PARTNERSHIP   MAY   BE   MADE. 


It  becomes  more  important,  and  indeed  necessary,  that  the 
contract  should  be  reduced  to  writing,  in  proportion  as  it  is  com- 
posed of  many  articles,  and  {)rovides  in  detail  for  the  transaction 
of  the  business  of  the  firm,  or  for  the  rights  and  duties  of  the 
partners.  Of  the  effect  and  construction  of  written  articles  we 
shall  si)eak   particulai'ly  hereafter,  (f) 

§  7.  Partnership  without  Express  Agreement.  —  Partnership  may 
be  formed  not  only  by  express  agreement,  but  may  grow  out  of 
transactions  or  relations  in  which  the  word  "  partnership  "  is  not 
uttered.  If  there  is  such  a  joinder  of  interests  and  action  as  the 
law  considers  as  the  equivalent  of  partnership,  or  rather,  such  as 
it  regards  as  constituting  partnership,  it  will  give  to  the  persons 


accordingly  directed  to  determine  whether 
such  ail  agreement  of  copartnersliii)  as  that 
aUeged  ill  tlie  bill  had  been  made.  See 
Caddeck  v.  Simpson,  2  De  G.  &  J.  52  ; 
Fall  River  Whaling  Co.  v.  Borden,  10 
Cash.  458  ;  Haiipf  v.  Howard,  3  Jones  Eq. 
440,  445.  The  result  of  the  cases,  as  well 
as  of  true  reasoning  upon  the  question, 
would  seem  to  be  that  of  the  Vice-Chancel- 
lor in  Dale  v.  Hamilton,  supra.  In  re 
Warren,  Davies,  320  ;  York  v.  Clemens,  41 
la.  95  ;  Scruggs  v.  Russell,  McCah.  (Kas.) 
39  ;  Julio  V.  Ingalls,  1  All.  41  ;  Sherwood 
V.  R.  R.  Co.,  21  Minn.  127  ;  Chester  v. 
Dickeison,  54  N.  Y.  1  ;  Smith  v.  Tarlton, 
2  Barb.  Cli.  336  ;  Storer  v.  Flack,  41  Barb. 
1(51  ;  Jones  v.  McMichael,  12  Rich.  L. 
176.  [In  re  Ransom,  17  F.  R.  331 ;  Mc- 
Elroy  V.  Swope,  47  F.  R.  380  ;  Coward  v. 
Clanton,  79  Cal.  23,  21  Pac.  359  ;  Meagher 
V.  l{ee<l,  14  Col.  335,  24  Pac.  681  ;  Bunnel 
V.  Taintor,  4  Conn.  568  ;  Holmes  v.  Mc- 
Ciay,  51  Ind.  358  ;  Richards  v.  Grinnell, 
63  la.  44,  18  N.  W.  668  ;  Peunybacker  v. 
Leary,  65  la.  220,  21  N.  W.  575  ;  Collins 
V  Decker,  70  Me.  23  ;  Somerby  v.  Bun- 
tin,  118  Mass.  279  ;  Newell  v.  Cochran, 
41  Minn.  374,  43  N.  W.  84  ;  Hirbour  v. 
Rtieding,  3  Mont.  13  ;  Personette  v.  Piyme, 
34  X.  J.  Eq.  26;  Flowers.  Barnekoff,  20  Ore. 
132,  25  Pac.  370  ;  Case  v.  Seger,  4  Wash. 
St.  492,  30  Pac.  646.  See  also  Allison  v. 
Perry,  130  111.  9,  22  N.  E.  492  ;  Marsh  v. 
Davis,  33  Kas.  326,  6  Pac.  612  ;  Carr  v. 
Leavitt,  54  Mich.  540.  In  Wisconsin  it 
is  held  that  where  a  partnership  is  formed 
for  another  purpose,  and  the  partners  agree 
verbally  to  buy  land  and  take  the  title  in 
the  name  of  one  parttier,  the  other  is  pre- 


vented by  the  Statute  of  Frauds  from 
claiming  any  interest  in  the  land.  Bird 
V.  Morrison,  12  Wis.  138  ;  Clarke  o.  Mc- 
Aulitle,  81  Wis.  104,  51  N.  W.  Rep.  83. 

It  has  been  held  that  a  contract  of  part- 
nership to  continue  7iiore  than  a  year  is 
within  that  provision  of  the  Statute  of 
Frauds  which  requires  contracts  not  to  be 
performed  within  a  year  to  be  in  writing. 
Morris  r.  Peckhara,  51  Conn.  128  ;  Jones 
V.  McMichael,  12  Rich.  176.  Such  a  con- 
tract, though  not  in  writing,  has,  however, 
elsewhere  been  held  valid.  McKay  v. 
Rutherford,  6  Moo.  P.  C.  413,  13  Jur.  21  ; 
Smith  V.  Tarlton,  2  Barb.  Ch.  336  ;  Jordan 
V.  Miller,  75  Va.  442. 

There  can  be  no  doubt  that  the  pre- 
vailing view  is  the  better  one.  The  con- 
tract is  executed  when  the  partnership 
relation  is  entered  into.  All  that  is  done 
after  that  is  done  by  and  for  the  part- 
nership. If  land  is  purchased  it  is  the 
land  of  the  partnership,  and  not  of  the 
individual  partners.  In  short,  the  only 
action  that  could  be  brought  for  breach  of 
the  contract  would  be  an  action  for  failure 
to  launch  the  partnership  :  any  cause  of 
action  arising  after  the  partnership  was 
formed  would  arise  out  of  the  partnership 
relation. 

If,  however,  the  contract  calls  for  the 
purchase  of  land  by  one  party  from  the 
other  before  the  partnership  comes  into 
existence  it  is  within  the  statute.  Clancy 
V.  Craiiie,  2  Dev.  Eq.  363.  And  a  contract 
which  called  for  the  entrance  into  a  part- 
nership after  the  expiration  of  a  year  would 
doubtless  lie  held  to  be  within  the  statute.] 

(e)  Post,  §  159  ct  scq. 


8  THE   LAW   OF   PARTNERSHIP.  [CH.    II. 

engaged  in  it  all  the  rights,  and  lay  upon  them  all  the  responsi- 
bilities, and  give  to  third  parties  dealing  with  them  all  the 
remedies,  which  belong  to  partnership.  Of  this  we  shall  treat 
somewhat  in  the  succeeding  chapters. 

§  8.  Illegal  Partnerships.  — That  the  Contract  may  be  legal,  it 
must  be  formed  for  a  legal  purpose.  (,y)  It  is  obvious  that  the 
law  —  through  the  courts  —  cannot  protect  or  enforce  what  the 
law  forbids.  Hence  a  partnership  would  be  deemed  illegal,  not 
only  if  it  contemplated  a  business  which  the  law  expressly  pro- 
hibits, as  smuggling,  gambling,  making  counterfeit  bills  or  false 
coin  to  be  used  at  home,  or  stealing,  but  also  if  it  were  formed  for 
a  purpose  distinctly  opposed  to  the  principles  or  policy  of  the  law  ; 
as,  to  procure  the  election  of  persons  to  office,  or  the  success  of  a 
political  party,  or  for  marriage  brokerage,  {h)  ^ 

(ij)  The  English  law  has  at  different  regulating  the  jjawnbrokers'  trade.  See 
periods  laid  various  restrictions  upon  the  Armstrong  v.  Lewis,  2  C.  &  JI.  274 ; 
formation  of  partnerships,  some  designed  Armstrong  v.  Armstrong,  2  Mylne  &  K. 
to  secure  monopolies  to  one  or  several  45  ;  Gardon  r.  Slowden,  12  Clark  &  F. 
large  incorporated  companies,  and  which  237.  There  have  also  been  certain  re- 
have  since  been  repealed  or  greatly  modi-  strictive  statutes,  which  have  been  passed 
fied,  while  others  liave  aimed  at  the  more  rather  to  protect  the  revenue  of  tlie  realm 
laudable  object  of  protecting  the  public  than  to  afford  security  to  the  public, 
from  the  combinations  and  the  delusive  Hence  it  is  held,  in  several  cases,  that, 
schemes  of  speculators.  Thus  the  statute  though  a  partnership  be  formed  in  disre- 
of  6  Anne,  ch.  22,  §  9,  made  it  unlawful  gard  of  the  provisions  of  these  statutes, 
for  a  partnership  of  more  than  six  persons,  yet  such  infringement  will  not  deprive  the 
other  than  the  Bank  of  England,  to  carry  partnership  of  the  right  to  recover  upon 
on  banking  business.  By  6  Geo.  1,  ch.  18,  their  contracts  with  third  jiersons.  Hodg- 
§  12,  partnerships  were  forbidden  to  engage  son  v.  Temple,  5  Taunt.  181.  Johnson  v. 
in  the  business  of  marine  insurance,  or  to  Hudson,  11  East,  180  ;  Brown  v.  Duncan, 
make  loans  upon  bottomry.  In  like  man-  5  B.  &  C.  93.  [See  the  statutes  collected 
ner,  by  28  Geo.  3,  ch.  53,  §  2,  partnerships  and  discussed,  1  Lindley,  Part.  *94  et  seq.] 
of  more  than  five  persons  for  trading  in  (h)  A  distinction  was  formerly  made 
lands  are  made  illegal.  See  further  6  Geo.  1,  between  contracts  of  partnership  for  ob- 
ch.  18,  §  18  ;  also,  39  &  40  Geo.  3,  ch.  99,  jects  which  are  viala  in  se  and  those  for 

^  It  is  now  everywhere  acknowledged  that  the  courts  will  not  recognize  an  illegal 
contract  of  partnership,  either  by  enforcing  performance  of  the  whole  contract,  Ewing 
V.  Osbaldiston,  2  My.  &  Cr.  53;  Durant  v.  Rhener,  26  Jlinn.  362,  4  N.  W.  610;  or 
by  enforcing  the  obligation  to  account.  Sykes  v.  Beadon,  11  Ch.  D.  170;  Bartle  v. 
Coleman,  4  Pet.  184  ;  Snell  v.  Dwight,  120  Mass.  9  ;  Dunham  v.  Presby,  120  Mass. 
285  ;  Jackson  v.  McLean,  100  Mo.  130,  13  S.  W.  393  ;  Read  v.  Smith,  60  Tex.  379. 

Some  courts  however  allow  a  partner  in  an  illegal  partnership,  after  the  business 
has  been  entirely  wound  up,  the  right  to  a  share  of  such  proceeds  of  the  business  as  remain 
in  his  copartner's  hands  ;  on  the  more  or  less  clearly  recognized  principle  that  there  is 
a  constructive  trust.  Sharp  v.  Taylor,  2  Phillip.s,  801  (criticised  adversely  in  Sykes  v. 
Beadon,  11  Ch.  D.  170)  ;  Brook.s  v.  Martin,  2  Wall.  70 ;  Wann  v  Kelly,  5  F-  R.  584  ; 
Attaway  v.  Third  Nat.  Bank.  15  Mo.  App.  577  ;  Pfeuffer  v.  j\Ialtby,  54  Tex.  454 
{wmble  ;  but  see  Kead  v.  Smith,  60  Tex.  379).  See  Snell  v.  Dwight,  120  Mass.  9,  18. 
In  Texas  the  court  interferes  only  if  there  has  been  an  account  stated,  and  a  note  given 


§M 


HOW   PARTNERSHIP   MAY    BE   MADE. 


§  9.  Partnership  must  be  Voluntary.  —  The  contract  of  partner- 
ship must  be  voluntary  ;  that  is,  all  the  partners  must  consent 

olijects  which  are  only  mala  prohlbita.     It  v.  Bignold,  5  B.  &  Aid.  335  ;  Mitchell  v. 

was  held  that  contracts  arising  out  of  the  Cockburne,  2  H.  Bl.  379  ;  Aubert  v.  Maze, 

transactions  of  a  partnership,   formed  for  2   B.   &    P.   371  ;    Ewing   v.  Osbaldistou, 

purposes  which  werg  inhibited  by  positive  2    My.    &  Cr.   53.      See   also   Cannan    v. 

statute  merely,  might   be   recognized  and  Bryce,  3  B.  &  Aid.  179,  Steers  ?;.  Lashley, 

enforced  by  the  courts,  if  they  were  one  6  T.  R.  61  ;  Brown  v.  Turner,  7  T.  K.  630  ; 

step  removed  from  the  illegal  contract  itself.  Webb  v.  Brooke,  3  Taunt.  6;  Simpson  v. 

jKc/jrtrte  Balmer,  13  Ves.  313;  Faikney  y.  Bloss,   1  Taunt.  246;    Ottley  v.  Browne, 

Reynous,  4  Burr.  2069  ;  Petrie  v.  Haniiay,  1   Ball  &  B.  360  ;   Ex  farte   Randleson, 

3  T.  R.  418  ;  Watts  v.  Brook,  3  Ves.  612.  1  Mont.  &  M'A.  36,  and  cases  cited.     Nor 

See  also  Berkshire  v.  Evans,  4  Leigh,  223.  will  the  courts  any  more  sustain  an  action 

But  these  cases  were  in  conflict  with  i>re-  brought  in  revocation  and  disaffirmance  of 

vious  adjudication,  and  cannot  be  regarded  an  illegal  contract  of  partnership.      Booth 

as  decided  upon  sound  principles.     Sulli-  v.   Hodgson,  6  T.   R.  405;   Ex  parte  Bell, 

van  V.  Greaves,  Park  on  Ins.  8  ;  Bensley  1  M.  k  S.  751. 

for  the  balance.  Boggess  v.  Lilly,  18  Tex.  200;  De  Leon  v.  Trevino,  49  Tex.  88; 
Kead  v.  Smith,  60  Tex.  379.     See  also  McGunn  v.  Hanlin,  29  Mich.  476. 

But  by  the  weight  of  authority  a  bill  for  an  account  will  not  lie  in  case  of  an 
illegal  partnership,  though  the  business  is  wound  up  and  the  assets  are  all  in  the  hands 
of  the  defendant  partner.  IJveret  v.  Williams,  1  Lind.  Part.  *  93  n.  ;  Sykes  v.  Beadon, 
11  Ch.  D.  170  (scmUc);  Craft  v.  McConoughy,  79  111.  346  ;  Hunter  v.  P'feitfer,  108  Ind. 
197  ;  Snell  v.  Dwight,  120  Mass.  9,  18  (semble)  ;  Jackson  v.  McLean,  100  Mo.  130,  13 
S.  yV.  393  ;  Todd  v.  Rafferty,  30  N.  J.  £((.  254 ;  Woodworth  v.  Bennett,  43  X.  Y. 
273 ;  King  v.  Winants,  71  N.  C.  469  ;  Watson  r.  Fletcher,  7  Gratt.  1.  Nor  is  the 
action  allowed  though  an  account  has  been  stated,  and  the  defendant  has  expressly 
agreed  to  pay  the  balance.  Stewart  v.  Mcintosh,  4  H.  &  J.  233  ;  Patterson's  Appeal, 
13  W.  N.  C.  154  ;  Morris  Run  Coal  Co.  v.  Barclay  Coal  Co.,  68  Pa.  173.  And  though 
the  business  was  legal  where  it  was  carried  on,  the  courts  of  a  State  in  which  it  is  regarded 
as  against  public  policy  will  not  entertain  a  bill  for  an  account.  Watson  v.  Murra\',  23 
N.  J.  Eq.  257.  But  though  erpiity  will  not  sustain  a  bill  for  an  account  of  illegal  partner- 
ship transactions,  yet,  if  a  part  of  the  business  of  the  partnershij)  be  legal  and  a  part 
illegal,  an  account  of  that  which  is  legal  may  be  directed  ;  as  where  the  business  of  a  firm 
was  that  of  brokers  and  underwriters,  the  court  dismissed  so  much  of  the  bill  as  sought 
for  an  account  of  the  profits  of  the  underwriting  business,  but  decreed  an  account  of 
the  other  business.  Knowles  v.  Haughton,  11  Ves.  168;  Anderson  r.  Powell,  44  la. 
20  ;  Willson  v.  Owen,  30  Mich.  474.  And  where  the  business  was  legal  when  the 
partnership  was  formed,  but  was  afterwards  forbidden  by  statute,  a  partner  may  have 
an  accounting  as  to  the  business  done  before  the  statute  came  into  effect.  Bennett  v. 
Woolfolk,  15  Ga.  213. 

Where  it  appears  that  the  profits  of  the  firm  were  swelled  by  cheating  customers, 
the  fact  is  no  defence  to  a  bill  for  an  account  brought  by  the  innocent  partner.  Todd 
V.  Pennington,  21  Atl.  297  (X.  J.).  And  it  has  been  held  that  even  if  both  parties 
were  concerned  in  the  fraud  upon  customers,  a  bill  will  lie  whenever  the  partnership 
was  foi'med  for  a  legal  purpose.  Shriver  v,  McCloud,  20  Neb.  474,  30  N.  W.  534.  In 
Illinois,  on  the  other  hand,  where  one  member  of  a  legal  partnership  received  bribes 
in  the  course  of  the  firm  business  the  other  partner  was  held  not  to  be  entitled  to  an 
account  of  the  money  thus  received.  Northrup  v.  Phillips,  99  111.  449.  Where  the 
business  of  pawnbrokers  was  carried  on  by  two  persons  under  a  deed  of  partnership, 
but  under  the  apparent  conduct  and  in  the  name  of  one,  and  he  only  was  licensed, 
semble,  that  although  the  parties  might  have  made  .themselves  liable  to  the  penalties 


10  THE    LAW    OF    PARTNERSHIP.  [CH.    II. 

and  ag-ree  to  it.  This  is  so  essential,  that  no  person  can  be  intro- 
duced into  a  firm  without  the  consent  of  all  who  are  members  of 
it,  (k)  This  consent  may  be  implied  ;  (l)  and  even  if  one  or  more 
members  were  reluctant,  and  made  objections,  and  never  expressly 
gave  their  assent,  still  it  might  be  inferred  from  their  acts,  if  tlie 
alleged  partner  or  partners  were  treated  by  the  other  partners 
and  in  their  transactions  as  only  a  partner  could  be  or  should  be 
treated.  (11)  Still  there  must  be  this  consent ;  and  we  shall 
presently  see  that  if  a  partner  sells  out  all  his  interest  in  a  firm 

(k)   Ex  parte   Barrow,    2   Rose,    255  ;  lations  in  the  articles  of  association  that 

Kingman  v.  Spurr,  7  Pick.    235  ;  Murray  heirs  or  representatives  sViould  themselves 

V.    Bogert,    14   Johns.    318 ;    Channel   v.  be   partners.      Otherwise  in    the    English 

Fassit,  16  Ohio,  166  ;  Moddewell  v.  Keever,  and  American  law.     See  post,  §  106. 
8   W.  &  S.    63  ;     NicoU    v.  Munitbrd,    4  (l)  Mason  v.    Connell,   1    Whart.   381. 

Johns.  Ch.    522.     Partnershijis  inter  sesc  The  ijuestion   in  this  case  was,   whether 

can  only  be  formed  by  the  contract  of  the  the  firm   of  A.  &  B.  was  partner  with  C. 

parties.   '  Freeman  v.   Bloomfield,   43  Mo.  The  evidence  oH'ered  on  this  point  was  a 

391 ;  Metcalf  v.  Redmon,  43  111.  264.     See  written    agreement   of     copartnership    to 

Brown  v.  De  Tastet,  Jacob,  284  ;   Bray  r.  which  was  signed  the  name  of  C,  and  also 

Froniont,  6  Madd.  5;  Mathewson  y.  Clark,  the  name  of  the  firm  of  A.  &  B.,  in  the  hand- 

6  How.  122  ;  Goddard  v.  Hodges,  1  Ci-.  &  writing  of  A.     It  was  held  that  engaging 

M.   33.      Upon  this  principle  of  diledus  the  firm  in  such  a  partnershij)  was  out  of 

personcc,  neither  the  representatives  of  a  the  ordinary  commercial  transactions,  and 

deceased  partner,  nor  the  assignees  of  one  was  therefore  presumed  to  be  without  the 

bankrupt,  become  partners  with  the  sur-  scope  of  one   partner's   authority.      But, 

viviiig  or  solvent  partners,  but  are  simply  though  the  consent  of  each  partner  was 

entitled  to  an  account.     Pearce  v.  Cham-  absolutely  necessary  to  constitute  a  part- 

berlin,   2  Ves.    33  ;    Marquand  v.   N.  Y.  nership,  yet  that  such  consent  might  be 

Man.    Co.,    17  Johns.    525  ;    Griswold  v.  testified  in  express  terms,   or  the  assent 

Waddington,  15  Johns.    82.     [Noonan   v.  might   be  tacit,    or  to  be  implied  solely 

Nunan,  76  Gal.  44,  18  Pac.  98.]  In  the  from  the  acts  and  conduct  of  the  parties, 
civil  law,  the  doctrine  was  even  carried  to  {11)  Pierce  v.  Whitley,  39  Ala.  172. 

the  length  of  making  null  and  void  stipu- 

imposed  by  39  &  40  Geo.  3,  ch.  99,  yet  that,  it  being  no  part  of  the  contract  to  carry 
on  the  partnership  in  such  a  manner  as  to  contravene  the  law,  the  contract  was  not 
void  ;  but  that,  had  a  collateral  agreement  to  carry  on  the  partnership,  in  violation  of 
the  act  of  parliament,  been  proved,  no  rights  could  have  been  acquired  under  it  by 
either  party.     Armstrong  v.  Lewis,  2  Cr.  &  M.  274. 

It  is  clear  that,  at  least  as  to  third  persons,  the  title  to  property  is  recognized  as  in 
the  partnership.  Crescent  Ins.  Co.  v.  Bear,  23  Fla.  50,  1  So.  318  ;  Tucker  v.  Adams, 
63  N.  H.  361.  Real  estate  standing  in  the  name  of  both  partners  belongs  to  them  in 
common.     Watson  v.  Fletcher,  7  Gratt.  1. 

It  has  been  held  that  an  association  to  build  a  railroad,  by  pr-ocuring  a  charter  for  a 
corporation  of  which  the  partners  should  be  the  stockholders,  and  then  making  a 
contract  for  construction  between  the  corporation  and  the  partnership  liy  which  the 
stock  and  bonds  of  the  railroad  should  be  given  to  the  latter  and  sold  by  it,  was  formed 
for  a  fraudulent  purpose,  and  was  therefore  illegal.  Jackson  v.  McLean,  100  Mo.  130, 
13  S.  W.  393.  On  the  other  hand  a  partnership  to  buy  land  at  a  tax  sale  is  not  illegal 
without  proof  that  it  was  formed  or  necessarily  tended  to  stifle  competition.  Dawson 
V.  Ward,  71  Tex.  72,  9  S.  W.  106. 


§   11.]  HOW   PARTNERSHIP   MAY    BE   MADE.  11 

to  a  third  person,  and  expressly  agrees  with  him  that  he  shall 
take  the  seller's  place  in  the  partnership,  this  will  not  make  him 
a  partner,  unless  the  other  partners  receive  him  as  such,  (w) 

If  the  articles  of  the  cojjartnership  provided,  somewhat  in  the 
way  those  of  joint-stock  companies  do,  that  a  copartner  might, 
in  a  certain  way,  and  upon  certain  terms,  transfer  all  his  interest 
and  rights  in  the  company  to  a  third  person,  who  should,  by  force 
of  the  transfer,  become  a  copartner  in  the  transferrer's  stead,  a 
(;()urt  of  equity  generally  woidd,  and  a  court  of  law  migiit,  so 
fur  recognize  the  force  of  this  }>rovision  as  to  hold  such  trans- 
feree partner  at  once,  (n)  It  is  certain,  however,  that  a  mere 
agreement  to  admit  a  new  member  into  a  partnershij),  like  an 
agreement  to  form  a  partnership,  (o)  however  expressed,  and  on 
whatever  consideration,  would  not  of  itself  invest  any  person  or 
persons  with  the  character  of  partners,  although  the  breach  of  it 
might  give  an  action  for  damages,  (p) 

We  shall  hereafter  see  that,  in  reference  to  transfer  and  to 
incoming  partners,  the  courts  pay  great  respect  to  that  "  dilectus 
personarum^''  by  which  partners,  who  are  so  much  in  the  power 
of  each  other,  may  protect  themselves  from  the  danger  of  having 
that  power  pass  into  hands  to  whom  they  would  not  willingly 
intrust  it.  {q) 

§  10.  Partnership  Agreement  vitiated  by  Fraud.  —  Every  contract 
that  is  vitiated  by  fraud,  or  by  coercion,  is  thereby  avoided  and 
annulled.  This  is  certainly  true  of  the  contract  of  partnership  ; 
and,  from  the  peculiar  character  of  the  relation  of  partners,  and 
of  their  almost  unrestricted  capacity  to  do  each  other  an  injury, 
it  may  be  thought  that  courts  would  be  peculiarly  watchful  to 
require  that  this  contract  was  formed  deliberately  and  freely,  and 
without  deception  or  undue  or  wrongful  influence,  (r) 

§  11.  Parties  must  be  competent.  —  So,  too,  that  the  contract  of 
partnership  may  be  lawful,  it  must  be  made  by  competent  parties ; 
that  is,  by  those  who  have  a  legal  right  to  enter  into  it.  And  we 
shall  hereafter  see  that  competency  to  enter  into  partnership  is 

(m)  See  post,  §  106.  89  ;  Byrd  v.  Fox,  8  Mo.  574.     See  post, 

(n)  Fox  V.  Clifton,  9  Bing.     15.     See  §  191. 
Kingman  v.  Spurr,  7  Pick.  236;    Alvord         (q)  See  2)ost,  §  106. 
V.  ^>mith,  5  Pick.  232  ;    Cochran  v.  Perry,  (r)  Tattersall   v.   Groote,    2   B.    &   P. 

8  W.  &  S.  262.     See  also  ;oos<,  §  107.  131;    Ex    parte    Broome,    1    Rose,    69; 

(o)  Wilson    V.    Caniphf'll,    5    Oilman,  Green   v.   Barrett,   1  Sim.  45  ;   Pillans  v. 

383  ;  Howell  v.  Brodie,  6  Bingham,  N.  C.  Harkness,   Colles   P.  C.    442  ;    Hynes   v. 

44.  Stewart,  10  B.  Mon.  429  ;  Howell  i-.  Har- 

(;>)    Figes    v.    Cutler,    3    Stark.    139;  vey,  5  Ark.  270;    Fogg  r.  Johnston,  27 

M'Neil  V.  Reid,  9  Bing.  68,  2  Moo.  &  Sc.  Ala.  432.     See  ;ws^  eh.  14. 


12  THE   LAW   OF   PARTNERSHIP.  [CH.    II. 

almost  or  quite  coextensive  with  a  competency  to  transact  business 
generally,  (s) 

§  12.  Time  of  beginning.  —  It  is  sometimes  important  to  deter- 
mine when  a  partnership  begins.  Usually,  this  is  determined  by 
the  contract  of  partnei'ship.  If  not,  it  would  ])robably  be  held  as 
presumption  of  law  that  it  began  when  the  written  articles  were 
executed.  (^)  But  even  if  in  the  contract  of  partnership  it  were 
expi-essly  stipulated  that  it  should  have  a  retrospective  effect,  and 
that  the  partnership  should  begin  a  certain  time  before  the  date, 
it  might  bind  the  parties  to  it,  for  some  purposes  at  least ;  but 
could  not  make  them  partners  at  the  time  stipulated,  in  refer- 
ence to  third  parties,  except  from  the  date,  (u) 

If  the  agreement  of  copartnership  is  executory  and  conditional, 
no  partnership  is  created  by  it  until  all  the  conditions  are 
fulfilled,  (v) 

In  one  case,  in  which  the  partnership  was  unlawful  if  entered 
upon  on  the  day  of  the  date  of  the  articles,  and  lawful  if  it  began 
three  months  afterward,  the  court  held  it  to  be  an  absolute  pre- 
sumption of  law  that  it  began  on  the  day  of  the  date,  although 
nothing  in  the  articles  specially  indicated  it.  And  the  court  re- 
fused evidence  that  the  bargain  and  intention  of  the  parties  was 
not  to  enter  upon  the  partnership  until  it  should  be  legal.  This 
case  seems  not  to  be  good  law  ;  although  it  would  be  proper 
to  exclude  evidence  which  contradicted  an  express  provision,  (w) 

(s)  See  post,  §  14.  be  not  executed  till  tlie  18th  of  January. 

(t)  Howell  V.  Brodie,  6  Bing.  N.  G.  Battley  v.  Bailey,  1  Scott  N.  R.  143. 
108  ;  Aspinwall  v.  Williams,  1  Ohio,  38  ;  (v)  Fox  v.  Clifton,  6  Bing.  776  ;  Dick- 
Austin  V.  Williams,  1  Ohio,  282  ;  Grant  v.  inson  v.  Valpy,  10  B.  &  C.  128  ;  Murray 
Watts,  10  Paige,  82  ;  Ingraliam  v.  Foster,  v.  Pilchards,  1  Wend.  ^8.  See  further 
31  Ala.  123  ;  Beaman  v.  Whitney,  20  Me.  Ward  v.  Thompson,  1  Newb.  Adm.  95  ; 
413.     [Guice  v.  Thornton,  76  Ala.  466.]  Bisset  on  Part.,  part  2d,  ch.  6  ;  Story  on 

{ii)  Thus,  where  A.  &  B.  who  were  al-  Part.,  §  150  ;  Avery  v.  Louve,  1  La.  Ann. 

ready  in  partnership,  agreed  on  the  24th  457  ;  post,  ch.  18.     See  Peck  v.  Thomas, 

of  June  to  become  partners  with  C,  and  29   Eng.   L.  &  Eq.    276.     [So  where  the 

it  was  farther  agreed  that  the  new  pait-  agreement  contemplates  the  obtaining  of 

nership  should  be  considered  as  commenc-  land,   fiom  which  the   partnership  is   to 

ing  from  the  18th  of  May  preceding  ;  held,  realize   its  profit,  the   partnershiji  would 

that  C.  was  not  liable  as  a  partner  upon  a  not  generally  begin   till  the   land  is  ob- 

bill  of  exchange  indorsed  by  the  firm  of  tained.     Snodgrass   v.  Reynolds,  79  Ala. 

A.  &  B.  upon  the  19th  of  May.     Vere  v.  452  ;   Meagher  v.  Reed,  14  Col.  335,  24 

Ashby,  10  B.  &  C.  288  ;  Wilsford  i'.  Wood,  Pac.  681. 

1  Esp.  1-82.  See  Dyke  v.  Brewer,  2  Car.  An  agreement  to  enter  into  a  partner- 
&  K.  828.  On  the  other  hand,  if  A.,  B.,  ship  in  the  future  does  not  make  the  par- 
and  C.  agree  to  enter  into  partnership  on  ties  partners :  thej'  do  not  become  so  until 
the  first  of  January,  and  from  that  time  the  agreement  is  performed  and  the  part- 
regard  themselves  as  partners,  the  partner-  nership  launched.  Goldsmith  v.  Sachs,  17 
ship  will  be  held  to  have  commenced  on  F.  R.  726,  8  Sawy.  110] 
that  day,  though  the  deed  of  partnership  {w}  Williams  v.  Jones,  5  B.  &  C.  108. 


§  13.]  HOW   PARTNERSHIP   MAY   BE    MADE.  13 

Where  the  partiicrshij)  was  not  formed  by  any  express  ajrree- 
meut,  written  or  oral,  but  implied  by  law  from  certain  joint 
transactions,  it  would  be  held  to  begin  when  these  transactions 
took  i>lace,  or  perhaps  when  the  agreement  to  enter  into  them 
was  formed,  (x)  Thus,  if  there  were  such  a  joint  buying  of 
property  with  the  intention  of  joint  selling,  as  would  make  the 
parties  partners  in  law  as  to  their  property  or  business,  they 
would  be  partners,  not  only  when  the  thing  was  bought,  but  they 
might  become  partners  as  to  this  ])urchase  by  their  agreement  to 
join  and  act,  although  no  responsibilities  as  partners  would  rest 
upon  them  until  something  was  done  to  carry  the  agreement  into 
effect.i 

§  13.  Jurisdiction  of  Partnership  Suits.  —  It  may  be  well  to 
remark,  in  this  connection,  that  courts  of  common  law  cannot 
take  cognizance  of  a  large  proj5ortion  of  the  cases  which  arise 
under  the  law  of  partnership.  Nearly  all  of  those  which  relate  to 
the  rights  and  obligations  of  partners  inter  se  go  into  a  court  of 
equity.  AVe  shall  hereafter  see  that  one  partner  can  sue  another 
at  law  only  in  a  few  exceptional  cases.  And  when  the  settlement 
of  the  affairs  of  a  partnership  is  required,  or  the  taking  of  an 
account,  or  the  prevention  or  discontinuance  of  some  wrongful 
act,  or  the  protection  or  enforcement  of  a  right  by  other  means 

See  Dix  v.  Otis,  5  Pick.  38  ;  Yassar  v.  partnership  between  the  defendants  and 
Camp,  14  Barb.  .356  ;  Bird  v.  Hamilton,  A.  and  B.  in  certain  publications  for 
"Walker  Ch.  361.  In  this  last  case  the  which  the  paper  was  furnished  and  used, 
contract  of  partnership  was  executed  the  put  in  evidence  accounts  between  the  two 
16th  of  May.  The  language  imputed  a  firms,  determining  their  respective  shares 
partnership  m  jn-cesenti.  But,  inasmuch  of  the  profits  accruing  from  such  publica- 
as  the  business  of  the  partnership  could  tions.  These  accounts  bore  dates  from 
not  be  entered  upon  until  the  1st  of  July,  Januarj',  1836,  to  February,  1837.  The 
the  court,  regarding  the  situation  of  the  paper  was  supplied  in  Apiil  and  May, 
parties,  construed  the  partnership  not  to  1836.  Upon  this  state  of  facts,  Ld.  Den- 
commence  until  that  time.  man,  C.  J.,  left  it  to  the  jury  to  say 
(x)  Gardiner  v.  Childs,  8  C.  &  P.  345.  whether,  nt  the  time  the  goods  in  question 
The  firm,  C.  &  D.,  defendants,  were  prin-  were  furnished,  the  defendants  were  part- 
ters.  The  present  action  was  brought  to  ners  in  the  concern  upon  whose  credit 
recover  of  them  the  price  of  a  certain  they  were  supplied.  The  jury  finding  that 
amount  of  paper  delivered  to  them  by  the  they  were,  judgment  was  rendered  for  the 
plaintiffs,  but  at  the  order  and  upon  the  plaintiff's.  See  Avery  v.  Louve,  1  La. 
credit  of  the  firm  of  A.  and  B.,  publishers.  Ann.  457. 
The  plaintiffs,  to  prove  the  existence  of  a 

1  Where  the  agreement  contemplates  joint  action  at  once,  though  not  in  the  busi- 
ness of  the  partnership,  —  as  where  the  parties  are  to  join  in  equipping  a  factoiy, — 
the  partnership  begins  at  once.  Kerrick  v.  Stevens,  55  Mich.  167,  20  N.  W.  888. 
And  so  if  action  is  to  begin  at  once  the  partnership  begins,  though  the  profit  is  not  to 
be  divided  till  one  of  the  partners  is  reimbursed  for  his  outlay.  Beauregard  v.  Case,  91 
U.  S.  134;  Bybee  r.  Hawkett,  12  F.  R.  649. 


14  THE   LAW   OF   PARTNERSHIP.  [CH.    II. 

than  damages  for  a  breach  of  it,  the  parties  necessarily  resort  to 
equity.  Hence  there  is  certainly  no  branch  of  commercial  law 
(to  which  partnership  emphatically  belongs)  that  so  often  finds 
the  common-law  jurisdiction  inadequate  to  its  wants,  and  is  there- 
fore obliged  to  resort  to  equity  for  relief.  As  we  go  on,  we  shall 
endeavor  to  point  out  specifically,  in  reference  to  the  various 
questions  and  conflicting  claims  which  are  frequently  springing 
up  under  the  law  of  partnership,  the  methods  and  measures  of 
relief  which  equity  administers. 


§  14.]  OF  PARTNERS.  15 


CHAPTER  III. 


OF   PARTNERS. 


§  14.  Who  may  be  Partners.  —  There  is  nothing  in  this  country 
to  prevent  any  number  of  persons  from  entering  into  partnership. 
Notliing  but  their  own  convenience  and  pleasure  determine 
this,  (a) 

As  to  personal  competency,  it  may  be  said  that  any  persons 
competent  in  law  and  in  fact  to  transact  ordinary  business  on 
their  own  account  may  enter  into  partnership  for  that  purpose. 
For  there  is  nothing  in  the  status  of  partnership,  which,  on  the 
one  hand,  confers  a  power  to  transact  business  on  one  who 
otherwise  would  have  no  power,  or,  on  the  other,  restrains  or 
diminislies  the  power  in  him  who  possesses  it  before  or  without 
partnership. 

We  have  said  competent  in  law  and  in  fact,  because  there 
are  incompetencies  created  by  the  law,  or  absolutely  presumed, 
without  any  reference  to  the  actual  fact ;  (5)  as  in  the  case  of  an 

(a)   But  now,   in    England,   by   "The  sons  who  have   not   been  qualified   in    a 

Companies  Act "  of  25  &  26  Viet.   1862,  prescribed  legal  way  incompetent  to  exer- 

consolidating  and  amending  former  acts  cise  particular  trades  or  professions.    Thus, 

upon  the  subject,  no  partnersliip  consist-  by  5  Eliz.  ch.  4,  persons  were  piohibited 

ing  of  more  than  twenty  persons,  which  from  following  any  manual  art  or  occupa- 

has  for  its  object  the  acquisition  of  gain,  tion  who   had    not  previously  served  an 

is  allowed   to  carry  on  business  without  apprenticeship   to    the    same.      But    one 

forming  a  company  by  registration  ;   and  who,    though   he   had   not   been    appren- 

under  the  provisions  of  this  act  any  seven  ticed,  was  a   partner  with  a  brewer,  was 

or  more  persons  may  so  associate,  with  or  held  not  within  the  statute,  since  he  had 

without    limited    liability,    as   they   may  not  acted  in  nor  personally  exercised  the 

elect  and  declare.  trade.    Reynard  v.  Chase,  2  Wils.  40.     See 

('j)  In  England,  the  statute  57  Geo.  3,  22  Geo.  2,  ch.  46,  §  11,  an  act  to  prevent 
ch.  99,  §  3,  rendered  all  s[iiritual  persons  imqualified  persons  from  acting  as  attorn- 
iiicom[)eteat  m  law  to  carry  on,  by  them-  eys  or  solicitors.  In  re  Jackson,  1  B.  & 
selves  or  their  agents,  "  any  trade  or  deal-  C.  270  ;  In  re  Clark,  3  D.  &  R.  260  ;  Hop- 
ing for  gain  or  profit,"  and  of  course  thereby  kinson  v.  Smith,  1  Bing.  13;  Candler  »•. 
interdicted  such  persons  from  being  part-  Candler,  Jac.  225  ;  Sterry  v.  Clifton,  9  C. 
ners  for  that  purpose.  Hall  v.  Franklin,  B.  110  ;  Taylor  v.  Glassbrook,  3  Stark. 
3  M.  &  W.  259.  See  1  &  2  Vict.  ch.  106.  76.  In  Gilfillan  v.  Henderson,  2  CI.  &  F.  1, 
So  also  the  law  sometimes  renders  all  per-  two  solicitors  had  entered   into  partner- 


16  THE   LAW   OF   PARTNERSHIP.  [CH,    III. 

infant,  who  cannot  lawfully  do,  the  day  before  he  is  twenty-one, 
what  he  may  do  on  that  day.  80  a  married  woman  is  disabled  at 
common  law,  althou<^h  in  fact  she  may  have  far  greater  business 
capacity  than  her  husband.  An  insane  person  is  disabled  by  the 
fact  of  his  insanity  ;  and  whether  insanity  exists,  and  in  a 
sufficient  degree  to  have  this  "effect,  must  be  a  question  of  fact 
only.  And  some  difficulty,  to  say  no  more,  attends  the  entering 
into  a  copartnership  of  a  corporation  as  a  member  of  the  firm. 
We  will,  however,  look  at  some  of  these  questions  more 
specifically. 

§  15.  Infants.  —  Infants  are  persons  under  twenty-one  years  of 
age  ;  and,  for  their  own  benefit  and  safety,  the  law  considers  them 
disqualified  for  the  transaction  of  business.  Their  contracts  or 
promises  for  necessaries  —  such  as  shelter,  food,  raiment,  and 
sucli  other  means  of  support  and  education  as  are  proper  for  them 
—  are  valid  and  obligatory,  because  it  is  for  their  interest  that 
they  should  be  able  to  bind  themselves  for  the  things  they  must 
have,  or  suffer  from  the  want  of  them.  But  the  promise  of  an 
infant  in  any  business  transaction  is  voidable  by  him  ;  because  it 
is  not  necessary  that  he  should  earn  money  by  buying  and 
selling,  (d) 

The  promise  is  voidable  only  (if  made  by  an  infant  mentally 
and  physically  able  to  make  it),  and  not,  in  any  case  absolutely 
void,  as  it  used  to  be  called,  (e) 

ship,  one  of  whom  could  practise  only  in  serted  in  a  very  great  number  of  cases. 
a  superior  court,  the  other  only  in  an  iufe-  Keane  v.  Boycott,  2  H.  Bl.  511;  Bayley,  J., 
rior  court.  By  their  agreement  the  profits  in  Thornton  v.  lUingworth,  2  B.  &  C.  826  ; 
of  their  general  business  were  to  be  divide<l;  Fisher  v.  Mowbray,  8  East,  330  ;  Baylis  v. 
each  was  to  recommend  clients  to  the  Dineley,  3  M.  &  S.  477  ;  Tucker  v.  More- 
other,  and  the  existence  of  the  partner-  land,  10  Pet.  58  ;  Vent  v.  Osgood,  19  Pick, 
ship  was  to  be  kept  secret.  It  was  held  572  ;  Lawson  v.  Lovejoy,  8  Me.  405  ;  Rog- 
that  the  agreement  was  illegal  and  void,  ers  v.  Hurd,  4  Day,  57  ;  Pool  v.  Piatt, 
See  Li  re  Woodward,  4  Johns.  289.  1    D.    Chip.    252  ;    McGaw  v.    Marshall, 

(d)  1  Rol.  Abr.  729  ;  Whittingham  v.  7  Humph.   121  ;   MMinn  v.  Richmonds, 

Hill,  Cro.  Jac.  494  ;  Whywall  v.  Cham-  6  Yerg.  9 ;   M'Crillis  v.  How,  3  N.   H. 

pion,   2   Stra.    1083  ;    Dilk   v.    Keighley,  348  ;  Swasey  v.  Vanderheyden,  10  Johns. 

2   Esp.  480  ;  Goode  v.  Harrison,  5  B.  &  33 ;  United  States  v.  Bainbridge,  1  Mason, 

Aid.    147 ;   Van  Winkle    v.    Ketchum,   3  71  ;    Fridge  v.  The   State,    3  Gill   &  J. 

Gaines,  323  ;  Smith  v.  Mayo,  9  Mass.  62  ;  103  ;   Ridgeley  v.   Crandall,  4  Md.   435  ; 

Mason  v.  Wright,  13  Met.  306  ;  Crabtree  Cronise  v.  Clark,  4  Md.  Ch.   403.     But 

V.  May,  1  B.  Mon.  289.  the  doctrine  of  the  text  seems  more  sound 

(c)  The  supposed  doctrine  of  the  com-  in  principle  and  more  practical  of  apjilica- 

mon  law,  that  there  are  some  contracts  of  tion,  and  is  supported  by  the  later  authori- 

an  infant,  namely,  those  which  the  courts  ties.     Williams  v.  Moor,  11  M.  k  W.  256  ; 

can  pronounce  to  be  to  his  prejudice,  which  Fonda    i'.    Van    Home,    15    Wend.    631; 

are  absolutely  void,  is  recognized  and  as-  Breckenbridge  v.  Ormsby,  1  J.  J.  Marsh. 


§15.J 


OF   PARTNERS. 


17 


The  contract  of  partnership  is  like  all  other  mercantile 
contracts,  and  may  be  made  by  an  infant  for  his  own  benefit, 
subject  to  his  right  to  avoid  it.  (ee)  ^ 


236  ;  Scott  v.  Buchanan,  11  Huniiih.  468  ; 
Cummings  v.  Powell,  8  'i'exa.s,  80 ;  Cole  v. 
Pennoyer,  14  111.  158  ;  Robbins  v.  Cutler, 
26  N.  H.  173;  Weaver  v.  Jones,  24  Ala. 
420  ;  Hardy  v.  Waters,  38  lie.  450  ;  Fer- 
guson V.  Bell,  17  Mo.  347;  Strain  v, 
Wright,  7  Ga,  568  ;  1  Am,  Lead.  Gas. 
103  ;  Taft  v.  Seri^eant,   18  Barb.   320. 

{ce)  Crabtree  v.  May,  1  B.  Mon.  289  ; 
GIossop  v.  Colnian,  1  Stark.  25.  Hence, 
an  infant  may  be  a  partner  in  a  mercan- 
tile house,  his  father  supplying  the  capi- 
tal ;  and  if  the  transaction  be  a  bona  fide 
one,  and  the  son  be  the  real  party  in  in- 
terest, and  the  father  retain  no  power  of 
withdrawing  from  the  firm  either  the 
capital  or  the  profits,  an  agreement  that 
the  firm  shall  account  to  the  father  as 
trustee  for  his  son  for  one-third  profit  of 
his  son's  capital,  or  any  loss  that  may 
accrue,  and  be  governed  by  his  advice  iu 


all  business  matters,  will  not  make  the 
father  a  partner.  Barklie  v.  Scott,  1  Hud. 
&  Bro.  83.  But,  though  an  infant  coming 
of  age  may  avoid  his  contract,  he  cannot 
recover  of  persons  wlio  have  dealt  with  the 
partnership  money  expended  by  him  in  its 
affairs,  for  which  he  has  received  and  en- 
joyed a  valuable  consideration.  Holmes 
V.  Blogg,  8  'i'aunt.  508.  But  where  A., 
an  infant,  made  an  agreement  of  copart- 
nersiii[)  with  B.,  and  paid  to  him  a  hun- 
dred pounds,  to  be  forfeited  if,  when  he 
came  of  age,  the  partnershiit  deed  was  not 
duly  executed  by  him,  the  jury  finding 
that  A.  had  paid  the  money  on  a  fraudu- 
lent representation  in  B.'s  balance  sheet, 
A.,  attaining  his  majority  and  disaffirm- 
ing the  contract,  was  allowed  to  recover 
back  the  deposit,  Corpe  v.  Overton,  10 
Bing.  252.  This  last  case  differs  from 
Holmes  v.  Blogg  iu  many  important  fea- 


^  The  infivnt  partner  who  has  not  disaffirmed  has  all  the  rights  and  is  subject  to  the 
duties  of  a  partner.  Thus  his  coi>aitner  may  maintain  a  bill  for  dissolution  and 
account,  because  of  the  infant's  misconduct.  Bush  v.  Linthicum,  59  Md.  344.  But 
he  has  a  right  to  protection  against  liability,  and  therefore  he  may  set  up  his  infancy 
in  defence  to  a  personal  claim  against  him  by  a  partnership  creditor,  Pelletier  v. 
Couture,  148  Mass.  269,  19  N.  E.  400  :  Folds  v.  Allardt,  35  Minn.  483,  29  N.  W. 
201 ;  and  where  his  partner  is  allowed  to  file  a  bill  for  a  dissolution,  the  infant  cannot 
be  charged  with  costs.     Bush  v.  Linthicum,  59  Md.  344. 

Where  the  infant  puts  capital  into  the  partnership,  the  better  view  is  that  he  can- 
not u]>on  disaffirming  the  contract  withdraw  his  capital.  Pelletier  v.  Couture,  148 
Mass.  269,  19  N.  F.  400  ;  Dunton  v.  Brown,  31  Mich.  182;  Foot  v.  Goldman,  68  Miss. 
629,  10  So.  62  ;  Hill  v.  Bell  (Mo.),  19  S.  W.  959.  And  if  he  gives  his  time  to  the 
business  he  cannot  recover  the  value  of  his  services  from  his  copartner.  Page  v.  Morse, 
128  Mass.  99.  Even  after  dissolution,  the  assets  are  to  be  distiibuted  according  to  tlie 
articles  ;  if  there  has  been  a  loss,  the  infant  must  bear  his  share.  Moley  v.  Brine,  120 
Mass.  324. 

If  the  infant  paid  a  premium  to  gain  entrance  to  the  firm,  he  cannot  upon  disaffirm- 
ing the  contract,  recover  the  amount  of  the  premium.  Ex  p'xrtc  Taylor,  8  DeG.  M. 
&  G.  254. 

It  has  however  been  held  in  New  York  that  an  infant  may  rescind  the  contract  of 
partnership  and  recover  the  amount  of  his  contributions,  less  what  he  has  received 
from  the  partnership.  Sparman  v.  Keim,  83  N.  Y.  245.  Even  in  that  State,  however, 
it  would  seem  that  this  cannot  be  done  if  it  would  prejudice  creditors  of  the  partner- 
ship.    Yates  V.  Lyon,  61  N.  Y.  344. 

The  infant's  right  to  disaffirm  extends  to  all  transactions,  it  would  seem,  except  as 
llmiteil  by  rights  acquired  against  the  firm  by  third  ))iuties.  Thus  he  may  avoid  an 
assignment  of  the  firm  property  for  the  benefit  of  creditors  made  either  by  himself  or 
by  his  partner.      Foot  v.  Goldman,  68  Miss.  529,  10  So.  62. 

2 


18  THE   LAW    OF   PARTNERSHIP.  [CH.    III. 

§  16.  Ratification  after  Coming  of  Age.  —  A  promise  of  ail  infant 
may  be  ratilied  by  liini  after  he  is  of  full  age.  And  this  ratifica- 
tion may  be  direct  and  express,  or  it  may  be  implied  by  his  acts, 
or  even  his  silence,  or  inferred  by  law  from  circumstances.  In 
England,  no  ratification,  after  full  age,  binds  an  infant,  unless 
made  in  writing  and  signed  by  him.  (/)  A  similar  statute  exists 
in  Maine,  {y)  It  is  not  quite  certain  how  this  requirement  would 
affect  a  ratification  by  a  continuance  of  the  partnership  and  busi- 
ness. If,  for  exami^le,  a  young  man  of  the  age  of  twenty  entered 
into  a  partnership,  and  at  twenty-one  took  no  notice  of  his  having 
been  an  infant,  but  continued  in  the  partnership  and  in  the  same 
business  for  a  year  or  two  more,  and  the  firm  was  then  called  on 
to  settle  an  account  running  through  all  these  years,  it  is  doubtful 
if,  under  this  statute,  the  infant  would  be  permitted  to  draw  a  line 
between  the  items,  and  hold  himself  responsible  only  for  those 
which  were  subsequent  to  his  majority.  In  this  country  generally, 
one  who  was  an  infant  may  not  only  ratify  after  coming  of  age 
any  promise  to  which  there  is  no  other  objection  than  the  fact  of 
the  previous  infancy,  but  may  ratify  this  by  any  conduct  of  an 
unequivocal  character,  which  must  be  understood  either  as  a  rati- 
fication, or  else  as  fraud  or  as  gross  negligence  on  his  part,  {h)  ^ 

tures.     The  court,  however,  distinguish  it  satisfied  the  statute,   and  that  the  date, 

from  that  case  only  upon  the  ground  that  address,    and  debt   might  be   proved   by 

in  the  one  the  infant  had,  and  in  the  other  parol. 

he  had  not,  enjoyed  a  valuable  consideia-  ('/)  Acts  of  Maine,  1845,  ch.  166.    See 

tion  for  the  money  he  sought  to  recover  Thurlovv  v.  Gilmore,  40  Me.  378. 
back.  (h)   Martin    v.    Mayo,    10    Mass.    137 ; 

(/)  9   Geo.    4,    ch.    14,  §    5.     In   the  Whitney  v.  Dutch,  14  Mass.  457  ;    Pierce 

construction  of   this  statute,  it  has  been  v.  Tobey,  5  Met.  168  ;    Orvis  v.  Kimball, 

held  that  "any  written  instrument  signed  3  N.  H.  314 ;  Aldrich  v.  Grimes,  10  N.  H. 

by  the  party,  which,  in  the  case  of  adults,  194;    Robins  v.    Eaton,  10   N.    H.    561; 

would  have  amounted  to  the  adoption  of  Edgei-ly  v.  Shaw,  25   N.  H.  514  ;    Boydeu 

the  act  of  a  party  acting  as  agent,  will,  in  v.    Boyden,    29    N.    H.    519;    Delano   v. 

the  case  of  an  infant  who  has  attained  his  Blake,  11  Wend.  85  ;  Bigelow  v.  Grannis, 

majority,  amount  to  a  ratification."  Harris  2  Hill  (N.  Y. ),  120  ;  Taft  v.  Sergeant,  18 

V.    Wall,  1   Exch.    122.     See   Mawson   v.  Barb.  320  ;  Law&on  v.  Lovejoy,  8  Me.  405  ; 

P.lane,    10    Exch.   206.       In    Hartley   v.  Richardson  v.  Bright,  9  Vt.  368  ;   Best  v. 

Wharton,  11  A.  &  E.  934,  the  writing  by  Givens,  3  B.  Mon.  72  ;  Cheshire  v.  Barrett, 

which  the  ratification  was  alleged  to  be  4  Me(.'ord,  241  ;  Bobo  v.  Hansell,  2  Bailey, 

made  was  a  letter,  without  date  or  address,  114:    Eubanks   v.   Peak,  2  Bailey,   497; 

containing  a  promise  to  remit  within   a  Alexander    r.    Heriot,    Bailey    Eq.    223  ; 

short  time,  but  mentioning  no  sum  nor  Thnmasson  v.  Boyd,  13  Ala.  419  ;  Forsyth 

any  particular  debt.     It  was  held,  never-  v.  Hastings.  27  Vt.  646. 
theless,  that  this  was  a  ratification  which 

^  An  infant  partner  who  continues  his  connection  with  the  business  after  coming  of 
age  ratifies  all  partnership  transactions  during  his  infancy.  Salinas  v.  Bennett,  33  S. 
C.  285,  11  S.  E,  968. 


§1^-] 


OP   PARTNERS. 


19 


But  a  mere  acknowledgement  that  the  debt  exists  is  not  of  itself 
a  ratification  of  a  promise  to  pay  the  debt.  {() 

If  we  suppose  that  an  infant  enters  into  a  partnership,  holding 
himself  out  by  his  declarations,  or  by  the  plain  indication  of  cir- 
cumstances, as  an  adult,  and,  after  he  comes  of  age,  does  not 
expressly  withdraw  or  give  any  equivalent  notice,  persons  dealing 
with  the  firm  in  the  belief  that  the  former  infant  was  still  a  part- 
ner would  hold  him  liable ;  because,  whether  he  was  a  partner  or 
not,  he  permitted  the  firm  to  use  his  credit,  and  he,  and  not  an 
innocent  third  party,  must  suffer  the  consequences,  (j) 

In  general,  an  infant  partner  who  comes  of  age  should,  with  no 
unnecessary  delay,  leave  the  firm,  and  declare  himself  not  respon- 
sible for  its  debts,  if  he  intends  to  take  that  course ;  for  any 
considerable  delay  would  bind  him  like  a  ratification,  because  it 
could  be  accounted  for  only  by  criminal  neglect  or  fraud,  (k) 


(i)  Thrupp  V.  Wilder,  2  Esp.  628  ; 
Gooiisell  I'.  Myers,  3  Wend.  479  ;  Millard 
V.  Hewlett,  19  Wend.  301  ;  Smith  v. 
Mayo,  9  Mass.  62  ;  Ford  v.  Phillips,  1 
Pick.  202  ;  Thompson  v.  Lay,  4  Esp.  48  ; 
Benham  v.  Bishop,  9  Conn.  330  ;  Wilcox 
V.  Roath,  12  Conn.  550  ;  Hale  v.  Gerish, 
8  N.  H.  374  ;  Robbins  i'.  Eaton,  10  N.  H. 
561  ;  Ordinary  v.  Wherry,  1  Bailey,  28  ; 
Alexander  v.  Hutcheson,  2  Hawks,  535  ; 
Hindy  v.  Margarity,  3  Barr,  428. 

{j)  Goode  V.  Harrison,  5  B.  &  Aid. 
147.  Goode  &  Bennion,  defendants  below, 
had  held  themselves  out  as  general  part- 
ners in  trade,  especially  by  a  joint  pur- 
chase of  goods  of  the  plaintiff  in  April, 
1818.  At  that  time  Bennion  was  an  in- 
fant, though  that  fact  was  unknown  to 
the  plaintiff.  There  was  evidence  showing 
that  Bennion  did  not  intend  to  be  a  part- 
ner with  Goode,  except  for  the  single 
transaction  of  April,  1818,  and  that  he 
did  not  afterwards  interfere  with  Goode's 
general  business.  In  Maj-  following  he 
became  of  age  ;  but  no  notice  of  his  hav- 
ing ceased  to  be  a  partner  was  ever  given 
by  him.  Subsei|nently  to  his  coming  of 
age  Goode  bought  more  gootis  of  Harrison 
in  the  name  of  the  firm,  and  accepted  a 
bill  for  them  in  the  name  of  himself  and 
Bennion.  It  was  held  that  Bi^nnion  was 
liable  on  this  bill ;  for,  having  shortly  be- 
fore he  came  of  age  represented  himself 
as  a  partner,  it  was  his  duty  to  notify  the 
plaintiff  that  he  was  not  so  when  he  came 


of  age,  as  otherwise  he  facilitated  the  com- 
mission of  a  fraud  upon  the  plaintiff. 

{k)  See  Holmes  v.  Blogg,  8  Taunt.  35  ; 
1  J.  B.  Moore,  466.  In  March,  1816,  the 
firm  of  A.  &  B.  leased  certain  premises  for 
the  purposes  of  their  trade.  A.,  an  in- 
fant, in  the  presence  of  B.,  advanced  one 
half  of  the  amount  of  the  rent.  For  the 
other  half  three  bills  were  drawn  upon  the 
fii'm,  and  accepted  by  A.  in  the  names  of 
himself  and  [)artner,  the  first  bill  payable 
in  four  months.  In  June,  A.  reached  his 
majority,  and  immediately  dissolved  the 
partnership ;  but,  though  his  name  was 
taken  from  the  door  shortly  afterwards,  no 
notice  w-as  given  of  his  avoidance  of  the 
lease  till  nearly  four  months  afterwards. 
Dallas,  J.,  said  :  "I  agree  that  in  every 
instance  of  a  contract,  voidable  only  by  an 
infant  on  coming  of  age,  the  infant  is 
bound  to  give  notice  of  disaffirmance  of 
such  contract  in  i-easonable  time  ;  and, 
if  the  case  before  the  court  were  that  sim- 
ple case,  I  should  be  disposed  to  hold, 
that,  as  the  infant  had  not  given  express 
notice  of  disaffirmance  within  four  months, 
he  had  not  given  notice  of  disaffirmance  in 
reasonable  time."  But  it  seems  that  no- 
tice of  disaffirmance  of  an  infant's  contract 
may  be  dispensed  with  by  the  acts  of  the 
party  to  whom  it  would  otherwise  be  due. 
The  lessor,  in  this  case,  having,  after  the 
dissolution  of  the  partnership,  made  a  new 
arrangement  with  B.,  A.'s  copartner,  by 
whicli  a  part  of  the  rent  was   remitted, 


20 


THE   LAW   OF   PARTNERSHIP. 


[CH.    III. 


§  17.  Avoidance  of  Contract. — It  may  be  well  to  remark  that 
the  right  of  an  infant  to  avoid  his  contract  gives  no  right  of  avoid- 
ance whatever  to  the  other  contracting  party,  who  is  bound  if 
the    infant    does    not    choose    to  avoid    the   contract.  {I)     The 


and  having,  when  the  first  bill  became 
due,  sued  B.  alone  upon  it,  and  having 
afterwards  compromised  tlie  action,  and 
accepted  from  B.  alone  a  surrender  of  the 
lease,  and  cancelled  the  other  bills,  all 
this  without  the  privity  of  A.,  it  was 
held  that  there  should  be  a  new  trial, 
in  order  that  the  jury  might  determine 
whether,  upon  these  facts,  notice  of  disaf- 
firmance had  not  been  waived.  The  case, 
however,  was  ultimately  decided  upon 
other  grounds.  8  Taunt.  508.  The  dic- 
tum of  Dallas,  J.,  above  quoted,  that  an 
infant  must  disaffirm  his  contract  within 
a  reasonable  time  after  coming  of  age,  or 
his  silence  will  bind  him  like  a  ratifica-  • 
tion,  is  established  law  in  the  English 
courts,  and  has  been  approved  by  emi- 
nent judges  in  this  country.  Cork  & 
Bandon  R.  R.  Co.  v.  Cazenove,  11  Q.  B. 
935  ;  Leeds  &  Thirsk  R.  R.  Co.  v.  Fearn- 
ley,  4  Exch.  26  ;  Northwestern  R.  R.  Co. 
V.  M'Michael,  5  Exch.  114;  Dublin  & 
Wieklow  R.  R.  Co.  v.  Black,  8  Exch.  181  ; 
Richardson  v.  Boright,  9  Vt.  368  ;  Kline 
V.  Bebee,  6  Conn.  494  ;  Scott  v.  Buchanan, 
11  Humph.  468.  But  the  weight  of 
American  authority  cannot  be  said  to  be 
in  favor  of  the  proposition  that  mere  neg- 
lect to  disaffirm  will  of  itself  amount  to 
a  ratification.  There  must,  beside,  be 
positive  action  on  the  part  of  him  who 
has  come  of  age  clearly  indicating  his 
intention  to  abide  by  the  contract  which 
he  has  made  during  his  infancy.  Thus, 
in  Dana  v.  Stearns,  3  Cush.  342,  B.,  an 
infant,  and  S.  had  been  in  partnership, 
which  was,  however,  dissolved  by  mutual 
consent  before  B.  came  of  age.  B.  sold 
out  his  share  to  S..  took  therefor  the  note 
of  S.  with  security,  but  never  expressed 
any  purpose  of  repudiating  the  partner- 
ship. In  an  action  brought  against  B.  & 
S.  as  partners,  upon  notes  given  by  them 
while  in  business  together,  and  in  consid- 
eration of  merchandise  sold  and  delivered 
to  them,  it  was  contended  that  B.  had 
ratified  the  partnership  after  coming  of 
age,  and  therefore  the  notes  iu  suit,  by 


retaining  and  attempting  to  enforce  the 
note  of  S.  above  mentioned,  which  was 
given  by  S.  not  only  for  the  amount  of 
capital  originally  contributed  by  B.,  but 
also  in  addition  for  B.'s  share  of  the  protits 
realized  by  the  firm  during  their  continu- 
ance in  business.  But  the  court  held  that 
no  sufficient  ratification  was  proved  from 
these  facts,  and  that  B.  was  not  liable  for 
the  partnership  debts.  See,  to  the  same 
point,  the  note  to  the  case  of  Dublin  &  Wick- 
low  R.  R.  Co.  V.  Black,  8  Exch.  181,  where 
the  American  authorities  are  reviewed. 
See  also  Jones  v.  Phoenix  Bank,  8  N.  Y. 
228  ;  N.  H.  Mut.  F.  Ins.  Co.  v.  Noyes, 
32  N.  H.  345  ;  Stokes  v.  Brown,  4  Chand. 
39.  A  plea  of  infancy  to  a  note  executed 
by  an  infant  partner  in  the  name  of  the 
firm  is  not  avoided  by  a  replication  that 
defendant  had  continued  to  be  a  partner 
for  a  year  and  more  after  he  became  of 
age,  and  had  not  during  that  time,  nor 
for  some  years  after,  disaffirmed  any  note 
executed  during  his  infancy  in  the  name 
of  the  firm.  There  should  also  be  an 
averment  that  he  had  knowledge  of  the 
particular  contract  declared  on,  and  that 
he  was  looked  to  as  a  party  to  it.  Crab- 
tree  V.  May,  1  B.  Mon.  289.  In  Miller  v. 
Sims,  2  Hill  (S.  C),  479,  an  action  was 
brought  on  a  note  signed  by  Sims  in  the 
name  of  Sims  &  Ashford.  Ashford  was, 
at  the  time  of  signing,  a  minor.  After  lie 
came  of  age  there  was  evidence  that  he 
received  moneys  due  the  firm,  and  signed 
the  firm  name,  but  refused  to  have  any- 
thing to  do  with  the  note  in  question, 
and  never  ratified  or  confirmed  it.  The 
court  held  that  if  Ashford,  after  coming 
of  age,  did  in  any  manner  concur  in  carry- 
ing on  the  partnership  business,  or  receive 
profits  from  it,  it  would  amount  to  a  rati- 
fi.  ation  ;  and  that,  by  affirming  the  part- 
nership, Ashford  recognized  and  affirmed 
the  agency  of  Sims. 

(0  Holt  ?;.  Ward,  2  Str.  937  ;  Warwick 
V.  Bruce,  2  M.  &  S.  205  ;  Willard  v.  Stone, 
7  Cow.  22  ;  Paikei-  v.  Barker,  1  Clarke  Ch. 
136  ;  Rose  v.  Daniel,  3   Brev.  438  ;  Voor- 


.  §  18.] 


OF   PARTNERS. 


21 


infant's  privilege  of  avoiding  his  contracts  extends  to  his  legal 
representatives,  (m) 

A  fiat  or  decree  of  bankruptcy  against  an  infant  is  not  voidable 
only,  but  wholly  void  at  law.  (n)  Equity,  however,  will  not  declare 
it  void  if  he  has  induced  persons  to  give  him  credit  as  an  adult 
member  of  the  firm,  but  will  leave  him  to  his  remedy  at  law.  (o) 
But  the  fact  that  his  name  is  used  in  the  firm  is  not  of  itself  suffi- 
cient to  prevent  equity  from  annulling  the  same,  (p) 

§  18.  Effect  of  Plea  of  Infancy.  —  If  a  contract  be  made  with  a 
firm,  one  of  the  members  being  an  infant,  and  repudiating  his 
own  liability,  it  seems  to  be  doubted  whether  the  contract  can 
afterwards  be  treated  as  a  contract  made  with  the  other  part- 
ners, (pp)     It  would  seem,  however,  that  it  may.     The  technical 


hees  V.  Wait,  3  Green,  343;  M'Ginn  v. 
Shaeffer,  1  Watts,  412  ;  Camion  v.  Als- 
buiy,  1  A.  K.  Marsh.  76. 

(wi)  Hussey  v.  Jewett,  9  Mass.  100  ; 
Martin  c.  Mayo,  10  Mass.  137  ;  J;icksoii 
V.  Mayo,  11  ilass.  147. 

(n)  O'Brien  v.  Currie,  3  0.  &  P.  283  ; 
Beltoi)  P.  Hodges,  9  Ring.  365.  The  fiat 
is  void,  because  a  minors  contracts  of  trade 
being  voidable,  he  cannot  be  a  bankrupt  for 
debts  which  he  is  not  obliged  to  pay.  Ibid. ; 
Rex  r.  Cole,  1  Ld.  Kaym.  443 ;  Lord 
Eldon,  in  Ex  parte  Adam,  1  Ves.  &  B.  494  ; 
Ex  parte  Moule,  14  Ves.  602.  Hence  also 
a  joint  commission  of  bankruptcy  against 
a  firm,  one  of  the  members  of  which  is  an 
infant,  will  be  superseded.  Ex  parte  Hen- 
derson, 4  Ves.  163  ;  Ex  jxirte  Barwis,  6 
Ves.  601.  But  where  a  statute  provides 
that  an  adjudicated  bankrupt,  to  test  the 
validity  of  the  commission,  must  show 
cause  before  the  commissioner  within 
seven  days  after  the  adjudication  ;  or,  to 
dispute  or  annul  the  fiat,  must  commence 
proceedings  within  twenty-one  days  after 
the  advertisement  of  the  bankruptcy,  — 
a  partner  adjudged  a  bankrupt  while  an 
infant  cannot  after  the  lapse  of  the  pre- 
scribed period  maintain  a  petition  pray- 
ing, on  the  ground  of  his  infancy,  to  have 
the  adjudication  and  fiat  annulled  ;  there 
being  in  this  respect  no  exception  made 
of  infants  in  the  statute.  Ex  parte  West, 
2  De  Gex,  M.  &  G.  198.  [But  under  the 
insolvency  laws  a  firm  may  be  declared 
insolvent  though  one  partner  sets  up  his 
infancy.      The    infant     however    cannot 


himself  be  involved  in  the  proceedings. 
Pelletier  v.  Couture,  148  Mass.  269,  19  N. 
E.  400.] 

(o)  Ex  parte  Watson,  16  Ves.  265. 
The  Lord  Chancellor  delivered  his  opinion 
as  follows:  "As  it  appears  in  this  case 
that  the  petitioner  held  himself  forth  to 
the  world  as  an  adult,  and  sici  juris,  and 
traded  in  that  character,  and.  contracted 
debts  to  a  considerable  amount  for  two 
years  previous  to  the  commission,  and  as 
this  i)etition  is  opposed  on  behalf  of  the 
creditors,  I  will  make  no  order  ;  but  leave 
the  bankrupt  to  his  action  at  law,  if  he  shall 
think  proper  so  to  do.  I  consider  him  no 
more  entitled  to  any  favor  or  assistance 
than  a  feme  covert  who  lives  apart  from 
her  husband,  and  holds  herself  out  as  a 
feme  sole,  and  contracts  debts,  is  entitled 
to  any  summary  relief  from  the  judges  at 
common  law  ;  who  always  leave  a  woman 
of  that  description  to  make  the  best  she 
can  of  her  plea  of  coverture  in  any  action 
brought  against  her,  and  constantly  refuse 
to  interfere  so  as  to  aff"ord  her  any  sum- 
mary relief." 

{p)  As  where  A.  takes  B.,  his  minor 
son,  sixteen  years  old,  into  partnership. 
Though  the  names  of  A.  &  B.  are  put  over 
the  door  of  their  place  of  business,  B.  is 
not  by  that  circumstance  so  held  out  to 
customers  as  an  adult  partner  as  to  lose 
the  right  of  having  annulled  a  joint  fiat  of 
bankruptcy  issued  against  the  firm  of  A. 
&  B.     Ex  parte  Lees,  1  Deacon,  705. 

{pp)  See  Story  Part.  §  255. 


22 


THE    LAW    OF    PARTNERSHIP. 


[CH.    III. 


rules  of  pleading  in  England  require  that  if  an  action  be  brought 
against  an  infant  (or  one  who  was  an  infant  at  the  time  of  the 
promise)  and  others,  and  infancy  is  pleaded,  the  plaintiff  cannot 
proceed  against  the  others,  but  he  may  bring  a  new  action  against 
them  alone,  {q)  And  if  he  brings  an  action  originall}'  against 
them  alone,  and  the  non-joinder  of  the  infant  is  pleaded  in 
abatement,  the  infancy  is  a  sufficient  replication,  (r)  although  a 
ratification  by  him  who  has  been  an  infant  would  be  a  good 
rejoinder,  (s)  In  Massachusetts,  New  York,  New  Hampshire, 
Indiana,  and  Maine,  it  has  been  held  that  an  action  brought 
against  all  may  be  continued  against  the  other  parties  when 
one  of  them  pleads  infancy  ;  {t)  and  it  is  to  be  expected  that 
this  would  be  recognized  as  the  American  rule. 

§  19.  Married  Women.  —  A  married  woman  is,  by  common  law, 
incapable  of  trade,  and  therefore  of  entering  into  partnership. 
But,  by  the  "  custom  of  London,"  married  women  may  some- 
times be  sole  traders,  (?^)  and  the  courts  of  this  country  are  quite 
indulgent  in  permitting  women  whose  husbands  have  deserted 
them — voluntarily,  or  by  compulsion  of  law  —  to  enter  into  busi- 
ness for  their  support.  And  it  seems  that  any  married  woman  who 
is  capable  of  being  a  sole  trader  may  also  enter  into  a  commercial 
partnership,  {v) 


{q)  Chandler  v.  Parkes,  3  Esp.  76  ; 
Jatfray  v.  Frebain,  5  Esp.  47. 

(r)  Burgess  v.  Merrill,  4  Taunt.  469  ; 
2  Yin.  Ab.  68. 

(s)  Gibbs  1-.  Merrill,  3  Taunt.  307.  But 
such  rejoinder  must  be  supported  by  proof 
of  a  ratification  made  before  suit  brought. 
Thornton  v.  Illingworth,  2  B.  &  C.  824. 
In  an  action  for  a  partnership  debt,  an 
infant  partner  must  be  made  co-plaintiff. 
Teed  v.  Elworthy,  12  East,  210 ;  Kell  v. 
Nainby,  10  B.  &  C.  20. 

(t)  Woodward  v.  Newhall,  1  Pick.  500  ; 
Tuttle  V.  Cooper,  10  Pick.  281  ;  Hartness 
V.  Thompson,  5  Johns.  160  ;  Robertson  v. 
Smith,  18  Johns.  478  ;  Morton  v.  Croghan, 
20  Johns.  123  ;  Judson  v.  Gibbons,  5 
Wend.  224  ;  Ex  parte  Nelson,  1  Cow. 
424  ;  Cutts  v.  Gordon,  13  Me.  474.  The 
same  is  the  rule  in  Indiana.  Kirby  v. 
Cannon,  9  Ind.  371.  So,  too,  in  New 
Hampshire.  Gay  v.  Johnson,  32  N.  H. 
167.  See  also  Wamsley  v.  Lindenberger, 
2  Rand.  478  ;  Cole  v.  Pennell,  2  Rand. 
174  :  Barlow  v.  Wiley,  3  A.  K.  Marsh. 
457  ;  Slocum  v.  Hooker,  13  Barb.  536. 


(n)  Langham  v.  Bewett,  Cro.  Car.  68. 
In  this  case,  the  custom  of  London  was 
read,  to  wit  :  "That  a  feme  sole  merchant 
is  where  the/cme  trades  by  herself  in  one 
trade,  with  which  her  husband  doth  not 
meddle,  and  buys  and  sells  in  that  trade." 
But  the  city  courts  only,  not  the  supei'ior 
courts  at  Westminster,  take  notice  of  this 
custom,  so  that  a  feme  covert  cannot,  by 
virtue  of  it,  sue  or  be  sued  in  the  latter 
without  her  husband.  Caudell  v.  Shaw, 
4  T.  R.  361  ;  Beard  v.  Webb,  2  B  &  P.  93  ; 
Cosio  V.  De  Bernales,  1  C.  &  P.  266,  note. 

(i')  [Penn  v.  Whitehead,  17  Graft.  503.] 
By  the  law  of  England  a  wife  may  act  as 
a  feme  sole,  if  her  husband  has  been  ban- 
ished, or  has  abjured  the  realm,  or  been 
transported,  or  if  he  has  professed  the 
Catholic  religion.  Co.  Litt.  132  b,  133  a ; 
Lean  v.  Schutz,  2  W.  Bl.  1195;  Corbet t  z;. 
Poelnitz,  1  T.  R.  5  ;  Marshall  v.  Ruttoii, 
8  T.  R.  545  ;  Carroll  v.  Blencow,  4  Esp. 
27  ;  Marsh  v.  Hutchinson,  2  V>.  &  P.  231  ; 
Ex  parte  Franks,  1  Moo.  &  Sc.  1.  So,  &ho, 
if  her  husband  is  an  alien,  who  has  never 
resided  in  England.     Deerly  v.  Mazarine, 


20.J 


OF    PARTNERS. 


23 


§  20.  statutory  Changes.  —  Legislation  in  this  country  has  made 
the  most  im|)(ji-t;uit  and  extensive  additions  to  tlie  powers  of  mar- 
ried women.  So  early  as  1718,  in  Pennsylvania,  and  1744,  in 
South  Carolina,  the  privileges  oiferne  aole  traders  by  the  custom 
of  London  were  extended  to  married  women  in  those  States, 
which  were  then  colonies,  {w)  Within  the  last  few  years,  the 
legislatures  of  very  many  States  have  made  much  greater  innova- 
tions upon  the  law  of  husband  and  wife.  The  various  statutes 
differ  of  course  in  their  details,  but,  in  general,  their  object  and 
scoi)e  arc  the  same.^ 


1  Salk.  116  ;  De  rxallou  v.  L'Aigle,  1  B. 
&  1'.  357  ;  Miiiwli  v.  Hutchiiisoii,  2  B.  & 
?.  226  ;  Farber  v.  Grauard,  4  B.  &  \\  80  ; 
Walfonl  V.  De  Pieiine,  2  Esj).  .o54  ;  Fiaiiks 
V.  De  Pitniiie,  2  Ksp.  587  ;  Kay  v.  Pieiine, 
3  Camp.  12:3.  Tlie  priuciiile  upon  which  the 
Eiii^li.sh  courts  have  proceeded  in  these  cases 
is,  that,  in  the  view  of  the  law,  the  husband 
has  no  civil  existence,  and  that  the  wife  is 
tiieiefoie  m  a  state  of  civil  widowhood.  In 
this  country,  the  same  exceptions  to  the 
disability  of  married  women  to  make  and  to 
be  bound  by  contracts  have  been  recognized 
by  the  courts.  Gregory  v.  Paul,  15  Mass. 
31  ;  Robinson  v.  Reynolds,  1  Aik.  174  ; 
Cornwall  v.  Hoyt,  7  Conn.  420  ;  Wright 
V.  Wright,  2  Desau.  244 ;  Boyce  v.  Owens, 
1  Hill  (S.  C),  8;  M'Arthur  v.  Bloom,  2 
Duer,  151.  And,  if  a  man  has  never  lived  in 
that  State  of  the  Union  in  wliich  his  wife 
resides,  be  is,  so  far  as  that  State  is  con- 
cerned, an  alien,  and  his  wife  is  treated  as 
a  feme  sole.  Abbot  v.  Baylc}',  6  Pick.  89. 
But  American  courts  have  also  gone  far- 
ther, and  have  held  a  separation  from  and 
abandonment  of  the  wife,  coupled  with  an 
intent  to  renounce  dc  facto  the  marital 
relation,  to  operate  like  an  abjuration  of 
the  realm,  and  to  invest  the  wife  with  the 
rights  of  ^  feme  sole.  And  in  some  cases 
sliglit  circumstances  have  been  considered 


sufficient  to  constitute  such  desertion  aiwi 
lenunciation.  Bogget  v.  Frier,  11  East, 
301  ;  Gregory  i-.  Pierce,  4  Met.  478  ;  Rhea 
V.  Rhenuer,  1  Pet.  105  ;  Valentine  v. 
Ford,  2  P.  A.  Browne,  193  ;  Bean  v. 
Morgan,  4  McCortl,  148  ;  Love  v.  Moy- 
nehan,  16  111.  277  ;  Krebs  v.  O'Grady, 
23  Ala.  726.  In  Massachusetts,  a  wife 
divorced  a  nnensa  et  thoro  may  sue  and  be 
sued  as  a  feme  sole.  Dean  v.  Richmond, 
5  Pick.  461  ;  Pierce  v.  Barnhani,  4  Met. 
303.  Otherwise  in  England.  Lewis  v. 
Lee,  3  B.  &  C.  291.  Where  a  feme  covert 
entered  into  agreement  of  partnership, 
providing  for  its  duration  beyond  the  death 
of  her  husband,  and  this  agreement  was 
executed,  ^nd  the  partnership  continued 
beyond  her  husband's  death  until  her  own, 
it  was  held,  that  the  copartnership  related 
back  to  the  execution  of  the  articles,  so  as 
to  give  all  parties  the  same  rights  and 
advantages  as  they  would  have  been  enti- 
tled to  if  tlie/e?)!e  covert  had  been  a  feme 
sole  at  the  date  of  their  execution.  Everit 
V.  AVatts,  10  Paige,  82. 

(iv)  Burke  v.  AVinkle,  2  S.  &  R.  189  ; 
Jacobs  V.  Fatherstone,  6  W.  &  S.  346  ; 
Newbiggin  v.  Pillans,  2  Bay,  462  ;  Mc- 
Dowall  V.  Wood,  2  N.  &'McC.,  242; 
Stark  V.  Taylor,  4  McCord,  413. 


1  It  is  still  true  that  in  the  absence  of  express  statutory  authority  a  married  woman 
cannot  (with  the  exceptions  already  noticed)  be  a  partner.  De  Graum  v.  Jones.  23 
Fla.  83,  6  So.  925  ;  Bradstreet  v.  Baer,  41  Md.  19  ;  Brown  v.  Jewett,  18  N.  H.  230  ; 
Gwynn  v.  Gwynn,  27  S.  C.  525,  4  S.  E.  229  ;  Weisiger  v.  Wood,  (S.  C.)  15  S.  E. 
597  ;  Frank  v.  Anderson,  13  Lea,  695  ;  Brown  v.  Chancellor,  61  Tex.  437  ;  Miller  j;. 
Marx,  65  Tex.  131  ;  Carey  v.  Burruss,  20  W.  Va.  571. 

But  under  statutes  which  allow  her  to  carry  on  business  as  if  sole,  she  may  form  a 
partnership.     Abbott  v.  Jackson,  43  Ark.  212  ;  Dupuy  v.  Sheak,  57  la.  361  ;  Vail  v. 


24  THE   LAW   OF   PARTNERSHIP.  [CH.    III. 

rf  a  single  woman  was  a  member  of  a  firm,  —  which  she 
certainly  may  be,  —  no  doubt  the  established  principle,  by  which 
her  marriage  dissolved  the  partnership,  would  still  prevail, 
generally  at  least,  in  this  country,  {y) 

§  21.  Ownership  of  Share  in  a  Partnership.  — There  are  kinds  of 
partnership,  as  joint-stock  companies  and  the  like,  in  which  a 
partner  may  only  own  stock  or  shares,  and  take  no  part  whatever 
in  the  active  management  of  the  concern.  There  is  nothing  to 
prevent  a  wife  from  holding  such  stock  or  shares ;  but  her 
ownership — or  partnership,  if  it  should  be  so  called  —  would 
seem  to  be  that  of  her  husband,  and  upon  him  would  rest  generally 
all  the  liabilities  and  obligations  of  a  partner,  {z)     So,  if  a  man's 

{y)  Watson  on  Part.  384  ;  Gow  on  the  time  of  his  marriage,  his  wife  was  a 
Part.  225.  See  post,  ch.  12.  And  see  legally  registered  owner.  After  their  mar- 
Brown  V.  Jewett,   18  N.  H.  230.  ringe,  the  shares  had  continued  to  stand 

{z)  Gow  on   Part.    2.     In   Dodgson  v.  in   the  maiden  name  of  defendant's  wife, 

Bell,  5  Exch.  57,  the  question  was,  wliether  and  she  had  received  dividends  and  paid 

the  defendant  was  a  partner  in  a  joint-stock  calls  in  respect  of  them,  though  without 

banking  compan}'  in  which,  before  and  at  the  knowledge  of  her  husband,  who  never 

Winterstein  (Mich. ),  53  N.  W.  932 ;  Newman  v.  Morris,  52  Miss.  402.      Contra,  Haas 
V.  Shaw,  91  Ind.  384  [scmbk).     See  Swasey  v.  Antram,  24  Oh.  St.  87. 

It  is  generally  held  that  tliese  statutes  do  not  permit  a  wife  to  enter  into  partner- 
ship with  her  husband.  Haas  v.  Shaw,  91  Ind.  384  ;  Bowker  v.  Bradford,  140  Mass. 
521,  5  N.  E.  480 ;  Artman  v.  Ferguson,  73  Mich.  146,  40  N.  W.  907  ;  Payne  v.  Thomp- 
son, 44  Oh.  St.  192,  5  N.  E.  654;  Board  of  Trade  v.  Hayden,  4  Wash.  St.  263,  30  Pac. 
87;  Fuller  v.  McHenry  (Wis.),  53  N.  W.  896.  Contra,  In  re  Kinkead,  3  Biss.  405 
(scmble)  ;  Francis  v.  Dickel,  68  Ga.  255  (scmblc)  ;  Toof  v.  Brewer,  (Miss.)  3  So.  571 
(sevibfc);  Suau  v.  Gaffe,  122  N.  Y.  308,  25  N.  E.  488  (Court  of  Appeals,  Second  Division  : 
three  judges  dissenting)  ;  but  see  Hendricks  v.  Isaacs,  117  N.  Y.  411,  22  N.  E.  1029. 

Where  a  statute  expressly  empowers  a  husband  and  wife  to  contract  witli  one  anothei 
they  may  become  partners.     Schla]>back  v.  Long,  90  Ala.  525,  8  So.  113. 

According  to  the  Spanish-Mexican  law,  a  wife  may  be  a  partner  with  her  husband. 
Gosio  ;;.  De  Bernales,  Ry.  &  Moo.  102  ;  Fuller  v.  Ferguson,  26  Cal.  546. 

A  doubt  was  suggested  in  Rittenhouse  v.  Leigh,  57  Miss.  697,  as  to  the  right  to 
hold  a  married  woman  as  partner  by  estoppel,  wliere  the  statute  gives  her  power  to 
do  business  and  enter  into  partiiershiji.  Although  the  statute  permits  her  to  engage  in 
business,  it  might  well  be  held  that  she  could  render  herself  liable  only  by  actually  doing 
so.  Where  she  cannot  form  a  partnership  she  certainly  cannot  be  charged  with  the 
liability  of  a  partner  by  estoppel.  Gvvynn  v.  Gwynn,  27  S.  G.  525,  4  S.  E.  229; 
Weisiger  v.  Wood,  (S.  G.)  15  S.  E.  597."^ 

If  a  married  woman,  not  empowered  bj'  statute,  engages  in  business  as  member  of  a 
partnership,  the  capital  that  she  puts  into  the  enterprise  is  liable  for  the  firm  debts, 
though  she  is  under  no  individual  liability.  Weil  v.  Simmons,  66  Mo.  617  ;  Frank 
V.  Anderson,  13  Lea,  695,  (aemblc).  And  she  has  the  corresponding  right  to  call  for  an 
account.  Bitter  v.  Rathman,  61  N.  Y.  512.  Where  a  statute  permits  the  partnership 
to  be  sued  in  the  firm  name  this  may  be  done  though  a  married  woman  is  a  member  ; 
since  execution  issues  in  such  a  suit  against  firm  property  only.  Yarbrough  v.  Bush, 
69  Ala.  170. 

In  Texas  it  is  held  that  the  husband  is  the  partner.  Miller  v.  Marx,  65  Tex.  131  ; 
Purdom  v.  Boyd,  (Tex.)  17  S.  W.  606. 


§  22.]  OF   PARTNERS.  25 

wife  inherited  an  interest  in  a  partnership,  and  ho,  instead  of 
having  the  accounts  settled,  and  the  interest  withdrawn,  as  he 
might  do,  permitted  it  to  continue  in  the  husiness,  this  would 
make  him  a  partner,  even  without  his  actually  withdrawing  and 
appropriating  funds.  It  certainly  would  have  this  effect  wherever 
the  common  law  so  far  prevailed  that  all  her  share  of  the  profits 
were  at  once  his.  If,  however,  the  property  or  interest  were  given 
to  trustees  for  the  sole  benefit  of  the  wife,  free  from  any  right  or 
control  of  the  husband,  then  the  mere  fact  of  its  continuance  in 
the  business  would  not  render  him  liable  as  partner,  although  it 
would  probably  cast  this  responsibility  on  the  trustees  ;  as  otiier- 
wise  it  would  be  a  kind  of  limited  partnership,  without  the 
precautions  and  safeguards  of  the  law  on  that  subject.  And  if 
the  law  of  the  State  where  the  case  occurred  gave  to  the  wife,  so 
far  as  her  property  was  concerned,  the  status  of  a  single  woman, 
she  might  then  be  a  partner. 

§  22.  Aliens.  —  An  alien  friend  can  be  a  partner  in  a  com- 
mercial house ;  for  there  is  nothing  to  prevent  his  holding  any 
personal  property,  or  in  bringing  and  maintaining  or  defending 
any  suits,  (a)  If  the  property  of  the  firm  were  in  part  or  in  whole 
real  estate,  a  question  might  arise.  If  the  estate  was  in  a  country 
in  which  aliens  could  not  hold  land,  the  legal  title  certainly  could 
not  be  in  him  ;  but  we  think  that  courts  of  equity  would,  in  that 
case,  recognize  the  fact  that  the  partners  possess  the  legal  title  as 
trustees  for  the  partnership.  They  would  certainly  do  this  where 
one  of  many  partners  alone  holds  the  title,  and  there  Avere  no 
aliens ;  and  we  see  no  sufficient  reason  why  they  should  not,  if 
one  or  more  of  the  cestuis  que  trustent  were  aliens.  (6) 

in   any  way   meddled  with    them.     The  and  attended  company  meetings,  at  which 

company's   deed  of   settlement  provided,  only   shareholders    were    entitled    to     he 

that  the  husband  of  a  female  shareholder  present.     It  is  to  be  observed,  that,  in  this 

should  not,  merely  in  respect  of  his  wife's  last   case,    upon   the   authority  of  which 

sliares,  become  a  member  of  the  company,  Dodgson  i'.  IJell  was  decided,  great  stress 

but  that  he  nmst  tirst  comply  with  certain  is  laid  by  the  judges  upon  the  fact  that 

conditions.     The    defendant    not    having  the    remedy    attempted    to    be    enforced 

fulfilled  these  conditions,  it  was  held,  that  against   the   defendant,   as   a   partner  by 

he  was  not  a  member  against  whom  a  sci.  virtue  of  his  wife's  interest,  was  an  extra- 

/a.  to  levy  exeaution  under  Stat.  Geo.   4,  ordinary  statutable  remedy.     In  both  these 

eh.  46,  §  13,  could  issue.     The  same  was  cases  the  question   was   as   to  who  were 

held  in  Ness  v.  Angas,  3  Exch.  806,  where  partners  inter  se,  and  not  as  to  who  were 

the   defendant's  wife   had    bought  shares  partners  with  respect  to  third  persons.    In 

after  her  marriage,  with  the  consent  of  her  re  Keene's  Executors,  3  De  G.   M.  &  G. 

husband,  but  out  of  the  proceeds  of  her  272. 

own  estate  ;   and  this  although  her  hus-  [See  Miller  v.  Marx,  65  Tex.  131.] 
band  had  received  some  of  the  dividends,  (n)  Co.  Litt.  129  b. 

signed    receipts    therefor   as    her   agent,  (b)  See/)os<,  oh.  11. 


26 


THE    LAW    OF    PARTNERSHIP. 


[CH.   III. 


The  rule  is  quite  otherwise  as  to  alieu  enemies.  Here  partner- 
ship is  impossible,  (c)  And  if  there  be  a  partnership  with  an 
alien  friend,  and  war  breaks  out  between  the  countries,  it  entirely 
suspends  the  partnership.  From  the  language  sometimes  used,  it 
might  be  inferred  that  a  war  would  terminate  and  annul  such 
])artnership  altogether ;  (tf)  and  it  might  have  this  effect  in  many 
cases.  But  where  the  terms  and  business  and  state  of  affairs  of 
the  partnership  were  such  that  an  entire  suspension  of  all  rights 
and  intercourse  during  the  war  would  still  leave  the  partnership 
in  a  condition  to  go  on  as  before  when  the  war  ended,  we  should 
say  that  the  partnership  revived  by  peace,  and  did  not  need  to  be 
created  anew. 

No  alien  enemy  can  bring  any  action  in  any  court  of  the  hostile 
country,  (e)  And  this  rule  has  been  applied  to  a  citizen  then 
resident  in  a  foreign  country,  on  the  ground  tliat  if  he  prevailed, 
and  funds  in  satisfaction  of  his  judgment  were  remitted  to  the 
foreign  country,  it  would  be  a  strengtheiiing  of  the  enemy.  (/) 

There  is  nothing  to  prevent  a  firm  consisting  wholly  of  aliens 
from  having  an  agency  in  this  country,  and  bringing  any  personal 
actions.     Even  if  husband  and  wife  form  a  commercial  partner- 


(c)  The  reason  is,  that  the  existence  of 
a  state  of  hostility  between  two  countries 
renders  illegal  all  comnieicial  intercourse 
between  their  citizens.  Bristow  v.  Tow- 
ers, 6  T.  R.  35  ;  Potts  v.  Bell,  8  T.  R.  548  ; 
Willison  ;;.  Patteson,  7  Taunt.  439;  The 
Hoop,  1  C.  Rob.  Adni.  196  ;  The  Indian 
Chief,  3  C.  Rob.  Adm.  22  ;  The  Jonge 
Pieter,  4  C.  Rob.  Adm.  79  ;  The  Franklin, 
6  C.  Rob.  Adm.  127  ;  Ex  parte  Bouss- 
raaker,  13  Ves.  71  ;  Griswold  v.  Wadding- 
ton,  15  Johns.  57,  16  Johns.  438  ;  The 
Rapid,  8  Craneh,  155  ;  The  Julia,  1  C. 
Rob.  Adm.  181  ;  Scholefield  v.  Eichel- 
berger,  7  Pet.  585  ;  The  San  Jose  Indiano, 
2  Gall.  268.  See  upon  this  subject  a 
learned  note  to  the  case  of  Clemontson  v. 
Blessing,  11  Exch.  135. 

{d)  See  Griswold  v.  Waddington,  15 
Johns.  57  ;  16  Johns.  438.  A  commercial 
partnership  between  citizens  of  the  respec- 
tive belligerents  was  dissolved  by  the  late 
rebellion.  Woods  r.  Wilder,  43  N.  Y.  164. 
But  the  general  doctrine  of  the  text  seems 
to  lie  upheld  by  the  weight  of  modern  au- 
thority. Kenshaw  v.  Kelsey,  100  Mass. 
561  ;  Cohen  i-.  N.  Y.  Life' Ins.  Co.,  50 
xs.  Y.  610.     See  also  Mutual  Benefit  Life 


Ins.  Co.  V.  Hildyard,  37  N.  J.  L.  444, 
where  the  cases  upon  the  efl'ect  of  war 
upon  the  abrogation  of  contracts  are  fully 
collected.  N.  Y.  Life  Ins.  Co.  v.  Statham, 
93  U.  S.  24. 

(e)  Co.  Litt.  129  b  ;  Anthon  v.  Fisher, 
Dougl.  649,  note ;  Brandon  v.  Nesbitt, 
6  T.  R.  23  ;  Willison  v.  Patteson,  7  Taunt. 
439  ;  Griswold  v.  Waddington,  15  Johns. 
57  ;  16  Johns.  438 ;  Hoare  v.  Allen,  2 
Dallas,  102.  And  the  disability  to  sue 
attaches  to  an  alien  carrying  on  trade  in 
an  enemy's  country,  though  he  resides 
there  also  as  consul  of  a  neutral  country. 
His  individual  character  for  purposes  of 
trade  is  not  merged  in  his  national  char- 
acter. Albretcht  v.  Sussman,  2  Ves.  &  B. 
323.  The  wife  of  an  alien  enemy  is  also 
disabled  from  suing  in  her  own  name  on 
a  conti'act  made  either  before  or  during 
coverture.  De  Wahl  v.  Braune,  1  H.  & 
N.  178. 

(/)  M'Connell  v.  Hector,  3  B.  &  P. 
113  ;  O'Mealey  v.  Wilson,  1  Camp.  482  ; 
Rolierts  v.  Hardy,  3  M.  &  S.  533  ;  The 
Julia,  8  Craneh,  181  ;  Griswold  v.  Wad- 
dington, 16  Johns.  438. 


§   24.]  OF    PARTNERS.  27 

ship  in  a  foreign  country  in  wliicli  such  a  partnership  could  leually 
exist,  it  would  be  ditiicult  to  say  that  they  could  not  maintain  an 
action  together  in  this  country,  even  as  joint  plaintiffs,  however 
unusual  such  a  thing  might  be.  (^) 

§  23.  Insane  Persons.  —  A  fatuous  or  insane  person  could 
neither  transact  business  on  his  own  account  nor  as  a  partner. 
The  degree  of  mental  incapacity  which  should  have  this  effect  is 
hardly  capable  of  definition ;  and  the  question  whether  it  existed 
might  bo  a  difficult  ([uestion  of  mixed  law  and  fact.  So,  if  one  were 
generally  sane,  with  attacks  of  insanity,  or  generally  insane,  with, 
lucid  intervals,  it  might  be  difficult  to  apply  the  rule ;  (A)  but  the 
rule  itself  certainly  must  be  that  no  one  is  incapacitated  from 
becommg  a  partner  who  is  able  to  transact  business  of  his  own. 

To  those  under  guardianship  as  spendthrifts  or  otherwise,  or 
whom  habitual  intoxication  has  enfeebled  and  stultified,  a  similar 
rule  must  apply,  (i)  They  are  incompetent  to  transact  business 
on  their  own  account,  and  therefore  incapable  of  entering  into  a 
commercial  partnership.  Q") 

§  24  Corporations.  —  The  question  has  arisen  whether  a  cor- 
poration, considered  as  a  person,  may  become  a  partner,  either 
with  another  corporation  or  with  individuals.^  Perhaps  no  other 
general  rule  on  this  subject  can  be  stated  than  that  a  corporation 
may  incur  the  liability  of  a  partner  as  to  third  persons,  although, 

(g)  See  ch.  9.     [If  they  have  been  sued  clearly  be  avoided  by  proof  that  at  the 

and  judgment  obtained  in  the  jurisdiction  time  it  was  made  one  of  the  parties  "had 

where  they  do  business,  the  wife's  separate  not  an  agreeing  mind  "  through  temporary 

property  will  be  held  on  the  judgment  in  intoxication.     Pitt  v.  Smith,  3  Camj).  33  ; 

a  jurisdiction  where  husband  and  wife  can-  Fenton    r.   Holloway,  1  Stark.  126.     See 

not  be  partners.  Toof  v.  Brewer  (Miss.),  Lightfoot  v.  Heron,  3  Younge  Exch.  586. 
3  So.  571.]  (/)  See  further,  on  the  subject  of  per- 

(h)  See  the  impressive  remarks  of  Lord  sons   of  insufficient   mind  to  contract,   1 

Chancellor  Thurlow,  in  Attorney-General  Fonbl.   E(|.  b.  I,  ch.  2,  §  3  ;  1  Story  Eq. 

V.  Pamther,  3  Bro.  Ch.  441.  ch.  6,  §  229  et  seq.  ;  1  Pars.  Cont.  (5th  ed. ) 

(i)  Menkins  v.  Lightner,  18  111.  282;  b.   1,  ck   20  ;    2  Pothier  on  Obligations, 

Mansfield  v.  Watson,   2  Clarke,  111.     So  App.  Ko.  3,  p.  23. 
an  agreement  to  forui  a  partnei"ship  would 

*  It  seems  clear  that  a  corporation  may  be  empowered  by  its  charter  to  form  a  part- 
nership with  an  individual.  See  Butler  v.  American  Toy  Co.,  46  Conn.  136.  But 
where  no  such  power  is  given  by  the  charter  the  entrance  of  a  corporation  into  a  ]iart- 
nership  is  iil/ra  vires.  Gunn  v.  Central  R.  R.,  74  Ga.  509  ;  Whittenton  Mills  v. 
Upton,  10  Gray,  582;  Hackett  v.  Multnomah  Ry.,  12  Ore.  124  ;  6  Pac.  659;  Mallory 
V.  Hanaur  Oil  Works,  86  Tenn.  598  ;  8  S.  W.  396. 

In  Allen  v.  Woonsocket  Co.,  11  R.  I.  288.  it  was  held  that  a  corporation  might 
become  partner  with  an  individual  where  the  charter  did  not  specify  the  business  of  the 
corporation  ;  the  individual  was  to  have  no  voice  in  the  partnership  business,  and  all  tlie 
stock  of  the  corporation  was  in  the  hands  of  a  single  owner.  The  case  therefore  turned 
on  special  facts  and  is  of  no  weight  as  an  authority. 


28 


THE   LAW   OF   PARTNERSHIP. 


[CH.    III. 


on  general  principles,  it  would  be  inconvenient,  if  not  impossible, 
for  a  corporation,  which  is  only  a  legal  person,  to  enter  into  a  full 
copartnership,  either  with  another  legal  person  or  with  natural 
persons.  (Ar) 

§  25.  Firms.  —  [An  already  existent  firm  may  enter  into  a 
partnership  with  an  individual.  In  such  a  case  the  new  partner- 
ship will  commonly  be  made  up  of  the  individual  partners  of  the 
old  firm,  together  with  the  new  partner.  The  old  firm  as  such 
will  not  generally  become  a  member  of  the  new  partnership.^ 
But  it  is  possible  for  two  firms  (or  for  a  firm  and  an  individual) 
to  enter  into  a  partnership  upon  such  terms  that  the  old  firms, 


(A)  As  the  whole  power  of  a  corpora- 
tion is  derived  from  its  charter,  it  may 
well  be  questioned  whether  it  could  enter 
into  a  partnership  for  the  transaction  of  a 
business  different  from  the  object  for  which 
it  was  chartered.  And  it  seems  that  two 
or  more  corporations  cannot  consolidate 
theii  funds,  or  form  a  partnership,  unless 
authorized  by  exjiress  grant  or  necessary 
implication.  In  Sharon  Canal  Co.  v.  Ful- 
ton Bank,  7  Wend.  412,  the  court  say  : 
"  It  cannot  be  necessary  to  decide  whether 
it  is  in  the  power  of  the  two  corporations, 
who  are  the  plaintiffs,  to  consolidate  their 
stock  or  to  form  a  partnership.  General 
princi[»les  are  against  the  power  of  corpo- 
rations to  do  such  acts.  They  have  no 
powers  but  such  as  are  granted,  and  such 
as  are  necessarily  incident  to  the  grant 
made  to  them.  Corporations  at  conmion 
law  have  certain  power.s,  but  not  such  as 
Vould  authorize  the  forming  of  a  partner- 
ship, or  the  consolidation  of  two  corpora- 
tions into  one."  It  is  a  different  iiuestion, 
whether  a  corporation  may  not  render  it- 
self liable  to  third  parties  as  a  quasi  part- 
ner by  its  acts  ;  and  we  know  of  no  rea.son 
why  this  might  not  be  the  case.  The  sub- 
ject was  before  the  court  in  Holmes  v. 
Old  Colony  R.  R.  Co.,  5  Gray,  58  ;  but  as 
the  acts  of  the  corporation  were  held  not 
sufficient  to  constitute  a  {partnership  lia- 
bility as  to  third  parties,  there  was  no 
direct  decision  upon  the  question  whether 
a  corporation  could  be  held  as  partner. 
In  Catskill  Bank  v.  Gray,  14  Barb.  479, 
one  of  the  questions  presented  was  whether 


a  corporation  could  be  a  partner  with  an 
individual  even  as  to  liability.  The  lan- 
guage of  the  court  is  :  "  Strictly,  perhaps, 
corporations  should  be  and  are  restricted 
from  contracting  partnerships  with  indi- 
viduals or  corporations,  and  as  between 
the  parties  to  the  contract,  acting  upon 
equal  knowledge,  a  question  of  validity 
might  be  raised  ;  but  a  corporation  may 
contract  with  an  individual  in  furtherance 
of  the  object  of  its  creation,  the  effect  of 
which  contract  may  be  to  impose  upon  the 
company,  as  respects  the  community,  the 
liabilities  of  a  partner.  I  cannot  think 
that  a  corporation  may  so  shape  its  con- 
tracts, relating  to  the  business  for  which 
it  was  incorporated,  as  to  share  jointly 
with  an  individual  in  the  profits  of  such 
business  ;  subtract  its  interest  in  the  profits 
from  the  fund  on  wliich  the  creditors  of 
the  concern  had  a  right  to  rely  for  the 
payment  of  the  debts  due  to  them  ;  and, 
when  called  upon  by  such  creditors,  be 
permitted  to  escape  liability  altogethei,  on 
the  ground  that  the  profits  were  realized 
as  the  partner  of  an  individual,  which  re- 
lation the  corporation  could  not  legally 
occupy.  I  know  of  no  sound  reason  why 
a  corporation,  more  than  a  natural  person, 
who  participates  in  the  profits  as  such  of  a 
particular  business  in  which  it  may  law- 
fully engage,  should  not  be  holden  to  the 
public  for  losses."  See  Marine  Bank  v. 
Ogden,  29  111.  248.  [Cleveland  Paper  Co. 
V.  Courier  Co.,  67  Mich.  152;  34  N.  W. 
556] 


1  Meyer  v.  Krohn,  114  111.  574,  2  N.  E.  495. 


§  28.]  OF   PARTNERS.  29 

and  not  their  individual  members,  should  be  the  partners  in  the 
new  firm.^] 

§  26.  The  Kinds  of  Partners.  Different  names  are  given  to 
partners,  desci-ibing  their  respective  relations  to  the  partnership. 
The  principal  names  are  :  1.  Ostensible,  or  Public.  2.  Secret, 
or  Unknown.  3.  Nominal.  4.  Silent.  5.  Dormant.  6.  Retiring. 
7.  Incoming.     8.  General.     9.  Si)ecial. 

§  27.  Ostensible  or  Public  Partners.  — This  name  indicates  that 
the  partner  is  "  shown  forth  "  to  the  world  as  one.  If  this  is 
done  with  his  own  consent,  all  the  liability  of  a  partner  attaches 
to  him.  There  is  no  special  way  of  holding  such  partner  forth. 
It  may  be  done  by  having  his  name  in  the  firm  or  style  of  the 
partnership,  or  on  the  signs  at  the  door,  or  by  advertisement,  or 
by  circular  letters.  (0  Indeed,  if  a  partner  generally  unknown 
is  made  known  as  such  in  any  way  to  any  one  man,  with  his  own 
consent,  he  is,  so  far  as  that  man  is  concerned,  an  ostensible 
partner  in  every  legal  aspect  and  liability,  as  much  as  if  adver- 
tised to  the  world.  In  this  sense,  therefore,  there  would  be  a 
difference  between  the  words  "  ostensible  "  and  "  public,"  —  the 
latter  meaning  shown  as  a  partner  to  all  the  world, — although 
these  two  words  are  commonly  used  as  synonymous.''' 

§  28.  Secret  or  Unknown  Partners.  —  He  is  a  secret  partner 
who  keeps  Iiimself  concealed  from  the  public,  and  from  all  the 
customers  of  the  partnership.  (?«)  We  shall  hereafter  see  that 
neither  the  word  "  Co.,"  nor  any  other  public  designation  of  a 
copartnership  is  necessary  to  bind  all  the  partners.  But  this 
important  distinction  is  to  be  taken :  A  partner  is  liable  either 
because  he  is  one  in  fact,  or  because  he  holds  himself  out  or 
suffers  himself  to  be  held  out  as  one.  In  the  latter  case,  he  is 
liable  whether  actually  a  partner  or  not,  as  we  shall  presently  see. 
But,  in  the  former  case,  he  is  not  liable,  unless  it  can  be  shown 
that  he  is  actually  a  partner.  If  he  is,  he  has  gained  nothing  by 
being  secret.  Of  course,  so  long  as  he  is  undiscovered  he  is  safe  : 
but  as  soon  as  he  is  found  to  be  a  partner,  even  if  this  be  not 
until  after  an  action  has  been  brought  against  the  other  partners, 

{I)  Partners  whose  names  are  not  ex-  (»i)  United  States  Bank  v.  Binney,  5 

pressed  in  the  firm,  but  who  are   simjily     Mason,  185.      [Harris   v.  Crary,  67  Tex. 
indicated    by   the   word    "Co.,"  are   not     383,  3  S.  W.  316.] 
dormant,  but  ostensible,  partners.     God- 
dard  V.  Pratt,  16  Pick.  428. 

1  III  re  Hamilton,  1  F.  R.  800.     See  also  Meador  v.  Hughes,  14  Bush,  652. 

2  In  Harris  v.  Crary,  67  Tex.  383,  3  S.  W.  316,  the  term  "ostensible  partner"  is 
used  in  the  sense  of  "nominal  partner." 


so 


THE   LAW   OF   PARTNERSHIP. 


[CH.    III. 


he  becomes  liable ;  because,  although  he  added  no  credit  to  the 
firm,  and  permitted  no  debt  to  be  incurred  on  his  credit,  he  is 
equally  liable  as  if  he  had  done  this,  from  the  mere  fact  that  he 
shared  the  advantages  of  the  partnership. 

If  a  secret  partner  is  announced  as  a  partner  to  a  customer, 
without  his  own  consent  or  connivance  or  ratification,  his  rights 
are  wholly  unaffected  by  the  customer's  knowledge,  and  dc)>end 
entirely  upon  the  fact  of  his  partnership.  Not  so,  as  we  have 
seen  in  the  preceding  section,  if  he  permits  himself  to  be  made 
known  as  a  partner  to  a  customer.^ 

§  29.  Nominal  Partners.  —  Every  ostensible  partner  is  a  nomi- 
nal or  known  partner ;  but  by  this  designation  is  usually  meant, 
that  the  partner  is  only  nominally  one.  (n)  That  is,  he  is  so  held 
forth  as  a  partner,  with  his  own  consent,  by  any  of  the  means 
usually  employed  for  that  purpose,  as  to  make  him  liable  as  a 
partner  on  the  ground  that  he  has  given  his  credit  to  the  firm, 
and    authorized    engagements   on   his   account,  (o)      It   follows, 


(/t)  Ex  parte  Chuck,  8  Bing.  469.  See 
Cunier  v.  Silloway,  1  Allen,  19  ;  Lindsey 
V.  Edniin.ston,  25  111.  359 ;  Jacobsen  v. 
Hennekenius,  1  Bro.  P.  C.  432  ;  Fox  v. 
Clifton,  6  Bing.  795  ;  Hicks  v.  Cram,  17 
Vt.  449.  Hence  one  who  is  merely  a 
nominal  partner  with  another  man  may 
be  called  by  him  as  witness.  He  is  not 
incompetent  on  the  score  of  interest. 
Parsons  v.  Crosby,  5  Esp.  199  ;  Mawman 
V.  Gillett,  2  Taunt.  327. 

(o)  The  ground  of  the  liability  of  a 
nominal  partner  is  thus  stated  in  a  leading 
case,  Waugh  v.  Carver,  2  H.  Bl.  235:  "A 
case  may  be  stated,  in  which  it  is  the  clear 
sense  of  the  parties  to  the  contract  that 
they  shall  not  be  partners  ;  that  A.  is  to 
contribute  neither  labor  nor  money,  and, 
to  go  still  farther,  not  to  receive  any  j)rofits. 
But,  if  he  will  lend  his  name  as  a  partner, 
he  becomes  as  against  all  the  rest  of  the 
world  a  partner,  not  upon  the  ground  of 
tlie  real  tran.saction  between  them,  but 
upon  principles  of  general  policy,  to  pre- 
vent the  frauds  to  which  creditors  would 
be  liable,  if  they  were  to  suppose  that 
they  lent  their  money  upon  the  apparent 
credit  of  three  or  four  persons,  when  in 
fact  they  lent  it  only  to  two  of  them,  to 
whom,  without  the  others,  they  would 
have  lent  nothing."     So  in  Ex  parte  V/at- 


son,  19  Ves.  461,  Lord  Eldon  says  :  "There 
is  a  wide  difference  between  a  dormant  and 
nominal  partner.  The  former  is  liable  in 
respect  of  the  j)rofits  ;  .  .  .  but  if  one, 
retiring  or  coming  into  the  trade,  suffers 
his  name  to  be  used,  it  is  of  no  con- 
sequence whether  he  has  a  salary  or  sura 
of  money,  to  be  paid  by  others,  or  to  be 
got  out  of  the  profits.  It  is  the  use  of 
the  name  that  makes  him  liable,  as  one  of 
the  persons  by  and  to  whom  everything  is 
bought  and  sold."  So,  in  Hicks  v.  Cram, 
17  Vt.  449,  the  court  say:  "  It  is  the  rep- 
resenting one's  self,  or  suffering  one's  self 
to  be  represented,  as  a  partner,  that  creates 
a  liability  to  third  persons  ;  and  this  is 
sufficient  to  create  a  liability,  notwith- 
standing the  truth  should  prove  to  be,  that 
the  person  so  suff"ering  himself  to  be  held 
out  as  partner,  in  fact  was  not  so.  This 
is  in  order  to  preserve  good  faith  and  pre- 
vent fraud,  and  is  almost  the  only  ground 
of  an  estoppel  m  pais.  If  one  man  has 
made  a  representation  which  he  expects  an- 
other may  or  will  act  upon,  and  the  otlier 
does  in  fact  act  upon  it,  he  is  esto{i])ed 
to  deny  the  truth  of  the  representation. 
So,  too,  equally,  when  one  remains  silent, 
and  suffers  another  to  make  the  representa- 
tion." 


1  Milmo  Nat.  Bank  v.  Carter  (Tex.),  20  S.  W.  836. 


§  31.]  OF    PARTNERS.  31 

therefore,  that  if  a  person  suffers  himself  to  be  regarded  as  a 
partner  by  any  customer  of  the  firm,  to  him  he  is  liable  as  if  he 
were  one,  although  he  is  in  fact  no  partner,  and  not  generally 
supposed  to  be  one.  The  nominal  partner  is  the  converse  of  the 
secret  partner. 

§30.  Silent  Partners.  —  This  name  is  pro])crly  and  generally 
ai)plied  to  those  who  take  no  active  part  whatever  in  the  business 
of  the  firm,  and  exercise  none  of  the  rights  of  a  partner,  except 
that  of  receiving  their  share  of  the  profits  from  time  to  time.  He 
is  a  silent  partner,  whether  his  name  be  made  known  in  any  way 
as  a  partner  or  not.  There  is,  however,  a  very  common  use  of 
the  word  "  silent,"  which  differs  somewhat  from  that  above  stated. 
It  seems  to  be  thought  that  he  only  is  a  silent  partner  who  is 
silent  to  the  world  in  respect  to  his  interest  in  the  firm,  as  well 
as  silent  within  the  firm  in  its  transaction  of  business.  In  this 
sense,  a  silent  partner  is  one  who  is  both  inactive  and  unknown. 
And  there  are  those  who  go  so  far  as  to  think  the  silence  to  the 
world  to  be  the  main  thing,  understanding  by  the  phrase  "  silent 
partner"  one  who  is  not  known  as  such,  whether  active  or  other- 
wise ;  thus  making  the  word  "  silent  "  synonymous  with  the  word 
'•secret."  But  the  definition  first  above  given  is  the  most  reason- 
able, and  is   best  sustained. 

§31.  Dormant  Partners.  —  This  phrase  also  is  used  in  some- 
what different  senses.  Indeed,  there  is  much  confusion  and 
inaccuracy  in  the  common  use  of  the  three  words,  —  "  secret," 
"  silent,"  and  "  dormant."  Many  use  this  word  as  if  it  meant 
only  unknown  and  secret ;  and  apply  the  designation  of  dormant 
or  sleeping  to  partners  whose  names  are  concealed,  however 
awake  and  active  they  may  be  in  the  business  of  the  firm. 
Others  consider  the  word  as  properly  applied  to  those  only  who 
are  wholly  inactive  in  the  business,  whether  known  to  have  an 
interest  or  not.  We  think,  however,  the  word  implies  both  the 
qualities  of   secrecy  and   inactivity.  (^)     It   seems   to   be   most 

(p)  These  two  qualities  are  attributed  declarations  of  the  acting,  avowed  part- 
to  the  dormant  partner  in  the  following  ners  :  it  may  enable  them  to  reach  the 
expression  of  the  difference  between  a  dormant  one,  if  the  transaction  is  one  in 
dormant  and  an  open  partnership.  "  It  which  he  had  an  interest,  but  does  not 
seems  to  me  to  be  this  :  where  the  names  alter  its  nature.  The  partnership  remains 
of  the  partners  do  or  do  not  appear  in  dormant  as  to  all  whose  names  do  not 
their  accounts,  their  advertisements,  or  appear  on  its  transactions.  The  dormavf, 
their  paper, —  where  the  business  is  carried  the  sleeping,  inactire  partner  may  be  known 
on  in  the  name  of  all,  it  is  open  ;  but,  if  by  reputation,  or  the  declaration  of  his 
any  are  kept  hack,  it  is  dormant ;  that  the  copaitner  ;  but  these  do  not  make  him  an 
knowledge  which  the  pulilic  may  have  is  avowed  or  active  one,  without  the  avowal 
not  the  test,  when  it  is  acquired  from  the  and  pledge  of  his  name  or  paper."     Per 


32  THE   LAW   OF   PARTNERSHIP.  [CH.    III. 

coraraoii  and  most  convenient  to  use  the  word  as  indicating  a 
partner  who  both  keeps  himself  concealed,  and  who  also  refrains 
from  any  active  interference  with  the  business  or  management  of 
the  firm.  But  the  word  is  so  often  used  as  merely  synonymous 
with  "  unknown,"  that  we  shall  frequently  be  obliged  to  employ 
it  or  refer  to  it  in  this  sense. 

§  32.  Retiring  Partner.  —  He  is  one  who  leaves  an  existing  firm. 
In  law,  as  we  shall  see,  the  going  out  of  a  partner,  by  his  own  act, 
or  decree  of  court,  or  by  death,  terminates  that  partnership.  But 
in  practice  it  is  otherwise.  Some  old  firms  have  continued  to  use 
the  same  style,  and  to  transact  their  business  as  one  and  the  same 
copartnership,  with  all  the  continuity  of  a  corporation,  although 
not  only  all  the  original  members,  but  all  who  immediately  suc- 
ceeded them,  have  passed  away.  In  some  of  the  commercial  cities 
of  Europe,  there  are  said  to  be  active  firms  established  under  their 
present  names  by  the  great  grandfathers  of  those  who  are  now 
members.  In  this  country  it  is,  however,  more  common  to  an- 
nounce these  changes  by  a  corresponding  change  in  the  style  of 
the  firm. 

§  38.  Incoming  Partner.  —  This  phrase  designates  a  person  who 
enters  into  an  existing  copartnership,  and  becomes  a  member  of 
it.  Here  it  may  be  said,  as  before,  that  any  such  change  as  the 
addition  of  a  new  member  terminates  the  former  copartnership  in 
law  and  creates  a  new  one.  (/*jj)     But  in  practice  it  is  not  so ;  the 

Baldwin,  J.,  in  Winship  v.  Bank  of  the  or  traders  with  whom  they  engage  in  a  gen- 
United  States,  5  Pet.  573.  In  Mitchell  v.  eral  partnership  of  all  their  stock  and  ef- 
Dall,  2  H.  &  G.  159,  however,  and  Bank  fects,  yet  not  suffering  their  names  to  appear 
of  St.  Mary's  v.  St.  John,  25  Ala.  566,  in  the  copartnership  firm,  but  at  the  same 
persons  seem  to  have  been  held  dormant  time  receiving  a  proportionate  share  of  the 
partners,  who,  though  tiieir  names  were  i>rotits  arising  out  of  their  joint  trade, 
concealed,  took  an  active  part  in  the  busi-  bearing  equally  their  risk  of  loss  ;  and 
ness  of  the  firm.  See  Lloyd  v.  Archbowle,  such  are  usually  styled  dormant  partners." 
2  Taunt.  324  ;  Kelly  v.  Hurlburt,  5  Cowen,  See  North  v.  Bloss,  30  N.  Y.  374  ;  Waite 
534  ;  Hoare  v.  Dawes,  1  Dong.  371  ;  Ex  v.  Dodges,  34  Vt.  181.  [That  a  dormant 
parte  Watson,  19  Ves.  461  ;  Shropshire  v.  pai-tner  must  be  both  concealed  and  inact- 
Shepherd,  3  Ala.  733.  The  definition  and  ive,  see  Elmira  Iron  &  Steel  R.  M.  Co.  v. 
illustration  of  dormant  partner.ship  in  Harris,  124  N.  Y.  280,  26  N.  E.  541; 
Watson  on  Partnership,  p.  46,  seems  compare  Metcalf  v.  Officer,  2  F.  R.  640. 
accurate:  "  Sometimes  all  the  partners  in  Where  the  firm  name  does  not  contain 
tradedonotappearostensibly  to  the  world,  the  name  of  partners,  none  of  the 
though  they  share  in  the  profits  and  loss  ;  partners  seem  to  be  dormant :  since  credit 
and  it  is  not  unusual  for  gentlemen  of  is  given,  not  to  known  partners,  but  to  all 
large  and  independent  fortunes  to  embark  who  in  fact  are  interested.  Clark  v.  Flet- 
very  considerable  sums  of  money  in  trade,  cher,  96  Pa.  416.] 

they    being   oftentimes    ignorant   of    the  {pp)  Mudd     v.     Bast,     34    Mo.     465. 

science  of  commerce,  and  meaning  to  de-  When    two    partners    enter  into    another 

pend  entirely  upon  the  skill  of  merchants  partnership  with  a  third  person  they  are 


§  36.]  OF   PARTNERS.  33 

old  firm  being  "  kept  up,"  as  the  common  phrase  is,  by  former 
members  going  out  from  time  to  time,  and  new  members 
coming  in. 

§  34.  General  Partner.  —  This  is  a  ncw  phrase  with  us,  and  is, 
at  least  in  our  sense  of  it,  unknown  in  the  English  law.  It  means 
one  who  is  that  member  of  a  Limited  Partnership,  under  our  stat- 
utes, who  transacts  the  l)usiness,  whose  name  is  used  in  the  firm, 
and  who  is  liable  for  all  the  debts  and  obligations  of  the  firm,  to 
their  full  amount. 

§  85.  Special  Partner.  —  He  is  One  who  Supplies  a  certain 
amount  of  capital,  and  who,  if  he  complies  with  all  the  re(|uire- 
ments  of  the  statutes,  is  not  liable  for  the  debts  of  the  firm  beyond 
the  amount  which  he  contributes  to  the  capital. 

§  36.  Sub-Partner.  —  [Sub-partner  is  the  name  often  given  to 
one  with  whom  a  partner  shares  his  profits  by  agreement.^  Since, 
however,  such  a  person  is  neithei-  in  fact  a  partner  nor  is  he  held 
liable  as  a  partner,  the  term  sub-partner  is  misleading  and  not  to 
be  commended.] 

We  have  been  somewhat  precise  in  defining  these  different 
classes  or  kinds  of  partners,  because  it  will  be  seen  in  our  subse- 
quent chapters  that  especial  rights,  obligations,  liabilities,  and 
remedies  belong  to  them  severally. 

in  the  new  partnership  as  individuals,  amongst  the  three.  'Warner  v.  Smith, 
and  the  profits  are  to  be  divided  equally     9  Jur.  N.  s.   168. 

1  Nirdlinger  v.  Bernheimer,  133  X.  Y.  45  ;  30  N.  E.  561, 


34  THE   LAW   OF   PARTNERSHIP.  [CH.    IV. 


CHAPTER    IV. 

OF   THE   PURPOSES   AND    KINDS   OF   PARTNERSHIP, 

§  37.  Purposes  for  •which  Partnerships  may  be  formed. —  Although 
partnerships  are  usually  formed  for  commercial  purposes,  the}'  are 
not  always  so,  and  tliere  is  scarcely  any  occupation  which  an  indi- 
vidual can  legally  pursue  that  may  not  be  the  subject  of  partner- 
ship. In  this  counti-y  we  have  a  far  wider  extent  in  the  variety 
of  purposes  for  which  partnerships  are  established,  than  anywhere 
else.  Thus,  we  have  partnerships  not  only  for  every  known 
branch  of  commercial  business,  but  for  all  kinds  of  farming,  (a) 
or   manufacturing,   mining,  (hy  stage-driving,  fishing,    hunting, 

(a)  See  opinion  of  Gould,  J.,  in  Coope  estates  are  quite  different  in  the  contempla- 

V.   Eyre,  1  H.  Bl.  37  ;  Allen  v.  Davis,  13  tion  of  this  court ;  a  colliery  being  always 

Ark.  28;    Lansdale  c.  Biashear,  3  T.  B.  considered  as  a  trade,  the  profits  accruing 

Mon.  330  ;  Quine  v.  Quine,  9  Smedes  &  from  day  to  day  as   in  all  trading  con- 

M.    155;    Roach    v.    Perry,    16    111.    37.  cerns."    Story  r.  Ld.  Winsor,  2  Atk.  630 ; 

Jointly  buying  and  selling  cattle  may  con-  Wien  v.   Kirton,  8  Yes.   502;   Crawshay 

stitute  a  tiading  paitnersliip.     Smith  v.  v.  Maule,    1    Swanst.   495,  518  ;   Fereday 

Collins,  115  Mass.  388.  v.  Wightwick,  Tamlyn,  250  ;   Jeffreys  v. 

{/))  In  England  mines  have  never  been  Smith,   1  Jac.  &  W.   298.     See  Beatty  v. 

regarded  in  equity  as  real  estate,  but  uni-  Bates,    4   Y.  &   C.    Exch.    182  ;    Roberts 

fornily  as  the  regular  subject  and  substra-  v.  Everhardt,  1  Kay,  148.     The  whole  sub- 

tum  of  a  trade.     In  Williams  v.  Attenbor-  ject  of  partnership  in  mines,  as  treated  in 

ough.  Tarn.  &  Russ.  70,  the  language  of  the  the  English  courls,  is  considered  in  a  sepa- 

Lord  Chancellor  is :  "Collieries  and  landed  rate  chapter  in  Collyer  on  Part.  b.  5,  ch.  2. 

1  A  mining  partnership  is  created  when  the  owners  of  a  mine  operate  it  for  their 
joint  benefit.  Manville  (-.  Parks,  7  Col.  128;  Meagher  f.  Reed,  14  Col.  335,  24  Pac. 
681  ;  Snyder  v.  Burnham,  77  Mo.  52. 

Mining  partners  own  the  mine  in  common  ;  and  therefore  in  case  of  an  action  against 
the  partnership  only  the  shares  of  those  partners  who  were  served  with  jirocess  can  be 
sold  on  execution.  Santa  Clara  Mining  Assoc,  v.  Quicksilver  Mining  Co.,  17  F.  R. 
657,  8  Sawy.  330. 

There  is  no  delectus  pcrsonarum ;  therefore  a  partner  may  convey  his  share  in  the 
mine  without  the  consent  of  his  copartners,  and  the  a.ssignee  becomes  a  i)artner.  Nisbet 
V.  Nash,  52  Cal.  540  ;  Meagher  r.  Reed,  14  Col.  335,  24  Pac.  681.  And  the  partner- 
ship  is  not  dissolved  by  the  death  or  bankruptcy  of  a  partner,  or  by  as.=ignment  of  a 
partner's  interest  to  a  stranger.  Kahn  v.  Central  Smelting  Co.,  102  IT.  S.  641  ;  Lamar 
V.  Hale,  79  Va.  147.  There  is  no  fiduciary  relation  between  the  partners  ;  one  jiartner 
may  therefore  buy  up  the  share  of  another,  and  hold  it  against  his  copartners.  Bissell 
V.  Foss,  114  U.  S.  252. 

A  mining  partnership  imposes  on  the  partners  the  liabilities  of  a  true  partnership, 
so  that  each  is  liable  for  the  entire  amount  on  all  firm  contracts.     Stuart  v.  Adams,  89 


§38.] 


OF   THE   PURPOSES    AND    KINDS   OP   PARTNERSHIP. 


35 


lumbering,  and  the  like,  as  well  as  the  business  of  lawyers,  (c) 
physicians,  ((i)  mechanics,  artists,  laborers,  and,  indeed,  for  almost 
all  otlicr  employments,  (e) 

§  38.  Partnerships  to  deal  in  Land.  —  After  some  question,  it 
seems  to  be  settled,  that  there  may  be  a  partnersliip  for  the  buy- 
ing and  selling  of  land.  (/)  It  is  to  be  remembered,  however, 
that  the  Statute  of  Frauds,  and  our  Statutes  of  Conveyance,  which 
re([uire  that  all  interests  in  land  should  be  transferred  by  a  writ- 
ing signed  and  sealed  by  the  grantor,  and  acknowledged  and 
recorded,  thus  determine  the  legal  title  by  different  evidence  and 
on  different  principles  from  those  which  ai>ply  to  personalty. 
This  has  sometimes  an  important  effect  upon  the  rights  and  obli- 
gations of  partners  in  land  speculations,  and  of  those  who  deal 
with  them.  We  have  already  alluded  to  this  subject,  and  shall 
consider  it  hereafter,  (/y) 


(c)  Marsh  v.  Gold,  2  Pick.  286  ;  West- 
eilo  p.  Evertson,  1  Wend.  532  ;  Warner  v. 
Griswold,  8  Wend.  665  ;  Living.stou  v. 
Cox,  6  Barr,  360  ;  Smith  v.  Hill,  13  Ark. 
173.  See  Jones  ».  Caperton,  15  La.  Ann. 
475. 

(d)  Allen  v.  Blanchard,  9  Cow.  631  ; 
Tlionipsou  p.  Howard,  2  Ind.  245. 

(f)  Thus,  there  may  be  a  partner.shii» 
in  a  terry.  Bowyer  v.  Anderson,  2  Leigh, 
550.  An  association  for  carrying  personal 
property  for  hire  in  vessels  is  a  commercial 
partnership  by  the  laws  of  Louisiana.  Hef- 
ferman  o.  Brenham,  1  La.  Ann.  146.  Ship 
agents  and  ship  brokers  may  be  in  partner- 
shii*  as  to  the  profits  of  their  resi)ective 
commissions.  Waugh  c.  Carver,  2  H.  Bl. 
235.  See  Bovill  v.  Hammond,  9  D.  &  K. 
186  ;  Cheap  v.  Cramond,  4  B.  &  A.  663. 
Private  associations  and  clubs  for  benevo- 
lent and  other  purposes  have  been  regarded 
so  far  as  partnerships  that  their  members 
are  subject  to  liabilities  similar  to  those  of 
partners.  Beaumont  r.  Meredith,  3  Ves. 
&  B.  180.  See  Delauney  v.  Strickland, 
2  Stark.  416.  But  their  liability  seems  to 
rest  on  the  authority  given  to  the  agents 
rather  than  on  partner-ship.  The  points 
of  difference  between  such  associations  and 
trading  partnerships  are  stated  and  illus- 


trated in  Flemyng  v.  Hector,  2  M.  &  W. 
172.     See  post,  §  60. 

(/)  Lands  being  now  so  far  subject  to 
commercial  conditions,  by  the  aid  of  equity, 
as  to  be  capable  of  being  held  as  incident 
to  commercial  partnerships,  there  would 
seem  to  be  no  sufficient  reason  why  they 
may  not,  on  the  same  principles,  and  by 
the  same  equitable  conversion,  be  the  sub- 
stratum itself  of  a  copartnership.  The 
later  cases,  both  in  England  and  in  this 
country,  leave  little  or  rather  no  rooui  for 
doubt  upon  this  point.  Dale  v.  Hamilton, 
5  Hare,  369  ;  Potts  v.  Waugh,  4  Mass. 
424  ;  Fall  River  Wh.  Co.  v.  Borden,  10 
Cash.  458  ;  Smith  r.  Burnham,  3  Sumn. 
435  ;  Kramer  v.  Arthurs,  7  Barr,  165  ; 
Brady  i-.' Calhoun,  1  P.  &  W.  140  ;  Olcott 
V.  Wing,  4  McLean,  15  ;  Smith  v.  Jones, 
12  Me.  332  ;  Dudley  v.  Littlefield,  21  Me. 
418  ;  1)1  re.  Warren,  Davies,  320  ;  Ludlow 
V.  Cooper,  4  Oh.  St.  1  ;  Chester  i\  Dicken- 
son, 54  N.  Y.  1.  See  Patterson  v.  Brew- 
ster, 4  Edw.  Ch.  352;  Claggett  r.  Kilbourne, 
1  Black,  346.  [Corey  v.  Cadwell,  86  Mich. 
570  ;  49  N.  W.  611  ;  Yeoman  v.  Lasley, 
40  Oh.  St.  190  ;  Hulett  r.  Fairbanks,  40 
Oh.  St.  233  ;  Canada  v.  Barksdale,  76  Va. 
899.     See  fost,  §  67.] 

((/)  See  ante,  §  6,  and  -post,  ch.  12. 


Cal.  367,  26  Pac.  970.     But  since  it  is  a  non-trading  partnership,  one  partner  has  no 
authority  to  bind  the  firm  by  a  firm  note.     See  post,  §  85. 

The  owners  of  a  mine  may  of  course,  if  they  choose,  form  an  ordinary  partnership 
for  the  purpose  of  carrying  on  the  niine  by  entering  into  a  partnership  agreement. 
Quinn  v.  Quinn,  81  Cal.  14,  22  Pac.  264  ;  Randall  i;.  Meredith  (Tex.),  11  S.  W.  170. 


36 


THE   LAW   OF   PARTNERSHIP. 


[CH.    IV. 


§  39.  Exercise  of  an  Office.  —  It  is  obvious  that  there  can  be  no 
partnership  in  a  mere  personal  office,  or  in  the  discharge  of  its 
duties;  as  in  the  office  of  guardian,  trustee,  executor,  or  the 
like,  (/i)  These  offices  are  often  held  by  two  or  more  persons 
together;  but  their  powers  and  duties,  and  relations  generally, 
are  governed  by  rules  entirely  distinct  from  those  of  partnership. 

Tliere  are  additional  and  decisive  reasons  against  the  exercise 
of  the  powers  or  the  discharge  of  the  duties  of  any  public  office  by 
a  partnership.  It  might  seem  as  if  there  were  some  offices,  as 
that  of  postmasters,  or  of  examiners  of  steamboats,  or  the  like, 
which  might  be  given  to  a  firm  ;  but  the  principle  of  personal 
selection  and  personal  responsibility  make  it  difficult,  if  not 
imj)ossible,that  a  firm  should  hold  such  an  appointment,  although 
persons  holding  it  sometimes  become  partners,  and  share  in  the 
profits  of  the  appointment,  (i) 

§  40.  Kinds  of  Partnership.  —  Partnerships  may  be  general  or 
special.  In  theory,  it  is  said  they  may  be  universal ;  but  an 
instance  can  seldom  occur  in  which  tlie  partners  own  everything 
in  common,  without  the  reservation  of  any  private  and  exclusive 
property  of  either  of  them,  (j)    We  have,  however,  in  this  country, 

(/()  Thus,  the  office  of  sheriff's  bailiff  is  the  articles  of  agreement  it  was  stipulated 

personal,  and  cannot  be  held  by  two  in  that  B.  should  be  a  partner  with  A.  in  his 

partnership.     Jons    v.    Perchard,    2   Esp.  business,  and  "  that  the  emoluments  aris- 

507.     See  Canlield  v.  Hard,  6  Conn.  180.  ing  from  the  said  offices,  clei-k.ships,  and 

Upon    the    same    principle    a  mercantile  stewardships  as  sliould  be  held  by  eitlier 

partnership,  though  it  may  act  as  execu-  of  them,  the  said- A.  and  B.,  during  the 


tor,  cannot  be  appointed  guanl,ian.  De 
Mazar  v.  Pybus,  4  Ves.  644.  Where,  by 
the  usage  of  the  herald's  office,  a  herald 
and  pursuivant  were  always  in  attendance, 
who  shared  the  profits  of  any  business 
which  was  begun  while  they  were  jointly 


partnershij),  should  be  considered  as  part- 
nership property,  and  be  distributable  ac- 
cordingly." It  was  held  that  the  above 
contract  was  not  void  as  being  an  agree- 
ment for  the  sale  of  an  office,  either  within 
the  5  &  6  Edw.  6,  ch.  16,  or  within  the  49 


on  duty,  it  was  held  that  they  were  in  the     Geo.  3,  cli.  126.     Sterry  v.  Clifton,  9  C.  B. 
situation  of  copartners,  and  might  main-     110. 


tain  a  joint  action  (for  making  out  a  pedi- 
gree) against  the  defendant,  though  he  had 
contracted  only  with  the  herald.  Town- 
send  V.  Neall,  2  Camp.  190.  On  the  other 
hand,  the  appointment  of  one  of  a  firm  to 
the  office  of  shcriH's  replevin  clerk  will  not 
enable  the  finn  to  bring  a  joint  action  for 
the  expenses  of  preparing  a  replevin  bond, 
although  it  was  executed,  and  the  stamp 
for  it  proviiJed,  in  their  office.  Brandon 
V.  Hubbard,  4  .T.  B.  Moore,  367.  See 
Clarke  v.  Eichards,  1  Y.  &  C.  Exch.  3.51. 
A.,  an  attorney  holding  numerous  lucrative 
clerkship.s,  stewardships,  and  other  offices, 
entered  into  copartnership  with   B.     By 


(i)  See  Caldwell  v.  Lieber,  7  Paige, 
483. 

(j)  United  States  Bank  v.  Binney,  5 
Mason,  183.  Story,  J.,  said:  "There  is 
probably  no  such  thing  as  a  universal 
partnership,  if  by  the  terms  we  are  to 
understand  that  everything  done,  bought, 
or  sold  is  to  be  deemed  on  partnership 
account.  Most  men  own  some  real  or 
personal  estate  which  they  manage  exclus- 
ively for  themselves."  [The  so-called 
"  partnership  "  between  husband  and  wife, 
according  to  the  Spanish-Mexican  law,  is 
however  a  universal  partnership.  Fuller 
V.  Ferguson,  26  Cal.  546.] 


§40.] 


OF   TUE   PURPOSES   AND    KINDS    OP   PARTNERSHIP. 


37 


some  associations  whicli  might  perliai)S  be  regarded  as  universal 
partnerships,  (/c)  Special  partnershijjs  relate  only  to  an  owner- 
ship or  use  or  employment  by  partners  of  one  thing,  or  one  cargo, 
or  one  mercantile  adventure,  (l)     It  has  been  said  that  if  a  note 


{k)  Tlie  case  of  Goe.s(;le  v.  Biiiieler,  14 
How,  589,  would  seem  to  establish,  not 
only  that  such  a  partnership  may  exist, 
but  that,  under  able  administration  and 
conduct,  it  is  not  inconsistent  with  a  hifjh 
degree  of  individual  social  prosperity. 
The  defendants  in  the  case  were  members 
of  a  society  called  Se|)aratists,  which 
emigrated  from  Germany  to  the  United 
States  in  1817,  and  settled  in  Ohio,  In 
1819,  articles  of  association  were  drawn 
up  and  signed  by  the  members  of  the 
society,  consisting  of  fifty-three  males 
and  one  hundred  and  four  females.  By 
these  articles,  the  signers  surrendered  all 
their  individual  property,  real  or  personal, 
present  or  future,  into  the  hands  of  three 
directoi's,  elected  annually  by  themselves. 
These  officers  were  to  conduct  the  business 
of  the  society,  to  manage  all  its  property, 
and  to  account  to  the  society  for  all  their 
tiansactions.  In  1824,  the  original  articles 
were  amended.  An  entire  union  of  prop- 
erty, and  an  absolute  renunciation  of 
private  ownership,  were  declared.  Provi- 
sions were  made  for  the  admission  of  new 
members.  The  directors  were  to  conduct 
tlie  allairs  of  the  society  ;  to  apply  them- 
selves for  its  benefit ;  to  provide  for  the 
boarding,  lodging,  and  clothing  of  its 
members  ;  to  provide  for  the  children  ;  to 
determine  disputes,  &c.  Other  of  the  new- 
provisions  related  to  the  general  welfare  of 
the  society.  In  1832,  a  charter  of  incor- 
poration was  granted  them,  in  accordance 
with  which  they  adopted  a  constitution, 
embodying,  with  others,  substantially  the 
same  provisions  as  those  contained  in  the 
articles  of  association  above  referred  to. 
Tlie  extent  of  the  prosperit}',  which,  under 
this  modified  species  of  communism,  the 
association  had  attained  in  the  space  of 
about  thirty  years,  may  be  seen  in  the 
following  extracts  from  the  opinion  of  Mr. 
Justice  McLean  :  "  It  appears,  by  great 
industrj',  economy,  good  management, 
and  energy,  the  settlement  at  Zoar  has 
prospered  more  than  any  part  of  the  sur- 
rounding county.  It  surpasses  probably 
all  other  neighborhoods  in  the  State  in 


the  neatness  and  jinjiiuctiveness  of  its 
agriculture,  in  the  mechanic  arts,  in  manu- 
facturing by  machinery.  The  value  of  the 
property  is  now  estimated  by  complainants' 
counsel  to  be  more  than  a  million  of  dollars." 
Further  :  "Tlie  people  .  .  .  are  proved  to 
be  moral  and  religious.  It  is  said,  that, 
although  the  society  has  lived  at  Zoar  for 
more  than  thirty  yeai's,no  criminal  jn-osecu- 
tion  has  been  instituted  against  any  one  of 
its  members."  There  is  no  legal  objection, 
it  seems,  to  such  an  association.  See  an 
example  ^of  a  similar  association  called 
"The  Harmony  Society."  Baker?;.  Nach- 
trieb,  19  How.  126.  See  Lyman  v.  Lyman, 
2  Paine  C.  C.  11.  [Hamilton  v.  Halpin, 
68  Miss.  99,  8  So.  739.  In  Colton  v. 
Stanford,  82  Cal.  351,  23  Pac.  16,  several 
capitalists  a.ssociated  for  the  purpose  of 
controlling  the  operations  of  various  rail- 
roads and  entering  into  other  enterprises. 
This  was  regarded  as  a  partnership.] 

(I)  The  authority  which  is  usually 
referred  to  for  the  distinction  between 
general  and  special  partnerships  is  a  dictum 
of  Lord  Mansfield  in  Willett  v.  Cliarnbers, 
Cowp.  814.  "Let  us  see,  then,"  said  he, 
"what  was  the  nature  of  the  partnership 
afterwards  entered  into  between  Dodley 
and  the  present  defendant :  whether  it 
was  a  general  partnership  in  all  Dodley's 
business,  or  confined  to  one  particular 
branch  of  it  only  ;  for,  to  be  sure,  there 
may  be  such  a  confined  partnership." 
Veiy  many  cases  have  since  recognized  and 
illustrated  the  distinction.  Salmons  v. 
Nissens,  2  T.  R.  674  ;  Robey  v.  Howard, 
2  Stark.  557  ;  Holmes  v.  Higgins,  1  B.  & 
C.  74  ;  De  Berkom  v.  Smith,  1  Esp.  29  ; 
Livingston  v.  Roosevelt,  4  Johns.  265, 
270  ;  Post  V.  Kimberly,  9  Johns.  470  ; 
Mumford  v.  Nicoll,  20  Johns.  611  ;  Ensign 
V.  Wands,  1  Johns.  Cas.  171  ;  Reynolds 
V.  CHeveland,  4  Cow.  282  ;  Cumpston  v. 
McNair,  1  Wend.  457  ;  Mifflin  v.  Smith, 
17  S.  &  R.  165  ;  Bentley  v.  White,  3  B, 
Mon.  263  ;  Benson  v.  McBee,  2  McMull. 
91  ;  Solomon  v.  Solomon,  2  Kelly,  18  ; 
Rijiley  V.  Colby,  23  N.  H.  438  ;  Petripin 
V.  Collier,  1  Burr,  247. 


38  THE   LAW   OF   PARTNERSHIP.  [CH.    IV. 

or  bill  of  exchange  be  signed  or  indorsed  by  two  or  more  persons 
jointly,  this  is  a  case  of  special  partnership  between  those  persons 
as  to  that  note  or  bill,  (w)  The  name,  however,  or  the  distinc- 
tion, is  of  little  use,  for  all  the  laws  of  partnership  apply  as  far, 
and  only  as  far,  as  the  partnership  extends ;  and  there  is  no  dis- 
tinct dividing  line  between  general  partnerships  and  those  which 
have  been  called  special.  And  the  designation,  by  statute,  of  the 
partner  in  a  limited  partnership,  who  is  liable  only  to  the  extent 
of  the  capital  he  supplies,  as  "  special  partner,"  is  an  additional 
reason  for  the  disuse  of  the  phrase  "  special  partnership,"  in  the 
sense  above  stated. 

Joint-stock  companies  will  be  treated  by  themselves.  They  are 
much  used  in  England,  and  are  there  regulated  by  statute.  Here 
they  were  quite  common  formerly.  But  incorporation  may  here 
be  obtained  with  great  facility  for  any  legitimate  purpose ;  and 
wise  and  practical  laws,  in  many  of  our  States,  give  to  corpor- 
ations all  the  freedom  and  all  the  facilities  they  can  desire,  and 
limit  the  responsibility  of  members  as  narrowly  as  a  due  regard 
for  public  safety,  and,  indeed,  the  safety  of  the  membei's,  permits  ; 
and  joint-stock  companies  are  now  comparatively  rare. 

Limited  partnerships,  to  which  we  have  already  alluded,  we  shall 
speak  of  more  fully  in  a  subsequent  chapter,  (w) 

(m)  Gow  on  Part.  6  ;  3  Kent  (8th  ed.),  the  bill  was  payable.     This  verdict  does 

p.  28.     The  only  authority  for  considering  not   appear  to  have  been  disturbed.      So 

such  joint  promise  or  indorsement  as  con-  that,  the  result  of  the  case  being  consid- 

stituting    a    partnership    is    the   case   of  ered,  it  can  hardly  be  said  to  be  authority 

Carvick  v.   Vickerj',  3   Doug.   653,  note,  for  the   position  that  joint   promisors  or 

There  the  action  was  by  the  indorsee  of  a  joint  indorsers  of  a  bill  or  note  are  quoad 

bill  of  exchange  drawn  upon  defendants,  hoc  partners ;     since   the    second    verdict 

the   Maydwells,   by  father  and  son,   and  could  only  have  been  upheld  on  the  ground 

pa j-able  "<o  MS  or  oi<r  orf?er,"  but  indorsed  that   the   defendants   were   not   i)artners. 

only  by  the  son.     The  father  and  son  were  The  case  does  not  seem  to  rest  on  sound 

admitted  not  to  be  partners.     At  the  first  principles,    and   is    unsupported    by   any 

trial  Ld.  Mansfield  nonsuited  the  plaintiff,  other  English  authorities.     In  this  coun- 

because  the  bill  had  not  been  indorsed  by  try,  it  has  been  distinctly  repudiated.     lu 

both   the  parties  to  whose  order   it   was  Willis  v.  Green,  5  Hill,  232,  Nelson,  C.  J., 

payable.      But  a  rule  being  obtained  to  says  :    "  It  was  once  supposed,  in  a   like 

show  why  there  should  not  be  a  new  trial,  case,    that    the    indorsers    were    partners 

the  court  were   unanimously  of    opinion  quoad  the  particular  transaction  ;  but  tliat 

that  the  Maydwells,  by  making  the  bill  doctrine  was   repudiated   when    the   case 

payable  "to  our  order,"  had  made  them-  afterwards  came  on  for  trial  before  Lord 

selves  partners  as  to  this  transaction,  and  Mansfield."     Sayre  v.  Herick,  7  W.  &  S. 

the  rule  was  made  absolute.     Upon  the  383  ;    Hopkins  v.  Smith,  11  Johns.  161  ; 

second  trial,  before  Ld.  Mansfield,  a  verdict  Shepard  v.    Hawley,    1   Cojin.   367.      See 

was  again  found  for  the  defendants  on  the  Mitflin  v.  Smith,  17  S.  &  R.  165. 

same  ground,  that  the  indorsement  should  (n)  ^ee  post,  ch.  17. 
have  been  made  by  both  parties  to  whom 


§  42.]  WHO    ARE   PARTNERS.  39 


CHAPTER   Y. 

WHO    ARE   PARTNERS. 

§  41.  The  Test  of  Partnership.  —  There  is  ordinarily  no  difficulty 
in  establishing  the  existence  of  a  partnership.  The  relation  of 
the  parties  is  usually  fixed  by  a  written  agreement,  known  as 
"  articles  of  co-partnership,"  which  in  almost  every  case  provides 
at  the  outset  for  the  formation  of  a  partnership,  and  declares  the 
parties  to  be  partners.  But  in  some  cases  an  agreement,  either 
oral  or  written,  is  entered  into  by  the  parties  concerned,  which 
does  not  profess  to  create  a  partnersiiip,  yet  it  is  contended  that 
the  effect  of  the  agreement  is  to  create  one.  A  question  of  much 
difficulty  is  then  presented,  namely  ;  whether  the  agreement,  the 
terms  of  which  are  known,  does  in  fact  create  that  sort  of  relation 
between  the  parties  which  the  law  considers  a  partnership. 

§  42.  Former  doctrine  in  England.  Sharing  Profits.  —  Upon 
this  point  the  view  held  l)y  the  English  courts  has  within  a  few 
years  undergone  a  remarkable  change.  Up  to  the  year  1860,  it 
appeared  to  be  the  law  of  England  that  the  mere  fact  of  parti- 
cipation in  the  profits  of  a  business  as  such,  made  one  a  partner 
as  a  matter  of  law.  This  was  combined  with  the  doctrine  that 
though  such  a  partnersiiip  existed  as  to  third  persons,  a  different 
rule  must  be  applied  to  determine  whether  persons  were  partners 
inter  se} 

^  The  general  doctrine  appears  to  have  been  founded  upon  the  language  of  De  Grey, 
C.  J.,  in  Grace  v.  Smith,  2  W.  Bl.  998.  There  Smitli  &  Robinson  dissolved  partnership. 
Hut,  Robinson  continuing  the  business,  Smith  left  behind  in  the  trade  4,000/.,  for 
which  he  was  to  receive  five  per  cent,  interest,  and  an  annuity  of  300/.  a  year.  The 
question  being  whether  Smith  &  Robinson  were  general  partners,  De  Grey,  0.  J.,  said: 
"  Every  man  who  has  a  share  of  the  profits  of  a  trade  ought  also  to  bear  his  share  of 
the  loss.  And  if  any  one  takes  part  of  the  profits,  he  takes  part  of  that  fund  on 
which  the  creditor  of  the  trader  relies  for  his  payment  ...  I  think  the  true  criterion 
is  to  inquire  whether  Smith  agreed  to  share  the  jirofits  of  the  trade  with  Roliiuson,  or 
wlicther  he  only  relied  on  those  profits  as  a  fund  of  payment."  —  In  Waugh  v.  C;)rver, 
2  H.  Bl.  235,  the  distinction  between  [lartners  inter  se  and  partners  as  to  thin!  persons 
was  first  put  forward.  The  (|uestion  was,  whether  the  defendants,  the  two  Carvers  and 
Giesler,  were  liable  as  ]iartners  upon  the  true  construction  of  certain  articles  of  agree- 
ment. The  material  portions  of  their  contract  were  these  :  The  two  Carvers,  merchants 
and  ship  agents,  residing  in  Gosport,  agreed  with  Giesler,  also  a  merchant  and  ship 
agent,  that,  for  their  mutual  benefit,  he  should  establish  himself  at  Cowes,  and  there 


40  THE   LAW    OP   PARTNERSHIP.  [CH.    V. 

This  rule  was  however,  confined  to  the  case  of  participation  in 
the  net  profits  of  a  business ;  one  who  had  a  share  in  the  gross 

carry  on  a  house  in  the  agency  line.  The  two  Carvers  were  to  recommend  ships  to 
Giesler,  and  were  to  receive  a  share  in  his  commissions  on  such  shijis,  and  in  the  dis- 
count of  the  bills  of  the  tradesmen  employed  on  them.  Giesler  was  to  act  by  the 
advice  of  the  Carvers,  to  recommend  ships  to  them,  and  to  receive  a  share  in  their 
commissions  on  them,  and  in  their  discounts  on  tradesmen's  bills,  and  also  certain  pro- 
portions of  warehouse  rent  and  agency.  Eyre,  C.  J.,  said:  "It  is  plain  upon  the 
construction  of  the  agreement,  if  it  be  construed  only  between  the  Carvers  and 
Giesler,  that  they  were  not,  nor  ever  meant  to  be  partners  .  .  .  But  the  question  is, 
whether  they  have  not,  by  parts  of  their  agreement,  constituted  themselves  partners 
in  respect  to  other  persons.  The  case,  therefore,  is  reduced  to  the  single  ])oint, 
whether  the  Carvers  did  not  entitle  themselves,  and  did  not  mean  to  take  a  moiety  of 
the  profits  of  Giesler's  house,  generally  and  indefinitely  as  they  should  arise,  at  certain 
times  agreed  upon  for  tiie  settlement  of  their  accounts.  That  tliey  have  so  done  is 
clear  upon  the  face  of  the  agreement;  and  ujion  the  authority  of  Grace  v.  Smith,  he 
who  takes  a  moiety  of  all  the  profits  indefinitely  shall,  by  operation  of  law,  be  made 
liable  to  losses,  if  losses  arise,  upon  the  principle  that,  by  taking  a  part  of  the  profits, 
lie  takes  from  the  creditors  a  part  of  that  fund  vvhicli  is  the  proper  security  to  them  for 
the  payment  of  their  debts."  Waugh  v.  Carver  was  followed  by  later  cases  :  Hesketh 
V.  Bianchard,  4  East,  144  (scmblc)  ;  Cheap  v.  Cramond,  4  B.  &  Aid.  663  ;  Barry  v. 
Nesham,  3  C.  B.  641  ;  Heyhoe  v.  Burge,  9  C.  B.  431. 

The  distinction  between  profits  as  such  and  a  sum  equal  to  profits  appears  to  have 
been  introduced  by  Lord  Eldon,  who  however  professed  to  follow  authority.  In  Ex 
parte  Hamper,  17  Ves.  404,  the  facts  were  that  Thomas  &  Rogers  had  been  partners  in 
a  mercantile  adventure  to  Cadiz,  Rogers  furnishing  goods,  and  Tliomas  going  out  with 
and  selling  them.  Before  the  goods  were  all  sold,  Rogers  entered  into  a  new  arrange- 
ment with  Thomas,  as  follows  :  "I  do  agree  to  give  Thomas  one-half  the  profits  he 
makes  on  my  goods  instead  of  a  commission,  after  shipping,  freiglit,  and  every  expense 
paid  ;  I  pay  Thomas  his  passage  out."  This  agreement  was  acted  upon  by  the  parties, 
and  letters  were  in  evidence  from  Thomas  to  Rogers,  in  which  Thomas  styled  himself 
a  ])artner,  and  other  expressions  indicating  the  existence  of  a  partnership  between 
Rogers  and  himself. 

Lord  Eldon  said  :  "  The  cases  have  gone  to  this  nicety,  upon  a  distinction  so  thin 
that  I  cannot  state  it  as  established  upon  due  consideration,  that,  if  a  trader  agrees  to 
pay  another  person,  for  his  labor  in  the  concern,  a  sum  of  money,  even  in  prf)portion 
to  the  profits,  equal  to  a  certain  share,  that  will  not  make  him  a  ])artner  ;  but  if  he 
has  a  specific  interest  in  the  profits  themselves,  as  profits,  he  is  a  partner."  Afterwards, 
in  the  same  case,  as  if  in  explanation,  and  certainly  in  confirmation,  of  this,  he  says  :  '*  It 
is  clearly  settled,  though  I  regret  it,  that  if  a  man  stipulates  that,  as  the  reward  of  his 
labor,  he  shall  have,  not  a  specific  interest  in  the  business,  but  a  given  sum  of  money, 
even  in  proportion  to  a  given  quantum  of  the  profits,  tliat  will  not  make  him  a  part- 
ner ;  but  if  he  agrees  for  a  part  of  the  profits  as  such,  giving  him  a  right  to  an  account, 
tliough  having  no  ]iroperty  in  the  capital,  he  is,  as  to  third  jiersons,  a  partner."  In 
Ex  pa,rte  Kowlandson,  1  Rose,  91,  he  says,  more  briefly,  but  evidently  intending  to 
express  the  same  rule  •  "  The  ground  is  settled,  that,  if  a  man,  as  a  reward  for  his 
labor,  chooses  to  stipulate  for  an  interest  in  the  profits  of  a  business,  instead  of  a  cer- 
tain sum  proportioned  to  those  profits,  he  is,  as  to  third  persons,  a  partner."  See  to 
the  same  ett'ect  Ex  parte  Langdale,  18  Ves.  300  ;  Ex  parte  Watson,  19  Ves.  459  ;  Ex 
parte  Hodgkinson,  19  Ves.  291  ;  In  re  Colbeck,  Buck,  48. 

This  declaration  has  had  great  influence  upon  the  courts  and  the  profession.  Collyer 
says,  "It  must  be  admitted  that  his  lordship's  dicta  upon  this  subject  have  received 
the  sanction  of  the  most  eminent  practitioners  at  the  bar."  Collyer  on  Partnership 
(Perkins's  ed.)  §  40.     Nor  is  it  difficult  to  account  for  this.     For,  to  say  nothing  of 


§  43.]  WHO    ARE   PARTNERS.  41 

profits  of  a  business,  so  called,  that  is,  the  gross  earnings  of  the 
business,  was  not  held  as  a  partner  even  as  to  third  persons.^ 

§  43.  Cox  V,  Hickman.  —  The  earlier  authorities,  while  not 
directly  overruled,  were  rendered  obsolete  by  the  decision  of  the 
House  of  Lords  in  the  case  of  Cox  v.  Hickman.^  In  that  case 
the  creditors  of  an  insolvent  manufacturer  agreed  to  carry  on 
the  ])usincss  of  the  debtor,  and  to  apply  the  net  profits  to  the 
l^ayment  of  the  deljts.  This  agreement  was  held  by  the  House  of 
Lords  not  to  constitute  the  creditors  partners  even  as  to  third' 
persons.  Lord  Cranworth  said :  "  It  is  often  said  that  the  test, 
or  one  of  the  tests,  whether  a  person  not  ostensibly  a  partner  is 
nevertheless,  in  contemplation  of  law,  a  partner,  is,  whether  he  is 
entitled  to  participate  in  the  profits.  This,  no  doubt,  is,  in  gen- 
eral, a  sufficiently  accurate  test ;  for  a  right  to  participate  in 
profits  affords  cogent,  often  conclusive,  evidence  that  the  trade  in 
which  the  profits  have  been  made  was  carried  on  in  part  for  or  on 
behalf  of  the  person  setting  up  such  a  claim.  But  the  real  ground 
of  the  liability  is  that  the  trade  has  been  carried  on  by  persons 
acting  on  his  behalf."  Lord  Wensleydale  said :  "  The  law  as  to 
partnership  is  undoubtedly  a  branch  of  the  law  of  principal  and 
agent." 

This  case,  decided  in  the  highest  court  of  England,  was  at  once 
the  end  of  the  old  theory  of  partnership,  and  the  starting-point  of 
a  new  doctrine.  It  put  an  end  to  two  notions  which  had  been 
regarded  as  fundamental  ;  first,  that  third  persons  may  hold  to 
the  liability  of  partners  those  who  in  fact  are  not  partners,  merely 
because  some  other  relation  exists  between  them ;  second,  that 
participation  in  the  profits  of  a  business  is  conclusive  of  a  part- 
nership. The  case  did  not  however  offer  any  alternative  test  of 
a  partnership  ;  for  the  suggestion  of  the  necessity  of  an  agency  is 
of  no  assistance  in  a  doubtful  case.  The  agency  is  the  result  of 
the  partnership,  not  vice  versa.^ 

It  was  at  first  doubtful  whether  the  case  of  Cox  v.  Hickman 
■was  an  illustration  of  a  general  principle,  or  was  decided  simply 

the  immense  authority  of  so  eminent  a  judge,  his  words  so  understood  supply  a  clear, 
simple,  and  easily  applicable  rule  for  the  avoidance  of  a  great  danger.  They  tell  the 
lawyer  who  would  draw  a  contract  of  this  kind,  how,  by  a  mere  formula,  he  can  guard 
his  clients  from  a  great  uncertainty  ;  the  inconvenience  of  which  might  otherwise 
suffice  to  prevent  the  proposed  arrangement.  As  a  convenient  rule,  much  may  be  said 
of  it ;  but,  as  an  accurate  one,  it  must  be  spoken  of  \qvy  ditferenth'. 

1  Dry  V.  Boswell,  1  Camp.  329.  See  Cheap  v.  Cramond,  4  B.  &  Aid.  663  ;  Pott  v. 
Eyton,  3  C.  B.  32  ;  Lyon  v.  Knowles,  3  B.  &  S.  556. 

2  8  H.  L.  C.  268  (i860). 

3  Cleasby,  B.,  in  Holme  v.  Hammond,  L.  K.  7  Ex.  218,  233. 


42  THE   LAW    OF   PARTNERSHIP.  [CH.    V. 

on  the  facts,  and  of  no  general  application.  It  was  finally  deter- 
mined that  the  former  is  true.^ 

§  44.  Sharing  Profit  and  Loss.  —  The  conclusiveness  of  a  sharing 
of  profits  as  a  test  of  partnership  has  therefore  been  definitively 
denied.  In  its  place,  however,  the  theory  was  put  forward  by 
high  authority  that  a  sharing  of  profit  and  loss  was  necessarily 
conclusive  of  a  partnership.^  But  this  theory  is  not  now  law  in  Eng- 
land. It  has  been  finally  held  that  although  profit  and  loss  are 
shared  the  parties  are  not  partners  if  their  intention  was  not  to 
form  a  partnership  relation.^ 

§45.  Boviii's  Act. — Meanwhile  the  legislature  had  attempted 
to  remove  the  ditiiculties  of  this  branch  of  the  law  of  partnership 
by  statute,  by  the  passage  of  "  Boviii's  Act,"  28  and  29  Vict.  ch. 
86.*     It  would  seem,  however,  that  nothing  was  gained  by  the  act: 

1  Bullen  V.  Sharp,  L.  R.  1  C.  P.  86  (Exch.  Cliamb.)  ;  Moll  wo  v.  Court  of  Wards, 
L.  R.  4  P.  C.  419.  In  the  former  case  Bramwell,  B.,  said,  as  to  the  distinction  some- 
times made  between  partnership  inter  se  and  as  to  third  persons  :  "The  burden  of 
proof  ...  is  on  the  plaintiffs.  Now,  what  reason  do  they  give  ?  They  say  that  the 
defendant  is  a  partner  with  his  son  ;  and  that,  if  not  partners  inter  se,  they  are  so  as 
regards  third  parties.  A  most  remarkable  exj)ression  !  Partnerslup  means  a  relation 
between  two  parties.  How,  then,  can  it  be  correct  to  say  that  A  and  Baie  not  in  jiart- 
nership  a.s  between  themselves  ;  they  have  not  held  themselves  out  as  being  so,  and  yet 
a  tliird  person  has  a  right  to  say  they  are  so  as  relates  to  him  ?  But  that  must  mean 
i7iter  se ;  for  partnership  is  a  relation  inter  se,  and  the  word  cannot  be  used  except  to 
signify  that  relation.  A  is  not  the  agent  of  B  ;  B  has  never  held  him  out  as  such  ; 
yet  C  is  entitled,  as  between  himself  and  B,  to  say  that  A  is  the  agent  of  B.  Why  is 
he  so  entitled,  if  the  fact  is  not  so,  and  B  has  not  so  represented  ? " 

2  Lindley  Part.  *  10  ;  Pawsey  v.  Armstrong,  18  Ch.  D.  698. 

8  Walker  v.  Hirsch,  27  Ch.  D.  460  (C.  A.)  ;  Badeley  v.  Consolidated  Bank,  38  Ch. 
D.  238  (C.  A.). 

*  By  this  Act,  after  reciting  that  it  is  expedient  to  amend  the  law  relating  to  part- 
nership, it  is  therefore  enacted  as  follows  :  1.  The  advance  of  money  by  way  of  loan  to 
a  person  engaged  or  about  to  engage  in  any  trade  or  undertaking,  upon  a  contract  in 
writing  with  such  person,  that  the  lender  shall  receive  a  rate  of  interest  varying  with 
the  profits,  or  shall  receive  a  share  of  the  profits  arising  from  carrying  on  such  trade  or 
undertaking,  shall  not,  of  itself,  constitute  the  lender  a  partner  with  the  person  or  the 
persons  carrying  on  such  trade  or  undertaking,  or  render  him  responsible  as  such. 
2.  No  contract  for  the  remuneration  of  a  servant  or  agent  of  any  person  engaged  in  any 
trade  or  undertaking,  by  a  share  of  the  profits  of  such  trade  or  undertaking,  shall,  of 
itself,  render  such  servant  or  agent  responsible  as  a  partner  therein,  nor  give  him  the 
rights  of  a  partner.  3.  No  person,  being  the  widow  or  child  of  the  deceased  partner 
of  a  trader,  and  receiving  by  way  of  annuity  a  portion  of  the  profits  made  by  such 
trader  in  his  business,  shall,  by  reason  only  of  such  receipt,  be  deemed  to  be  a  jiiirtner 
of  or  to  be  subject  to  any  liabilities  incurred  by  such  trader.  4.  No  person  receiving, 
by  way  of  annuity  or  otherwise,  a  portion  of  the  profits  of  any  business,  in  consideration 
of  the  sale  by  him  of  the  good-will  of  such  business,  shall,  by  reason  only  of  such 
receipt,  be  deemed  to  be  a  partnei'  of  or  be  subject  to  the  liabilities  of  the  i)erson  carry- 
ing on  such  business.  5.  In  the  event  of  any  such  trader  as  aforesaid  being  adjudged 
a  bankrupt,  or  taking  the  benefit  of  any  act  for  the  relief  of  insolvent  debtors,  or  entering 
into  an  arrangement  to  pay  his  creditors  less  than  20s.  in  the  pound,  or  dying  in  insol- 


§  46,]  WHO    ARE    PARTNERS.  43 

for  the  common  law  has  since  that  time  been  declared  to  be  in 
accordance  with  the  provisions  of  the  act,  and  courts  of  the  high- 
est authority  have  said  that  it  added  nothing  to  the  law.^ 

§  46.  Present  English  Doctrine.  —  The  result  of  the  English 
cases  seems  to  be  the  abandonment  of  any  artificial  test  of  part- 
nership, and  the  adoption  of  what  must  be  regarded  as  the  true 
principle  :  that  parties  become  partners  only  by  agreeing  to  enter 
into  an  association  wliich  the  law  regards  as  a  partnership.^  Tlie 
agreement,  cither  express  or  implied,  to  form  such  an  association, 
is  the  only  method  by  which  one  can  become  a  true  partner. 
Whether  such  an  association  is  intended  to  be  formed  is  a  question 
of  fact  in  each  case ;  and  in  deciding  this  question  one  obtains 
much  assistance  from  the  opinion  of  Jessel,  M.  R.,  in  Pooley  v. 
Driver :  ^  "  Partnership  is  a  sort  of  agency,  but  a  very  peculiar 
one.  You  cannot  grasp  the  notion  of  agency,  properly  speaking, 
unless  you  grasp  the  notion  of  the  existence  of  the  firm  as 
a  separate  entity  from  the  existence  of  the  partners ;  a  notion 
which  was  well  grasped  by  the  old  Roman  lawyers,  and  which 
was  partly  understood  in  the  courts  of  equity  before  it  was  part 
of  the  whole  law  of  the  land,  as  it  is  now.  But  when  you  get  that 
idea  clearly,  you  will  see  at  once  what  sort  of  agency  it  is.  It  is 
the  one  person  acting  on  behalf  of  the  firm.  He  does  not  act  as 
agent,  in  the  ordinary  sense  of  the  word,  for  the  others  so  as  to 
bind  the  others;  he  acts  on  behalf  of  the  firm  of  which  they  are 
members  ;  and  as  he  binds  the  firm  and  acts  on  tiie  part  of  the 
firm,  he  is  properly  treated  as  the  agent  of  the  firm.  If  you  cannot 
grasp  the  notion  of  a  separate  entity  for  the  firm,  then  you  are 
reduced  to  this,  that  inasmuch  as  he  acts  partly  for  himself  and 
partly  for  the  others,  to  the  extent  that  he  acts  for  the  others  he 
must  be  an  agent,  and  in  that  way  you  get  him  to  be  an  agent  for 
the  other  partners,  but  only  in  that  way,  because  you  insist  upon 
ignoring  the  existence  of  the  firm  as  a  separate  entity." 

The  formation  of  a  partnership,  then,  is  the  creation  of  a  body, 


vent  circumstances,  —  the  lender  of  any  such  loan  as  aforesaid  shall  not  be  entitled  to 
recover  anj'  portion  of  his  principal,  or  of  the  profits  or  interest  payable  in  respect  of 
such  loan,  nor  shall  any  such  vendor  of  a  good-will  as  aforesaid  be  entitled  to  recover 
any  such  profits  as  aforesaid  until  the  claims  of  the  other  creditors  of  the  said  trader 
for  valuable  consideration  in  money  or  money's  worth  have  been  satisfied.  6.  In  the 
construction  of  this  Act  the  word  "person"  shall  include  a  partnership  firm,  a  joint- 
stock  company,  and  a  corporation. 

1  Sir  Montague  Smith  in  Mollwo  v.  Court  of  Wards,  L.  R.  4  P.  C.  419  ;  Jessel 
M.  R.,  in  Pooley  v.  Driver,  5  Ch.  D.  458. 

2  Badeley  v.  Consolidated  Bank,  38  Ch.  D.  238, 

3  5  Ch.  D.  458,  476. 


44  THE   LAW   OF   PARTNERSHIP.  [CH.    V. 

existent  apart  from  the  partners,  for  business  purposes  ;  for  which 
the  partners  are  to  act,  and  not  directly  for  each  other. 

§  47.  American  Doctrine  not  Uniform.  —  The  rules  adopted  upon  , 
this  subject  by  the  American  courts  are,  as  we  mig-ht  expect,  not 
harmonious.  In  the  older  States  the  rule  laid  down  in  Waugli  v. 
Carver  was  followed  before  a  more  reasonable  rule  was  made 
possible  by  the  decision  of  Cox  v.  Hickman.  The  courts  of  some 
of  these  States  felt  themselves  constrained  by  authority  not  to 
follow  the  later  I^nglish  decision,  even  though  the  rules  laid  down 
in  it  were  more  consonant  with  true  principle.  In  other  States, 
however,  the  true  principles  were  recognized  even  before  they 
were  formulated  in  England.  All  that  is  now  possible,  therefore, 
is  to  examine  in  detail  the  rules  laid  down  in  the  different  juris- 
dictions in  this  country  ;  bearing  in  mind,  throughout  this  ex- 
amination, the  fact  that  the  rules  finally  adopted  by  the  English 
courts  are  the  only  ones  consistent  with  principle. 

§  48.  Partnership  inter  se  and  as  to  Third  Persons.  —  It  is  said 
in  a  number  of  recent  cases  that  there  may  be  a  partnership  as  to 
third  jjcrsons,  though  the  parties  are  not  partners  ifiter  se.^  It 
has  however  been  held,  in  several  important  and  well-reasoned 
cases,  that  there  can  be  no  partnership  except  one  founded  upon 
the  intention  of  the  parties.^  Indeed,  it  seems  to  be  the  view  of 
a  respectable  author  that  the  distinction  between  partnership  niter 
se  and  partnership  as  to  third  parties  has  been  abandoned  in  this 
country  ;  ^  but  unfortunately  it  appears,  from  the  authorities 
already  cited,  that  the  indefensible  distinction  still  exists  in 
many  if  not  in  most  jurisdictions.  No  stronger  argument  need 
be  made  against  it  than  that  of  Bramwell,  B.,  previously  quoted.* 

§  49.  Sharing  Profits  as  such.  —  The  rule  generally  followed  in 
the  earlier  American  cases  was  that  suggested  in  some  of  the 
English  cases :  that  where  the  party  in  question  received  from  a 
business  a  sum  equal  to  a  certain  proportion  of  the  profits  he  was 
not  a  partner  ;  but  if  he  received  a  proportional  part  of  the  profits 
themselves,  he  was  a  partner.  In  a  less  crude  form,  the  rule 
came  to  be  stated  thus :  that  when  the  party  has  a  proprietary 

1  Powell  V.  Moore,  79  Ga.  .524,  4  S.  E.  383  ;  Howe  v.  Dupoyster  (Ky.),  7  S.  W. 
627  ;  Waring  i--.  Nat.  Marine  Bank,  74  Md.  278,  22  Atl.  140  ;  Pratt  v.  Langdon,  97 
Mass.  97  ;  Hackett  v.  Stanley,  115  N.  Y.  625,  22  N.  E.  745  ;  Caldwell  v.  Miller,  127 
Pa.  442,  17  Atl.  983  ;  Miller  v.  Marx,  65  Tex.  131. 

2  Haycock  v.  Williams,  54  Ark.  384,  16  S.  W.  3  (semhh)  ;  Eastman  v.  Clark,  53 
N.  H.  276  ;  Harvey  v.  Childs,  28  Oh.  St.  319  ;  Boston  &  Col.  Smelting  Co.  v.  Smith, 
13  R.  I.  27. 

3  1  Bates  Part.  §  15. 
*  Ante,  %  43. 


§50.] 


WHO    ARE    PARTNERS.  45 


interest  in  the  profits  qua  profits  before  division  he  is  a  partner, 
otlierwise  not.^ 

§  50,  Distinction  between  Gross  and  Net  Profits.  —  The  distinc- 
tion between  gross  ])rofits  and  net  pi'ofits  has  been  pointed  out 
by  some  American  cases,^  following  the  English  case  of  Dry  v. 
Boswell,^  already  examined. 

^  "The  rule  is  ea.sily  Liiil  down  ;  the  difficulty  is  in  its  application.  Where  a  part 
of  the  profits  themselves  is  the  property  of  the  party  lie  is  then  a  partner.  Where  their 
amount  merely  ascertains  the  amount  of  a  debt  or  duty,  but  they  themselves  do  not 
belong  to  the  party,  there  it  is  not  a  partnership."  Henderson,  C.  J.,  in  Cox  v.  Delano, 
3  Dev.  89.  The  leading  and  well-considered  cases  of  Loomis  v.  Marshall,  12  Conn.  69, 
and  Denny  i-.  Cabot,  6  Met.  82,  are  to  tlie  same  effect.  This  rule  seems  to  have  been 
uniformly  followed  in  Massachusetts.  Reynolds  v.  Toppan,  15  Mass.  370  ;  Kice  v. 
Austin,  17  Mass.  197;  Turner  v.  Bissell,  14  I'ick.  192;  Blanchard  v.  Coolidge,  22 
Pick.  151  ;  Bradley  v.  White,  10  Met.  303  ;  Judson  v.  Adams,  8  Cu.sh.  556  ;  Pratt  v. 
Langdon,  12  All.  544,  97  Mass.  97.  The  same  distinction  seems  to  be  recognized  in 
all  the  earlier  and  a  few  later  Ameiican  authorities.  Shropshire  v,  Shejjperd,  3  Ala. 
733  ;  Hodges  v.  Dawes,  6  Ala.  215  ;  Scott  v.  Campbell,  30  Ala.  728  ;  Bucknam  v. 
Barnum,  15  Conn.  67  ;  Reed  v.  Murphy,  2  Greene  (la.)  574;  Clement  v.  Hadlock,  13 
N.  H.  185  ;  Fitch  v.  Hall,  25  Barb.  13  ;  Brockway  v.  Burnap,  16  Barb.  310  ;  Stroher 
V.  Elting,  97  N.  Y.  102  ;  Johnson  v.  Miller,  16  Ohio,  431  ;  Heckert  v.  Fegely,  6  W. 
&  S.  139 ;  Dunham  v.  Rogers,  1  Barr,  255  ;  Bartlett  v.  Jones,  2  Strobh.  471  ;  Tobias 
V.  Blin,  21  Vt.  544  ;  Bowyer  v.  Anderson,  2  Leigh,  550  ;  Brown  v.  Higginbotham, 
5  Leigh,  583. 

2  Moore  v.  Smith,  19  Ala.  774  ;  Turner  v.  Bissell,  14  Pick.  192  ;  Beecham  v.  Dodd, 
3  Harr.  Del.  485  ;  Heimstreet  v.  Howland,  5  Den.  68  ;  Everett  v.  Coe,  5  Den.  180; 
Pattison  v.  Bhmchard,  5  N.  Y.  186  ;  Gibson  v.  Stone,  43  Barb.  285  ;  Ambler  v.  Brad- 
ley, 6  Vt.  119;  Bowman  v.  Bailey,  10  Vt.  170;  Mason  v.  Potter,  26  Vt.  722.  In 
Loomis  V.  JLarsliall,  12  Conn.  67,  the  parties  sought  to  be  charged  as  partners  were  to 
divide  between  them  the  proceeds  of  the  sales  of  the  gooils,  diminished  only  by  the  cost 
of  selling.  The  difference  between  net  profits  and  net  sales  was  pressed  upon  the  court. 
But  it  was  not  thought  necessary  to  express  any  opinion  upon  the  point.  In  Denny  v. 
Cabot,  6  Met.  82,  the  fund  to  be  divided  was  substantially  the  same  :  "For  (to  quote 
the  language  of  the  court)  although,  in  terms,  the  agreement  was  to  pay  Cooper  one 
third  of  the  net  earnings,  yet  that  is  explained  by  the  words  immediately  following,  by 
which  it  appears  that  Cooper  was  entitled  to  one  third  of  the  gross  profits  after  deduct- 
ing certain  specified  charges  ;  and  that  in  no  event  was  he  to  be  liable  for  any  losses." 
The  court  then  cite  Loomis  v.  Marshall,  supra;  Reynolds  v.  Topham,  15  Mass.  370; 
Vanderburgh  v.  Hull,  20  Wend.  70  ;  Turner  v.  Bissell,  14  Pick.  192  ;  and  proceed 
thus  :  "  These  cases  appear  to  us  fully  to  support  the  defence  in  the  present  case. 
Some  of  them  may  perhaps  appear  to  clash  with  the  distinction  Haid  down  by  Lord 
Ellenborough  in  Dry  v,  Boswell,  1  Camp.  329,  and  recognized  in  other  cases)  between 
sharing  the  gross  earnings  and  sharing  the  net  earnings  of  a  business  or  adventure. 
But,  however  this  may  be,  we  think  there  is  no  sound  distinction  between  an  agree- 
ment to  pay  to  a  party  a  certain  share  of  the  gross  profits  and  an  agreement  to  pay  a 
certain  share  of  the  net  profits,  as  explained  in  the  present  contract ;  the  clear  meaning 
of  the  terms  of  which  is,  that  Cabot,  Appleton  &  Co.  were  to  pay  Cooper  one  third  part 
of  the  profits,  after  making  certain  specified  deductions  therefrom,  and  Cooper  clearly 
was  not  to  be  liable  for  any  losses.  If  he  had  stipulated  for  a  share  in  the  profits 
{whetlicr  gross  or  net  profits),  so  as  to  entitle  him  to  an  account,  and  to  give  him  a 
specific  lien,  or  a  preference  in  payment  over  other  creditors,  and  giving  him  the  full 
benefit  of  the  profits  of  the  business,  without  any  corresponding  risk  in  case  of  loss,  — 

3  1  Camp.  329. 


46  THE   LAW   OF   PARTNERSHIP.  [CH.    V. 

§  51.  Sharing  Profits  generally.  —  It  is  still  often  laid  down  by 
the  courts  that  one  who  shares  the  profit  of  a  business  is  partner, 
no  matter  what  was  the  intention  of  the  parties  ;  following  Waugh 
V.  Carver  to  the  fullest  extent.^  Other  cases  however  hold  that 
in  this  case  the  relationship  of  the  parties  may  be  shown  to  be 
other  than  that  of  partners.^  And  it  may  perhaps  safely  be  said 
that  every  jurisdiction  will  eventually  recognize  the  correctness  of 
this  rule. 

§  52.  Sharing  Profit  and  Loss.  —  Even  where  the  parties  share 
both  i)rofit  and  loss,  they  are  not  partners  if  they  have  not  in  fact 
created  a  partnership,  but  stand  in  some  other  relation  to  each 
other.3 

§  53.  Right  to  account  as  a  Test.  —  An  attempt  has  been  made 
in  this  country  to  set  up  another  test  of  partnership.  It  has  been 
asserted,  not  only  by  text-writers,  but  by  eminent  judges,  that  a 
person  is  liable  as  a  partner,  to  third  parties,  when  he  has  such 
an  interest  in  profits  as  will  give  him  a  right  to  an  account,  (a) 
Undoubtedly,   every  partner  has  a  right  to  an    account   of   the 

(a)  3  Kent  Com.  p.  25,  note  (b)  ;  Gary  in  Champion  i;.  Bostwick,  18  Wend.  184. 

on  Part.  11,  note  (i)  ;  Collyer  on  Part.  §  44,  See  also  Heimstreet  v.  Rowland,  5  Denio, 

and  note ;    Lord  Eldon  in  Ex  parte  Ham-  68  ;  Denny  i;.  Cabot,  6  Met.  92. 
per,    17   V'es.  412  ;    Chancellor  Walworth 

justice  to  the  other  creditors  would  seem  to  require  that  he  should  be  holden  to  be 
liable  to  third  persons  as  a  partner." 

1  Buckner  v.  Lee,  8  Ga.  285  ;  Perry  t).  Butt,  14  Ga.  699;  Howe  v.  Dupoyster  (Ky.) 
7  S.  W.  627  ;  Taylor  v.  Ternie,  3  H.  &  J.  505  ;  Pratt  v.  Langdon,  12  All.  544,  97  Mass. 
97  ;  Champion  v.  Bostwick,  18  Wend.  184 ;  Cushnian  v.  Bailey,  1  Hill,  526  ;  Everett 
V.  Coe,  5  Den.  180 ;  Manhattan  Brass  Co.  v.  Sears,  45  N.  Y.  797  ;  Cox  v.  Delano, 
3  Dev.  89  ;  Holt  v.  Keruodle,  1  Ire.  199  ;  Mauney  v.  Coit,  86  N.  C.  463  ;  Purviance 
V.  McClintee,  6  S.  &  R.  259  ;  Caldwell  v.  Miller,  127  Pa.  442,  17  Atl.  983;  Pierson  v. 
Steinmyer,  4  Rich.  309  ;  Cothran  v.  Marmaduke,  60  Tex.  370  ;  Stevens  v.  Gainesville 
Nat.  Bank,  62  Tex.  499. 

2  Meehan  i;.  Valentine,  145  U.  S.  611  ;  Le  Fevre  v.  Castagnio,  5  Col.  564  ;  Burton 
V.  Goodspeed,  69  111.  237;  Smith  v.  Knight,  71  111.  148;  Williams  v.  Soutter,  7  la. 
435;  Shepard  v.  Pratt,  16  Kas.  209;  Beeclier  t;.  Bush,  45  Mich.  188,  7  N.  W.  785; 
Cohvell  V.  Britton,  59  Mich.  350,  26  N.  W.  538  ;  Corey  v.  Cadwell,  86  Mich.  570,  49  N. 
"W.  611  ;  Philips  v.  Samuel,  76  Mo.  657  ;  Priest  v.  Chouteau,  85  Mo.  398  ;  Parchen  v. 
Anderson,  5  Mont.  438,  5  Pac.  588  ;  Gibson  v.  Smith,  31  Neb.  354,  47  N.  W,  1052  ; 
Horton  v.  New  Pass  Gold  &  Silver  Mining  Co.,  27  Pac.  376  (Nev.)  ;  Eastman  v.  Clark, 
53  N.  H.  276  ;  Wild  v.  Davenport,  48  N.  J.  L.  129,  7  Atl.  295  ;  Harvey  v.  Chiids,  28 
Oh.  St.  319  ;  Cogswell  i;.  Wilson,  11  Ore.  371,  4  Pac.  1130;  Boston  &  Col.  Smelting 
Co.  V.  Smith,  13  R.  I.  27  ;  Polk  v.  Buchanan,  5  Sneed,  721  ;  Robinson  v.  Allen,  85  Va. 
721,  8  S.  E.  835  {semb/c). 

3  Tayloe  v.  Bush,  75  Ala.  432  ;  Stevens  v.  Faucet,  24  111.  483  ;  ChaflTraix  v.  Lafitte, 
30  La.  Ann.  631  (but  see  New  Orleans  v.  Gauthreaux,  32  La.  Ann.  1126)  ;  Dwinel  v. 
Stone,  30  Me.  384  ;  McDonald  v.  Matney,  82  Mo.  358  ;  Kellogg  Newspaper  Co.  t'. 
Farrell,  88  Mo.  594;  Clifton  v.  Howard,  89  Mo.  192,  1  S.  W.  26  ;  Chapline  v.  Conant, 
3  W.  Va.  507.     See  the  English  authorities,  ante,  §  44. 


5  54.1  WHO    ARE   PARTNERS.  47 

profits  ;  but  the  converse  is  not  true,  that  every  one  who  has  such 
a  right  is  a  partner.  There  are  many  relations  which  a  man 
may  bear  to  another,  and  in  tliat  right  be  entitled  to  an  account 
without  being  liable  as  a  partner.  And  it  has  been  well  said  by 
an  American  writer,  "  In  all  cases  where  a  person  is  to  be  paid 
for  his  services  by  a  sum  proportional  to  the  profits,  he  must  be 
entitled  to  an  account  of  profits.  If  not,  how  is  he  to  ascertain 
that  he  has  what  he  has  stipulated  for  ? "  (by 

§  54.  Intention  the  true  Test.  —  The  true  test  of  partnership, 
then,  is  the  intention  of  the  parties.  They  have  agreed  together 
for  a  certain  purpose.  If  the  purpose  was  the  formation  of  an 
associated  body,  different  from  the  individual  parties,  for  which 
they  were  thereafter  to  act,  they  have  formed  a  partnership.  If 
however  the  purpose  was  the  entrance  into  a  relationship  in  which 
one  of  the  parties,  at  least,  was  to  act  as  an  individual  solely  for 
himself,  without  becoming  a  member  of  an  associated  body,  there 
is  no  partnership  formed  and  the  parties  are  therefore  not  part- 
ners. The  intention  to  form  a  partnership  may  be  expressed  in 
the  contract,  or  it  may  be  gathered  from  the  acts  and  from  all  the 
circumstances  which  are  available  for  the  interpretation  or  con- 
struction of  the  contract.^  This  does  not  mean  that  parties 
having  formed  their  relationship  are  permitted  to  call  it  a  part- 
nership or  otherwise  at  will ;  but  that  whether  the  parties  formed 
the  associated  body  which  the  law  regards  as  a  partnership  depends 
upon  whether  they  intended  to  form  such  a  body.  If  they  did  so 
intend  they  are  partners,  though  they  were .  ignorant  of  the  legal 

(b)  Bissett  on  Partnership,  p.  14. 

*  The  right  to  go  into  equity  for  an  account  is  not  confined  to  a  partner.  Any 
employee  paid  by  a  share  of  the  profits  may  maintain  a  bill  for  an  account,  though  he 
is  not  a  partner,  since  a  court  of  law  is  unable  to  take  such  an  account.  Harrington 
V.  Churchward,  29  L.  J.  N.  s.  Ch.  .'521  ;  Katsch  v.  Schenok,  13  Jur.  668  ;  Ferry  v. 
Henry,  4  Pick.  75  ;  Hallett  v.  Cuniston,  110  Mass.  32 ;  Bentley  v.  Harris,  10  R.  I. 
434  (distinguishing  Hazard  v.  Hazard,  1  Story,  371). 

2  Badeley  v.  Consolidated  Bank,  38  Ch.  Div.  238  ;  Couch  v.  Woodruff,  63  Ala.  466 
(sanble)  ;  Mayrant  v.  Marston,  67  Ala.  453  ;  Tayloe  v.  Bush,  75  Ala.  432  ;  Loomis  v. 
Marshall,  12  Conn.  69 ;  Chaffraix  v.  Lafitte,  30  La.  Ann.  631  ;  Sangston  v.  Hack,  52 
Md.  173  ;    Waring  v.  Nat.  Marine  Bank,  74  Md.  278,  22  Atl.  140  ;    Denny  v.  Cabot, 

6  Met.  82  ;  Beecher  v.  Bush,  45  Mich.  188,  7  N.  W.  785  ;  Corey  v.  Cadwefl,  86  Mirh. 
570,  49  N.  W.  611  ;  Priest  v.  Chouteau,  85  Mo.  398  ;  Kellogg  Newspaper  Co.  v.  Far- 
rell,  88  Mo.  594;  Vibbard  v.  Roderick,  51  Barb.  616;  Setzer  v.  Beale,  19  W.  Va. 
274.  Hence,  if  persons  who  unite  in  a  joint  undertaking  expressly  declare  that  they 
do  not  mean  to  become  partners,  the  law  will  not  hold  them  partners  as  to  each  other, 
unless  the  actual  relations  into  whieh  they  enter  neutralize  and  negative  their  declara- 
tions. Gilpin  V.  Enderbey,  5  B.  &  Aid.  954  ;  Kerr  v.  Potter,  6  Gill,  404  ;  Freeman  v. 
Bloomfield,  43  Mo.  391  ;  Gill  v.  Kuhn,  6  S.  &  R.  333. 


48 


THE   LAW    OP   PARTNERSHIP. 


[CH.    V. 


nature  of  their  relation,  and  even  though  they  may  have  expressly 
provided  in  the  articles  that  they  should  not  become  partners.^ 

And  conversely,  thou,<2;h  they  have  declared  themselves  to  be 
partners,  if  the  relationship  established  was  not  one  of  partner- 
ship the  parties  will  not  be  regarded  by  the  law  as  partners.^ 

§  55.  Partnership  inferred  from  Control  of  Business. — It  is  quite 
certain  that  no  mere  interfei'encc  with  the  affairs  of  the  partner- 
ship, no  advice  in  respect  to  them,  not  even  a  control  of  them,  not 
even  the  right  or  the  duty  of  interference,  advice,  or  control,  as 
part  of  an  express  contract,  can  ahme  make  a  party  chargeable  as 
a  partner  ;  (c)  although  they  might  be  very  influential,  in  connec- 
tion with  other  circumstances,  in  determining  the  relation  of  a 
person  to  the  partnership.  Neither  would  the  fact  of  joining  in 
an  order  for  the  purchase  or  sale  of  goods,  (cZ)  or  for  any  mercan- 
tile transaction,  {e)  suffice  to  create  a  partnership  or  its  liabilities 
without  other  circumstances. 


(c)  In  Barklie  v.  Scott,  1  Hudson  & 
B.  83,  the  court  said  :  "As  to  the  stipula- 
tion that  the  house  should  be  governed 
and  directed  by  the  defendant's  advice, 
this  does  not  constitute  him  a  partner,  nor 
give  him  any  legal  interest  in  the  firm  ;  it 
does  not  hold  him  out  to  the  world  as  a 
partner,  nor  give  him  any  share  in  the 
profits,  nor  em]io\ver  him  to  dissolve,  alter, 
or  affect  the  partnership.  Suppose  that 
the  defendant  Jiad  not  been  the  party  ad- 
vancing this  money,  but  that  the  gift  had 
been  made  by  a  third  person,  who  had 
been  desirous  that  the  young  man  should 
have  the  advice  of  some  skilful  person 
engaged  in  trade,  and  had  stipulated  that 
the  house  should  be  directed  by  that  ad- 
vice, —  could  such  a  person  be  considered 
as  a  partner  ? "  See  Bryden  v.  Taylor,  2 
H.  &  G.  400  ;  Taylor  v.  Perkins,  26  Wend. 
124  ;  Smith  v.  Edwards,  2  H.  &  G.  411. 

(d)  Gibson  v.  Lupton,  9  Bing.  297. 
The  defendants,  who  were  never  general 
partners,  ordered  wheat  of  the  plaintiffs, 
by  an  order  containing  the  following 
words:  "Payment  for  the  same  to  be 
drawn  upon  each  of  us,  in  the  usual  man- 
ner." The  i)laintiffs,  in  a  letter  addressed 
to  each  of  the  defendants,  answered : 
"We  have  made  a  purchase  for  your  joint 
account."  At  the  same  time,  they  drew 
upon  the  defendants  for  one-third  of  the 


price,  upon  each  by  a  separate  bill  for  one 
moiety  of  the  third.  They  afterwards 
despatched  the  wheat,  and  drew  other 
similar  bills,  in  the  same  manner,  for  the 
remainder  of  the  price  ;  having,  however, 
previously  written  them  :  "  We  hold  you 
both  harn)less  for  the  advance  up  to  the 
period  of  lading  and  invoice."  The  bill 
of  lading,  on  its  reaching  tlie  defendants, 
was  indorsed  by  each  of  them  ;  the  freight 
and  charges  were  paid  by  the  money  of 
each  ;  and  the  wheat  was  equally  divided 
between  them  when  it  was  warehoused. 
Upon  these  facts,  it  was  held,  that  the 
defendants  were  not  jointly  liable  as  part- 
ners for  the  whole  price  of  the  goods. 
See  also  Jackson  v.  Robinson,  3  Mason, 
138  ;  Harding  v.  Foxcroft,  6  Me.  76. 

(e)  Thus  the  fact  that  two  persons  sign 
a  note  jointly  is  no  evidence  of  copartner- 
ship between  them.  Hopkins  v.  Smith, 
11  Johns.  161.  But  it  has  been  held 
otherwise  where  two  persons  draw  a  bill 
of  exchange.  Carvick  v.  Vickery,  Doug. 
653,  note.  See  also  Given  v.  Albert,  5 
Watts  &  S.  339  ;  M'lver  v.  Humble,  16 
East,  169  ;  Gibbons  v.  Wilcox,  2  Stark. 
43;  Chandler  v.  Brainard,  14  Pick.  285; 
Clark  V.  Keid,  11  Pick.  446;  Banchor  v. 
Cilley,  38  Me.  553;  Chase  v.  Stevens,  19 
N.  H.  465. 


1  Scott  V.  Campbell,  30  Ala.  728. 

2  Oliver  c.  Gray,  4  Ark.  425. 


§  56.]  WHO    ARE    PARTNERS.  49 

In  Ireland,  a  father  advanced  a  large  sum  to  a  partnership  for 
his  minor  son,  who  l)ecame  a  partner,  and  the  father  was  to  have 
the  right  of  knowledge,  advice,  <fec.,  and  the  accounts  of  the  part- 
nership were  rendered  to  him.  But,  the  firm  failing,  he  was 
adjudged  not  a  partner  ;  because  the  articles  did  not  provide  that 
he  might  withdraw  any  part  of  the  profits,  and  he  did  not  with- 
draw them  in  fact.  (/) 

But  where  one  party  really  engages  in  the  business,  thougli  he 
acts  nominally  for  another,  he  may  be  held  as  a  [)artner.  Thus 
wdiere  a  business  is  carried  on  by  a  firm  of  which  a  married 
woman  is  nominally  a  member,  though  the  husband  transacts  all 
the  business,  the  intention  is  evidently  that  he  shall  engage  in  the 
business,  and  he  is  a  partner.  ^ 

So  where  one  signed  partnership  articles  in  the  name  of  his 
mother,  but  acted  as  partner  in  the  business,  he  was  held  as  such.^ 
So  where  a  guardian  entered  into  articles  of  copartnership  in 
the  name  of  his  ward,  but  contributed  his  own  money  as  capital, 
assisted  in  the  business,  and  took  the  profits,  he  was  held  to  be  a 
partner,  and  not  his  ward.^ 

§  56.  Intention  to  escape  Liability  not  Enough.  —  Since  the 
intention  of  the  parties  to  form  an  association  which  the  law  calls 
a  partnership  is  the  test,  it  is  immaterial  whether  they  expect  to 
become  individually  liable.  So  wiiere  certain  persons  subscribed 
money  for  carrying  on  the  grocery  business,  and  called  themselves 
♦'  stockholders,"  expecting  to  avoid  individual  liability,  but  took 
no  steps  to  form  a  corporation,  they  were  held  partners.*  So 
where  a  corporation  is  projected,  but  business  is  carried  on  by  the 
intending  corporators  before  they  have  taken  steps  to  obtain  a 
charter,  they  are  lialjle  as  partners.^  They  are  also  so  liable  when 
they  vote,  after  the  expiration  of  the  charter,  to  continue  the 
business.^  And  where  a  corporation  is  in  fact  formed,  but  is  a 
merely  nominal  one,  the  parties  really  acting  for  a  partnership, 
they  have  been  held  partners.'  Where  three  persons  who  had 
combined  to  deal  in    land   and  water   rights  under  a  contract 

(/)  Barklie  v.   Scott,  1   Hudson  &  B.  83. 

1  Rabitte  v.  Orr,  83  Ala.  185,  3  So.  420. 

2  Bishop  V   Austin,  66  Mich.  515,  33  X.  W.  525. 

*  Miles  V.  Wann,  27  Minn.  56. 

*  Farnum  v.  Patch,  60  X.  H.  294. 

*  Citizens'  Bank  v.  Hine,  49  Conn.  236  ;  Martin  v.  Fewell,  79  Mo.  401  ;  McVicker 
V.  Cone,  21  Ore.  353,  28  Pac.  76. 

8  Nat.  Bank  of  AVatertown  v.  Landon,  45  N.  Y.  410. 
7  Farmer's  Bank  v.  Smith,  26  W.  Va.  541. 

4 


50  THE   LAW    OF   PARTNERSHIP.  [CH.  V. 

secured  a  charter  for  a  corporation  and  took  property  in  the  cor- 
porate name,  but  never  issued  stock  or  engaged  in  business  as  a 
corporation,  it  was  held  that  their  relation  was  that  of  a  partner- 
ship, the  assets  being  the  capital  stock  of  the  corporation.*  And 
where  individuals  bought  the  assets  of  a  railroad  company  but 
not  the  franchise,  and  carried  on  the  road  in  the  name  of  the 
corporation,  they  were  held  to  be  partners.^  Where  there  is 
shown  to  be  an  association  for  business  purposes  it  is  presumed 
to  be  a  partnership  ;  if  the  associates  wish  to  escape  liability 
on  the  ground  that  the  association  is  incorporated,  they  must 
prove  that  fact.^ 

8  57.  Intention  to  form  Corporation.  —  But  where  persons  unite 
to  form  a  corporation,  and  believe  that  they  have  done  so,  it  is 
clear  that  they  should  not  be  held  liable  as  partners  ;  for  they 
never  intended  to  form  an  association  which  the  law  calls  a 
^partnership.  In  accordance  with  this  principle  it  is  generally 
held  that  where  parties  believe  themselves  to  be  stockholders  in  a 
legal  corporation  they  cannot  be  held  liable  to  third  persons  as 
partners,  though  there  is  no  corporate  liability  ;*  and  it  is  imma- 
terial whether  the  corporate  liability  fails  by  reason  of  defective 
organization,  expiration  of  charter  powers,  unconstitutionality  of 
the  law  under  which  organization  was  attempted,^  excess  of 
power,  or  for  any  other  reason.  It  is  however  held  in  some 
jurisdictions  that  an  intended  corporation  not  legally  formed  is  a 
partnership,  and  the  stockholders  are  partners.^ 

Members  of  the  supposed  corporation  who  take  part  in  creating 
a  liability  to  a  third  party  are  individually  liable  to  him.'     And 

1  Shorb  V.  Beaudry,  56  Cal.  446. 

2  Chatfe  V.  Ludeling,  27  La.  Ann.  607. 

8  Clark  V.  Jones,  87  Ala.  474,  6  So.  362. 

4  Gartside  Coal  Co.  v.  Maxwell,  22  F.  R.  197  ;  Blanchard  v.  Kaull,  44  Cal.  440 
{semble)  ;  Humphreys  v.  Mooney,  5  Col.  282  ;  Stattoid  Nat.  Bank  v.  Palmer,  47  Conn. 
443  ;  Planter's  &  Miner's  Banlc  v.  Padgett,  69  Ga.  159  ;  Tarbell  v.  Page,  24  111.  46  ; 
Fay  V.  Noble,  7  Cusli.  188  ;  Trowbridge  v.  Scudder,  11  Cush.  83  ;  First  Nat.  Bank  v. 
Almy,  117  Mass.  476  [semble);  Ward  v.  Brigham,  127  Mass.  24;  Merchants  & 
Manufacturers'  Bank  v.  Stone,  38  Mich.  779  ;  Stout  v.  Zulick,  48  N.  J.  L.  599,  7  Atl. 
362  ;  Central  Bank  v.  Walker,  66  N.  Y.  424  ;  Jessup  v.  Carnegie,  80  N.  Y.  441 
(semble)  ;  Medill  v.  Collier,  16  Oh.  St.  599  ;  Newburg  Petroleum  Co.  v.  Weare,  27 
Oh.  St.  343  ;  Second  Nat.  Bank  v.  Hall,  35  Oh.  St.  158. 

&  Contra,  Eaton  v.  Walker,  76  Mich.  579,  43  N.  W.  638. 

6  Conner  v.  Abbott,  35  Ark.  365  ;  Coleman  v.  Coleman,  78  Ind.  344  ;  Kaiser  v. 
LawTence  Savings  Bank,  56  la.  104;  Hurt  v.  Salisbury,  55  Mo.  310;  Richardson  v. 
Pitts,  71  Mo.  128  ;  Abbott  v.  Omaha  Smelting  Co.,  4  Neb.  416.  Even  in  these  juris- 
dictions the  stockholders  could  not  be  held  as  partners  if  the  purpose  of  the  corporation 
was  not  to  do  business,  as  where  it  was  formed  to  extend  and  grade  a  street.  Johnson 
V.  Corser,  34  Minn.  355,  25  N.  W.  799. 

'  Rianhard  v.  Hovey,  13  Ohio,  300  ;  Rutherford  v.  Hill,  22  Ore.  218,  29  Pac.  546. 


§  59.]  WHO    ARE   PARTNERS.  51 

therefore  if  all  the  stockholders  of  a  corporation  knowingly 
engage  in  a  business  not  warranted  by  the  charter,^  or  continue 
business  after  the  expiration  of  the  charter,^  they  are  liable 
individually.  It  would  seem,  however,  that  even  in  this  case  the 
liability  is  not  that  of  partners,  but  is  either  an  imi)lied  warranty 
of  the  corporate  liability,  analogous  to  the  liability  of  one  who 
assumes  without  autliority  to  act  as  an  agent ;  ^  or  else  a  liability 
imposed  by  statute.* 

§  58.  Requisites  of  a  Partnership.  —  Different  phrascs  have  been 
employed  by  the  courts  to  explaiu  the  requisites  of  a  partnership. 
Thus  it  has  been  said  that  there  must  be  a  community  of  interest 
in  property  employed  in  business,  and  in  the  profits  ;  ^  a  com-, 
munity  of  interest  for  business  purposes  ;*^  a  comnmuity  of  interest 
in  a  business,  as  to  wliich  the  partners  are  mutually  principals 
and  agents,  with  general  powers  within  the  scope  of  the  business  ;' 
a  proprietary  interest  in  the  profits  as  such  before  division,  as 
principal  trader ;  ^  and  that  the  relation  of  agency  must  be 
created.^  These  all  approximate  the  true  rule.  They  are  so 
many  attempts  to  state  the  necessity  for  the  formation  of  a 
business  association  or  entity,  for  which  the  parties  are  to  act, 
and  with  which  their  relations  are  established. 

§  59.  Community  of  Loss  not  Essential.  —  Although  it  is 
undoubtedly  true,  that  in  much  the  greater  number  of  partner- 
ships there  is  a  comrauuity  of  loss  as  well  as  of  profit,  the  weight 
of  authority  as  well  as  of  reason  seems  to  be  decidedly  in  favor  of 
the  rule  that  there  may  be  a  legal  and  valid  partnership,  although 
one  or  more  of  the  partners  are  guaranteed  by  the  others  against 
loss.i**  And  even  if  one  of  the  parties  agrees  to  be  liable  for  losses, 

1  Ridenour  v.  Mayo,  40  Oh.  St.  9. 

2  Nat.  Bank  of  Wateitown  v.  Landon,  45  N.  Y.  410. 

3  Trowbridge  v.  Seudder,  11  Cush.  83. 

*  Sullivan  v.  Sullivan  Mfg.  Co.,  20  S.  C.  79. 

5  Dame  v.  Kenipster,  146  Mass.  454,  15  N.  E.  927. 

«  Priest  V.  Chouteau,  85  Mo.  398. 

7  Beecher  v.  Bush,  45  Mich.  188,  7  N.  W.  785.  See  Corey  u.  Cadwell,  86  Mich. 
570,  49  N.  W.  611  ;  Cogswell  v.  Wilson,  11  Ore.  371,  4  Pac.  1130. 

8  Gibson  v.  Smith,  31  Neb.  354,  47  N.  W.  1052. 

9  Wild  V.  Davenport,  48  N.  J.  L.  129,  7  Atl.  295. 

1*  In  spite  of  numerous  dicfa  to  the  contniry,  both  in  England  and  in  this  country, 
this  appears  to  be  the  law.  The  true  princiide  seems  to  l)e  laid  down  by  Lord  Eldon 
in  Ex  parte  Langdale.  18  Ves.  300  :  "  A  man,  who  is  to  have  no  profit,  may  be  a  part- 
ner, if  holding  himself  out  as  such  ;  as  by  lending  his  name.  He  may  also  be  a  partner 
when  the  contract  is  that  he  shall  suffer  no  loss  ;  and,  I  agree,  it  is  not  the  less  a  part- 
nership becau.se  part  of  the  contract  is,  that  they  are  not  to  suffer  by  bad  debts,  the 
personal  negligence  of  him  who  has  the  custody  of  the  articles,  by  fire,  &c."  See 
Brigham  v.  Dana,  29  Vt.  1.     So  in  Giljtiii  v.  Enderbey,  5  B.  &  Aid.  954,  where,  though 


52  THE   LAW   OF    PARTNERSHIP.  [CH.    V. 

although  he  is  not  to  participate  in  the  profits,  it  is  possible  that 
there  may  be  a  partnershi}).^ 

§  60.  Voluntary  Associations  and  Clubs.  —  It  WOuld  seem  that 
there  must  be  a  community  of  interest  for  business  purposes  ; 
though  it  cannot  be  said  that  partnership  exists  only  for  buyiiig 
and  selling ;  for,  as  we  shall  see,  physicians  and  lawyers,  who 
neither  buy  nor  sell  professionally,  may  yet  form  a  professional 
partnership,  which  is  entirely  legal  and  to  which  all  the  rules  and 
privileges  of  the  law  of  partnership  ai)ply.  Usually,  however,  the 
purpose  of  the  partnership  is  to  buy  goods  and  sell  them  again  ; 
and  in  all  cases  it  must  exist  for  the  purpose  of  making  a  profit. 
Hence,  voluntary  associations  or  clubs,  for  social  and  charitable 
purposes,  and  the  like,  are  not  proper  partnerships  ;  nor  have  their 
members  the  powers  and  responsibilities  of  partners.^ 

§  61.  Purpose  of  realizing  Profit  essential.  —  If  the  intention  of 
acting  in  common  is  limited  to  buying  and  making,  or  if  a  valu- 
able product  arises  from  a  contribution  to  common  stock  of  one 


one  of  the  parties  was  guaranteed  against  all  delits  and  losses,  there  being  no  usurj'  in 
the  case,  the  court  held  that  there  was  a  partnership,  though  of  a  peculiar  kind  ;  and 
the  circumstance  that  one  of  the  parties  was  not  to  bear  any  losses  was  not  adverted  to. 
See  Fereday  v.  Hordern,  Jacob,  144  ;  Manville  v.  Parks,  7  Col.  128  ;  Cochran  .  Bartle, 
91  Mo.  636,  3  S.  W.  8.'i4  ;  Pierson  v.  Sleinniyer,  4  Rich.  309. 

1  For  such  a  case,  see  Mandeville  v.  Mandeville,  35  Ga.  243. 

2  Fleniyng  v.  Hector,  2  M.  &  W.  172.  So  "clubs"  ai-e  neither  "  partnerships" 
nor  "associations"  within  the  meaning  of  the  Winding-up  Acts.  In  re  St.  James's 
Club,  2  De  G.,  M.  &  G.  383.  Nor  is  a  company,  the  purpose  of  which  is  the  purchase 
of  lands  with  funds  raised  by  subscription,  and  the  division  of  such  lands  amongst  the 
subscribers,  a  company  entitled  to  registration  under  7  &  8  Vict.  ch.  110,  wliich  (§  2) 
applies  only  to  associations  formed  "  for  any  commercial  or  trading  puriioses."  Queen 
V.  Whitmavsh,  15  Q.  B.  600.  See  Delauney  v.  Strickland,  2  Stark.  416  ;  Caldicott  v. 
Griffiths,  8  Exch.  898  ;  Cockerell  v.  Aucomjite,  2  C.  B.  N.  s.  440 ;  Briglit  v.  Hutton, 
3  H.  L.  C.  341.  In  re  Worcester  Corn  Exchange  Company,  3  DeG.,  M.  &  G.  180  ; 
Cheney  v.  Clark,  3  Vt.  431.  Persons  who  subscribe  in  writing  certain  sums  for  the 
purpose  of  building  a  meeting-house,  which,  when  completed,  is  to  be  the  property  of 
the  subscribers  in  the  proportion  of  their  subscriptions,  are  not  partners.  Woodward 
V.  Cowing,  41  Me.  1. 

So  a  voluntary  association  for  charitable  purposes  is  not  a  partnership.  Burke  v. 
Roper,  79  Ala.  138  ;  Lafond  v.  Deems,  81  N.  Y.  507.  Such  as  a  Young  Men's  Chris- 
tian Association,  Queen  v.  Robson,  16  Q.  B.  D.  137  ;  an  unincorporated  religious 
society,  Devoss  v.  Gray,  22  Oh.  St.  159  ;  or  a  Masonic  Lodge,  Ash  v.  Guie,  97  Pa. 
493.  An  association  formed  to  resist  the  claims  of  a  certain  patentee  is  not  a  partner- 
ship. Burt  V.  Lathrop,  52  Mich.  106,  17  N.  W.  716.  A  political  committee  is  not  a 
piirtnership.  Richmond  v.  Judy,  6  Mo.  App.  465.  An  association  formed  to  extend 
ami  grade  a  street  is  not  a  partnership.  Johnson  v.  Corser,  34  Minn.  355,  25  N.  W. 
799. 

When  such  an  association  undertakes  a  liability  only  those  members  are  liable  who 
either  voted  to  incur  the  liability  or  by  taking  some  part  in  the  business,  or  in  some 
other  way,  ratified  the  act  of  those  who  actually  incurred  the  liability.  Devoss  v.  Gray, 
22  Ohio  St.  159  ;  Ash  v.  Guie,  97  Pa.  493.     See  ante,  §  37. 


§  61.]  WHO    ARE    PARTNERS.  53 

thing  by  one  and  another  thing  by  another,  and  a  working  on  and 
with  those  tilings  by  both,  this  may  constitute  a  partnei-sliip  as  to 
the  ownership  of  that  product,  and  in  all  the  transactions  which 
led  to  it,  if  the  product  itself  is  to  be  sold  on  common  account, 
in  order  to  realize  a  profit.  This  would  be  a  numufacturing  part- 
nership. But  if  the  parties  thus  combine  stock  and  work  for  a 
product  to  be  divided  between  them,  and  not  for  sale,  but  for  each 
party  to  keep  and  use  the  share  that  falls  to  him,  it  is  not  a  partner- 
ship.^ So,  where  one  party  let  another  have  all  the  timber  on  his 
land,  and  the  other  was  to  saw  it,  and  pay  to  the  first  one-fifth  of 
the  gross  proceeds,  this  did  not  constitute  them  partners.^ 

In  short,  the  law  of  partnership  requires  a  community  of  interest 
in  the  profits  resulting  from  the  business  or  work  done.  {<j)    Thus, 

(g)  Thus  ill  Hoaie  v.  Dawes,  1  Doug,  wliere  Lord  Loughborough  says  :  "  If  the 

371,  several  persons  liad  employed  a  broker  j)arties  be  jointly  concerned  in  the  pur- 

to  purchase  a  lot  of  tea,  of  which  they  were  chase  they  must  also  lie  jointly  concerned 

to  have  a  separate  share.     The  (question  in  the  future  sale  ;  otherwise  the}-  are  not 

being  whether  the  employers  of  the  broker  partners.'      On  the   same   principle  joint 

were  partners,  so  as  to  make  any  one  of  purchases  of  land,  or  even  of  merchandise, 

them  liable  for  the  price  of  all  the  tea  so  by  two  or  more  cannot  have  the  effect  of 

purchased,  it  was  held,  that  they  were  not ;  making  them    partners,  nor  of  raising  a 

since   there  was  no  communion   of  prolit  presumption  that  they  are  so.     Porter  v. 

and  loss,  but  merely  an  undertaking  wich  M'Clure,  15  Wend.  187;  Ballon  u.  Spencer, 

the  broker  by  each  for  a  particular  ([uan-  4  Cow.  163  ;  Brady  c.  Calhoun,  1  P.  &  W. 

tity.     So  in  Coope  v.  Eyre,  1  H.  Bl.  37,  140  ;    Gilmore    v.    Black,    11    Me.    485  ; 

^  An  agreement  to  cultivate  a  farm  "  on  shares  "  is  of  this  sort.  The  better  view  is 
that  where  the  object  is  to  divide  the  crop  in  kind  between  the  partners  it  is  no  part- 
nership. Gardeniiire  v  Smith,  39  Ark.  280  ;  Blue  v.  Leathers,  15  111.  31  ;  Donnell  v. 
Harshe,  67  Mo.  170  ;  Musser  v.  Brink,  68  Mo.  '242,  80  Mo.  350  :  Clifton  v.  Howard,  89 
Mo.  192  ;  Putnam  v.  Wise,  1  Hill,  234  ;  Reynolds  v.  Pool,  84  N.  C.  37  ;  Day  w.  Stevens, 
88  N.  C.  83  (explaining  Curtis  v.  Cash,  84  N.  C.  41)  ;  Brown  v.  Jaquette,  94  Pa.  113  ; 
Murray  v.  Stevens,  1  P»ich.  Cas.  205.  Contra,  Holifield  i*.  White,  52  Ga.  567  (but  see 
Holloway  v.  Brinkley,  42  Ga.  226  ;  Smith  v.  Summerlin,  48  Ga.  425). 

In  accordance  with  this  princijile,  it  is  almost  universally  held  that  a  combination 
to  produce  something  and  divide  the  product  is  not  a  partnership.  Gibson  v.  Lupton, 
9  Bing.  297.  So  of  a  combination  to  work  a  gold-mine  and  divide  the  gold,  Gilnian  v. 
Cunningham,  42  Me.  98  ;  to  fish  and  divide  the  fish  caught.  Hurley  r.  Walton,  63  111. 
260  ;  to  make  and  divide  bricks,  Haycock  v.  Williams,  54  Ark.  384,  16  S.  W.  3  ;  Lamont 
V.  FuUam,  133  Mass.  583  ;  Chapman  v.  Lipscomb,  18  S.  C.  222  ;  to  manufacture  and 
divide  lumber,  Robinson  v.  Bullock,  58  Ala.  618;  Stoallings  v.  Baker,  15  Mo.  481. 
Contni,  Musier  v.  Truni])bour,  5  Wend.  274.  See  Everitt  v.  Cliapman,  6  Conn.  347  ; 
Loomis  V.  Marshall,  12  Conn.  69  ;  Bncknam  c.  Barnum,  15  Conn.  67,  73. 

So  where  the  owner  of  land  agreed  to  allow  a  ditch  to  be  built  through  the  land,  and 
to  pay  a  quarter  of  the  expense,  and  he  was  to  have  a  quarter  interest  in  the  ditch  and 
water,  this  was  held  not  to  be  a  partnership.     Fitzell  v.  Leaky,  72  Cal.  477,  14  Pac.  198. 

Where,  however,  the  agreement  is  interpreted  as  securing  a  division  of  the  proceeds 
of  the  product,  and  not  of  the  product  itself,  there  is  a  jiartnership.  Ensign  v.  Wands, 
I  Johns.  Cas.  171  ;  Farmers'  Ins.  Co.  v.  Ross,  29  Oh.  St.  429  ;  Whitney  v.  Ludington, 
17  Wis.  140. 

9  Fail  V.  McRee,  36  Ala.  61. 


54  THE   LAW   OF   PARTNERSHIP.  [CH.    V. 

if  persons  purchase  goods  to  be  sent  on  a  mercantile  adventure, 
the  proceeds  to  be  reinvested  in  a  return  cargo,  though  there  be  a 
partnership  in  the  buying  of  the  goods,  and  in  the  sending  of  them 
abroad  and  tliere  selling  them,  there  is  still  no  partnership  in  the 
purchase  or  the  ownership  of  the  return  cargo,  unless  that  cargo 
was  to  be  sold  for  the  common  benefit.  For  if  it  is  to  be  divided 
m  specie,  each  of  the  company  taking  in  severalty  his  share,  it 
may  be  doubted  whether  it  could  be  said  that  there  was  any 
partnership  in  the  return  cargo.  (A) 

So  if  three  or  four  persons  agree  to  buy  jointly  all  of  a  certain 
commodity  in  the  market,  and  agree  that  one  only  shall  buy  for 
all,  and  that  what  he  buys  shall  be  divided  between  them,  they 
are  not  partners,  for  the  want  of  a  community  in  the  disposition 
of  the  merchandise.  (^) 

§  62.  Professional  Partnerships.  —  Professional  men,  like  physi- 
cians or  lawyers,  are  partners,  if  the  earnings  of  all  come  into  a 
common  stock  or  fund,  and  not  until  then  are  divided  and  held  in 
severalty,  (j^  They  may  call  themselves  partners  ;  but  if  each 
charges  in  his  own  favor  what  he  earns,  and  each  has  a  right  to 
demand  and  sue  for  this  in  severalty,  they  are  not  partners 
inter  se,  however  liable  they  might  be  to  others  from  calling 
themselves  so.  (k} 

§  63.  Contributions  of  Capital.  —  It  is  not  necessary  that  each 
partner  should  bring  into  the  common  stock  both  labor  and  prop- 
erty. It  is  a  familiar  principle,  quite  frequently  put  in  practice, 
that  one  or  more  of  the  partners  may  contribute  money  alone, 

Putnam  v.  Wise,  1  Hill,  234;  Barton  v.  (j)  Bond  v.  Pittard,  3  M.   &  W.  357. 

Williams,   5    B.    &   Aid.    395  ;    Noyes   v.  In    Darracott  v.  Penington,   34  Ga.,   the 

Cushman,  25  Vt.  390.  court  consider  the  nature  and  objects  of  a 

(/t)  Holmes   v.  United  Insurance  Co.,  law  partnership.      See  Atkinson  v.  Mac- 

2  Johns.    Cas.    329  ;    Post    v.    Kimberly,  kreth,  L.  R.  2  Eq.  570. 

9  Johns.  470.     See  Thorndike  v.  De  Woff,  (k)    Finckle  v.  Stacy,  Sel.  Ca.  Ch.  9, 

6   Pick.    120  ;    United    Insurance   Co.    v.  where  joint  articles  were  entered  into  by 

Scott,  1  Johns.  106.     The  same  principle  two    persons    for  the  doing   a    particular 

is   frequently   illustrated    in    cases   where  piece  of  work,  on  account  of  which  several 

goods,  purchased  either  with  joint  or  sep-  sums  of  money  were  jointly  received  by 

arate  funds,  are  sent  on  a  common  adven-  them,   and  immediately  divided   between 

ture,  but  are  to  be  sold  by  the  consignee  them  ;    though  the  court  was  of   opinion 

or  agent  on  separate  account.     Harding  v.  that  it  was  not  to  be  considered  a  part- 

Foxcroft,  6  Me.  76  ;  Jackson  v.  Eobinson,  nership,   but  only  an  agreement  to  do  a 

3  Mason,  138  ;  Hall  v.  Leigh,  8  Cranch,  particular  act,  between  which  there  was 
50.  See  also  Felichy  v.  Hamilton,  1  Wash,  great  difference  ;  and  that  it  was  so  was 
C.  C.  491  ;  Osborne  v.  Brennan,  2  N.  &  plain,  for  the  money  which  thej'  received 
McC.  427  ;  Gibson  v.  Lupton,  9  Bing.  297;  they  immediately  divided,  and  did  not  lay 
Sims  V.  AVilling,  8  S.  &  R.  103.  out  on  a  common  account.     See  also  Por- 

(?)  Coope  V.  Eyre,  1  H.  Bl.  37.     See     ter  v.  Jl'Clure,  15  Wend.  187. 
Ward  V.  Gaunt,  6  Duer,  257. 


§63.] 


WHO    ARE    PARTNERS. 


55 


while  one  or  two  others  may  contribute  labor  and  money,  or 
labor  alone.  (/)  And  indeed  all  may  contribute  labor,  and  none 
money,  (/n) 

The  doctrine  is  laid  down  in  some  cases,  that  there  may  be  a 
partnership  in  the  i)rolits,  where  there  is  none  in  the  property,  (n) 
This  seems  opposed  to  the  nature  of  a  partnershij),  in  which  there 


(/)  Reid   V.    Hollinshead,    4    B.    &   C. 
867  ;  Ex  parte  Chuck,  8  Bing.  469  ;    Can- 
dler V.  Candler,  d   Madd.    141  ;    Bovill  v. 
Hammond,  6  B.  &  C.  149  ;  Dob  v.  Halsey, 
16  Johns.   34  ;    Cregj^  Towtislii[i  v.   Halt- 
Moon  Tovvnshijt,  2  Watts,  342  ;    Simpson 
V.    Fetz,    1   McCord  Ch.    213 ;    Potter  v. 
Moses,   1  R.    I.    430 ;     Winship  v.    Bank 
of  the  United  States,  5  Pet.  529  ;  Tihhatts 
i;.    Tibhatts,    6     Mcjjean,    80 ;     Biace   v. 
Washburn,  43  Me.    564;    Wood   v.  Val- 
lette,    7    Oh.    St.    122.      See    Dwinel    v. 
Stone,  30  Me.  384  ;    Wright  v.  Davidson, 
13   Minn.    449  ;    Parker   v.    Cantield,    37 
Conn.  250  ;  Pettee  v.  Appleton,  114  Mass. 
114  ;  Howland  v.  Long,  45  Md.  439.     So 
an  agreement  that  A.  shall  fnriush  a  stock 
of  goods,  shop  fixtures,  &c.,  and  that  B. 
shall   pay  the  rent  of   the  shop,  manage 
the  business,  and  pay  A.  interest  on  one- 
half  of  the  fixtures,  the  profits  to  be  di- 
vided equally,  renders  A.  and  B.  partners 
as  to  third  jjarties,  although   it   be   orally 
understood,  at  the  time  of  executing  the 
agreement,  that  the  share  of  profits  to  B. 
shall  be  in   lieu  of   salary.     Brighani   v. 
Clark,   100  Mass.  430.     Where  one    con- 
tributes the  use  of  real  estate,   and  the 
other  furnishes  eajjital  and  labor,  where- 
by the  former  is  utilized,   the  profits  to 
be  divided,   a  partnership  is  constituted. 
Wood  V.  Beath,  23  Wis.  254  ;    Dalton  v. 
Dalton,  33  Ga.  343.      Anything  of  value 
for   the   use   of    the   partnership,    as    for 
example  a  license  to  trade,  is  a  sufficient 
contribution    to    the    joint   funds.      The 
Herkimer,    Stewart    Adm.    23,    24.     Nor 
need   the  property  itself  be  put  into  the 
common  stock.     On  the  other  hand,  the 
capital  of  a  firm  may  consist  of  the  mere 
use  of  pioperty  owned  by  the  individual 
partners     separately.      Chancellor     Wal- 
woi'th,     in    Champion    v.     Bostwick,    18 
Wend.  183. 

(hi)  Not  only  may  one  partner  con- 
tribute labor  alone  to  the  joint  under- 
taking, Imt  the  contributions  of   all   the 


partners,  and  the  whole  capital  of  the 
tirni,  may  consist  substantially  of  per.sonal 
services,  as  is  generally  tlie  case  in  piofes- 
sional  partnershii)s  between  soiicitois, 
{•hysicians,  ic.  See  Tench  v.  Roberts, 
6  Madd,  145,  note  (a).  So  where  two 
commission  houses,  one  in  London,  the 
other  in  Rio  Janeiro,  in  accordance  with 
mutual  stipulations,  recommend  customers 
to  each  otlier,  and  divide  equally  the  com- 
missions on  the  sitle  of  all  goods  thus  re- 
commended by  the  one  house  to  the  other, 
quoad  hoc  they  are  partners,  the  capital  of 
the  partnership  being  the  partners'  mutual 
exertion  of  influence  in  each  other's  favor. 
Cheap  V.  Cramond,  4  B.  «Ss  Aid.  663.  See 
Dix  V.  Otis,  5  Pick.  38. 

(a)  Mever  v.  Sharpe,  5  Taunt.  74  ; 
Ex  parte  Hodgkinson,  19  Ves.  291  ;  Dry 
V.  Boswell,  1  Camp.  329  ;  Wi.sh  v.  Small, 
1  Camp.  331,  note;  Patterson,  J.,  in  Bur- 
nell  I'.  Hunt,  5  Jur.  650 ;  Mair  v.  Glennie, 
4  M.  &  S.  240;  Ward  v.  Thompson,  1  Newb. 
Adm.  95  ;  Bryant  v.  Wardell,  2  Exch. 
479 ;  Brigham  v.  Dana,  3  Williani.s,  1. 
[Bullard  V.  Smith,  139  Mass.  492,  2  X. 
E.  86.]  In  Chase  v,  Barrett,  4  Paige, 
148,  however,  the  doctrine  is  distinctly 
asserted  by  AVahvorth,  Chancellor,  that, 
to  "  constitute  a  partnership  as  between 
the  parties  themselves,  there  must  be  a 
joint  ownership  of  the  partnership  funds, 
according  to  the  intention  of  the  ]>arties." 
See  also  Dwinel  v.  Stone,  30  Me.  384  ; 
Lowry  v.  Brooks,  2  McCord,  421  ;  Ogden 
r.  Astor,  4  San<lf.  322  ;  Beecham  v.  Dodd, 
3  Harr.  (Del.)  485;  McCauley  y.  Cleveland, 
21  Mo.  438.  So  where  three  parties  agree 
"to  enter  upon  an  operation  embracing  the 
purchasing  and  selling  of  shingles,"  —  one 
to  purchase,  and  the  other  two  to  receive 
and  sell,  the  shingles  to  Vie  the  property 
of  these  two,  who  were  to  furnish  the 
capital, — all  to  share  equally  the  profits 
and  losses,  the}'  are  partners.  Getchell 
V.  Foster,  106  Mass.  42. 


56 


THE    LAW    OF    PARTNERSHIP. 


[CH.    V. 


is  a  contribution  of  something  for  the  joint  benefit.  Whatever  is 
contributed  becomes  the  i)roi)erty  of  the  partnership,  and  die 
partners  have  equal  power  over  it.  Tlie  true  explanation  seems 
to  be  that  in  such  cases,  though  the  property  itself  is  not  owned 
by  the  partnership,  yet  the  use  of  it  forms  part  of  the  capital 
stock,  and  is  the  contribution  of  that  partner  to  whom  the  property 
belongs,  (o)  ^ 

§  64.  Failure  of  essential  Element  of  Partnership.  —  The  ])rin- 
ciples  or  rules  above  stated  as  defining  or  describing  a  partner- 
ship, may  be  further  illustrated  by  cases  in  which  joint  business 
transactions  have  been  conducted,  but  were  held  not  to  constitute  a 
partnership,  for  the  want  of  some  essential  ingredient,  as  where  the 
contributions  of  all  the  parties  were  not  mingled  into  common 
stock.  (/»)  So  where  the  capital  and  labor  employed  were  not 
combined  together  for  business  purposes  and  a  common  profit,  (q) 


(o)  Hence  the  creditors  of  one  who  is 
partner  only  in  the  profits  cannot  take  in 
execution  the  property  which  is  contribu- 
ted as  capital  wliolly  by  the  other  partner. 
Ej'  pirtc  Hamper,  17  Ves.  404  ;  Ex  jMrtc 
lioulandson,  1  Rose,  89  ;  Blanchard  v. 
Cor.lidge,  22  Pick.  151  ;  Bartlett  i;.  Jones, 
2  Strobh.  471. 

(p)  In  Smith  v.  Wright,  5  Sandf.  113, 
two  mercantile  houses  had  carried  on  a 
joint  business  under  the  following  ar- 
rangement: Each  firm  agreed,  in  its  own 
name  and  with  its  own  funds,  to  make 
purcliases  and  sales  of  flour  and  other 
produce.  But  all  such  contracts  were  to 
be  made  for  the  joint  account  and  benefit  of 
the  two  firms,  who  were  to  share  equally 
in  the  profits  and  losses  resulting  from 
the  separate  dealings  of  each  firm  in  this 
particular  line  of  business.  Upon  the 
(question  whether  this  agreement  constit- 
uted the  parties  to  it  partners,  Sand  ford, 
J. ,  said  :  "  There  was  no  union  of  funds 
contemplated  by  the  agreement.  Each 
firm  was  to  make  and  fulfil  its  own  con- 
tracts. There  was  no  union  of  services, 
because  it  might  so  happen  that  one  ot 
the  firms  would  be  unable,  or  deem  it 
unwise,  to  make  any  contracts  at  all ;  and 


yet,  in  the  absence  of  bad  faith,  it  would 
participate  in  the  profits,  and  would 
certainly  be  liable  to  share  the  losses  of 
the  contracts  made  by  the  other  firm. 
The  whole  effect  of  the  agreement  was  to 
bind  two  distinct  mercantile  houses,  act- 
ing in  their  own  names,  separately  and 
independently  of  each  other,  to  share  the 
profits  and  losses,  when  they  should  be 
ascertained,  arising  from  one  paiticular 
department  of  their  trade.  We  think  that 
this  did  not  constitute  the  two  firms  copart- 
ners in  the  contracts,  which  the  respective 
separate  firms  made  in  the  transaction  ot 
that  portion  of  their  business."  Benson 
V.  M'Bee,  2  McMullen,  91. 

(q)  Thus  a  deed  of  assignment  by  a 
debtor  of  all  his  propeiiy  to  trustees  for 
the  benefit  of  creditors,  contaiidng  a 
clause  by  which  the  trustees  are  author- 
ized to  carry  on  the  trade  of  the  debtor, 
will  not  make  the  creditors  who  sign  the 
deed  partners,  if  the  carrying  on  of  the 
business  is  merely  auxiliary  to  winding 
up  the  debtor's  affairs,  and  has  in  view 
merely  the  realization  of  his  jnojierty. 
Owen  V.  Body,  5  A.  &  E.  28 ;  Janes  v. 
Wliitbread,  11  C.  B.  4(/6  ;  Coate  v.  Wil- 
liams, 9  C.  B.  481. 


'■  See  the  .language  of  Lord  Cairns  in  Syers  v.  Syers,  1  App.  Ca.s.  174,  181.  By 
agreement  between  the  partners,  the  title  to  [iroperty  used  in  the  business  may  remain 
in  one  partner.  In  such  a  case  the  use  of  tiie  proiieity  is  contributed,  and  belongs  to 
the  partnership.  Rushing  v.  Peoyiles,  42  Ark.  390  ;  Stumph  v.  Bower,  76  Ind.  157 ; 
Hankey  v.  Becht,  25  Minn.  212  ;  Clements  v.  Jessup,  36  N.  J.  Eii-  569. 


§  05.] 


WHO    ARE   PARTNERS. 


57 


And  it  seems  that  tlierc  is  a  difference  between  an  enterprise 
undertaken  by  a  number  of  persons  jointly,  with  the  intent 
thereby  to  diminish  a  loss,  and  one  for  the  sake  of  profit,  properly 
speaking,  (r) 

A  mere  contingent  interest  in  proi)crty,  without  light  in  the 
property  of  the  iirm  and  without  responsibility  for  losses, 
constitutes    no    partnership,  (s). 

^  ^jH.  Typical  Form  of  Partnership. — The  mOSt  unmistakable, 
and  perhaps  the  most  common,  form  of  partnership,  is  where  two 
or  more  persons  agree  to  contribute  both  capital  and  labor,  and  to 
share  in  both  prolit  and  loss,  equally  or  in  certain  specified  pro- 
])ortions.  (i)  Such  an  agreement  being  executed,  there  can  be  no 
question  as  to  the  existence  of  a  complete  partnership.^ 

(r)    As    where    underwriters,    having  Talbot,  2  Gol.  639,  contract  to  keep  and 

separately  insured,   and  separately  accep-  sell  cattle  ;  Anten  v.  Ellingwood,  51  How. 

ted    an   abandonment  of    a   vessel,   then  (Pr. )    359,     editing    and     conducting    a 

unite  in  prosecuting  the  original  voyage,  newspaper  ;    Marsh  v.  Is.  W.   Ins.  Co.,  3 

"it  is  carrying  the  general  principle  too  Biss.   351  ;    Lewis  v.  Greider,    51   N.    Y. 

far  to  consider  them  in  the  light  of  com-  231,  single  mercantile  adventure,  —  series 

mon  partners,"  since  they  take  the  vessel  of  adventures  ;  but  see  Smith  v.  Wright, 

only    for   the   purpose   of    diminishing   a  i  Abb.  A]ip.  274  ;    cheese-factory  associa- 

loss,  and  with  no  other  view  than   to  sell  tion,    Hawley   v.    Keeler,   62   Barl).    231  ; 

her  at  its  termination.     Livingston,  J.,  in  purchase   of  land  and   erecting  buildings 

United  Lis.   Co.  v.   Scott,  1  Johns.  112.  thereon,   Kelshaw   v.  Jukes,  8   L.  T.  N.  s. 

So,   where  a  debtor,   in   consideiation   of  387  ;   joint  contract  to  perform  labor  and 

his  indebtedness,  transfers  the  control  of  furnish    materials,   each   a    sjiecific    part, 

his  business  to  his  creditors,  the  latter  to  Smitli  v.  jMoynahan,  44  Cal.  53  ;    advance 

receive  a  large  share  of  the  profits  until  of  money  for  prosecution   of   business    to 

the  indebtedness  of   the  former  shall  be  be  reiihbursed  out  of  sales,  with  share  of 

reduced  to  a  specified  amount,  the  debtor  jirofits  in  lieu  of  interest,  Lintner  v.  Mil- 

and  his  creditors  are  not  partners.     Bran-  likin,  47  111.   178.     See  also  Edwards  v. 

dred  v.  Muzzy,  1  Dutch.  268.     See  Price  Tracy,  62  Pa.  374  ;  Dailey  v.  Hall,  5  Bush, 

V.  Groom,  2  Exch.  542  ;  post,  §  74.  549  ;    Freese  v.  Ideson,  49  111.  191  ;    Par- 

(s)  Com.  V.  Bennett,   118   Mass.   443;  ker  v.  Canfield,  37  Conn.  317.     A  debt  of 


Haskins  v.  Warren,  115  Mass.  514; 
Campbell  v.  Dent,  54  Mo.  325  ;  Eastman 
V.  Clarke,  53  N.  H.  276;  Bendell  v. 
Hettrick.  45  How.  (N.  Y.)  Pr.  198  ; 
Crawford  v.  Austin,  34  JMd.  49  ;  Morgan 
V.  Stearns,  41  Vt.  397  ;    Chapline  v.  Con- 


A.  is  transferred  to  and  assumed  by  B., 
who  is  to  pay  it  out  of  the  profits  of  a 
piartnership.  This  does  not  make  A.  a 
member  of  the  firm.  Delaney  i\  Timber- 
lake,  23  Minn.  383.  [So  an  agreement 
that   one   party  should    furnish  logs,  the 


ant,  3  W.  Va.  507  ;  Parker  v.  Fergus,  43  other  saw  them  at  his  mill,  and  the  pro- 
Ill.  437  ;  Smith  v.  Vanderberg,  46  111.  34  ;  ceeds  after  jiayment  of  the  expense  of 
Mason  v.  Hackett,  4  Nev.  420  ;  Hargrave  marketing  and  selling  be  divided,  does 
V.  Conroy,  4  Green  (N.  J.),  281.  As  to  not  create  a  partnership.  Nelms  v.  Mc- 
special  facts  which  do  not  constitute  a  Graw,  93  Ala.  245,  9  So.  719.] 
]iartnership,  see  further  Morrison  v.  Cole,  (t)  As  to  what  particular  facts  consti- 
30  Mich.  102,  contract  of  one  to  deliver  tute  a  partnership  in  special  cases,  see 
to  the  other  hay,  which  the  latter  is  to  innher  Ej:  parf.e  Good,  5  Ch.  D.  46  ;  Duff 
take   to    market   and   sell  ;    Beckwith    v.  v.    McGuire,    99   Iklass.    300  ;    Decker   v. 

1  Metcalf  V.  Royal  Exchange  Assur.  Co.,  Barnard.  Ch.  343;  Green  v.  Beesley,  2  Bing. 
N.  C,  108  ;  Brown  v.  Tapscott,  6  M.  &  W.,  119  ;  Wilson  v.  Whitehead,  10  M.  &  W. 


58  THE   LAW   OF   PARTNERSHIP.  [CH.    V. 

Where  parties  agree  to  enter  into  an  association  for  the  pur- 
pose of  buying  and  selling,  and  carrying  on  a  joint  business 
indefinitely,  no  stipulation  for  dividing  profit  and  loss  is  necessary, 
as  that  is  an  incident  to  the  prosecution  of  their  joint  business.^ 

An  agreement  for  a  division  of  profits  raises  a  presumption  of 
partnership.^ 

§  66.  Partnership  in  a  single  Transaction.  —  It  not  Ullfrequcntly 
happens,  that  persons  enter  into  partnership  without  knowing  it; 
that  is,  they  make  a  bargain  together,  without  knowing  that  it 
creates  or  involves  a  partnership,  and  subjects  them  to  the  law  of 
partnership  This  occurs  most  frequently  when  the  agreement 
relates  to  a  single  transaction,  or  to  one  or  two  only.  There  is  a 
common  impression  that  nothing  is  a  partnership  at  law  which 
does  not  cover  the  whole  ground  of  some  kind  of  business ;  but 
this  is  not  so.  If,  for  example,  one  has  goods  in  the  hands  of  a 
factor  or  commission  merchant,  and  he  and  another  person  enter 
into  an  agreement  for  a  valid  consideration  to  share  the  profit 
and  loss  of  those  goods,  this  constitutes  them  partners ;  and  the 
rule  has  been  applied  in  such  a  case,  where  the  owner  of  the  goods 
agreed  to  guarantee  to  the  other  party  the  solvency  of  the  com- 
mission   house,  (w)     So    persons    associating,  and    contributing 

Howell,  42  Cal.  636  ;  mining  enterprises,  Hedge's  Appeal,  63  Pn.  273  ;  lumbering 
Pettee  «.  Appleton,  114  Mass.  114  ;  Adams  enter])rise,  U])ham  v.  Hewett,  42  Wis. '85. 
V.  Carter,  53  Ga.  160  ;  brickmaking,  {u)  Salomons  v.  Nissen,  2  T.  R.  674. 
Farmer's  Ins.  Co.  v.  Ross,  29  Ohio  St.  So,  it'  two  ineicantile  houses  recommend 
429  ;  farming,  Beauregard  v.  Case,  91  consignments  to  eacli  other,  and  divide  the 
U.  S.  134  ;  leasing  a  railroad.  Wills  v.  gross  commissions  on  all  sales  of  goods  so 
Sinimonds,  51  How.  (Pr. )  48  ;  agreement  recommended,  7«oa(^/ioc  they  are  partners, 
between  tinner  and  plumber  to  work  to-  Cheap  v.  Cramond,  4  B.  &  Aid.  663.  So, 
gether,  Tyler  r.  Scott,  45  Vt.  261 ;  job-  also,  where  two  jointly  undertake  to  pro- 
bing, Gillbank  v.  Stephenson,  31  Wis.  592;  cure  a  caigo  for  a  vessel,  the  commission 
agreement  to  jiurchase  and  man  a  ferry-  therefor  to  be  divided  between  them, 
boat.  Whitman  v.  Porter,  107  Mass.  522  ;  Bovill  v.  Hammond,  6  B.  &  C.  149. 
joint-stock  association,  unincorporated,  for  And  where  D.  &  W.  were  owners  of  a  quan- 
purchase    of    land    and    boring    for    oil,  tity  of  salt,   taken  to   secure  themselves 

503  ;  Emanuel  v.  Draughn,  14  Ala.  303  ;  Soule  v.  Hayward,  1  Cal.  345  ;  Fisher  v. 
Sweet,  67  Cal.  228,  7  Pac.  657  ;  Doak  v.  Swann,  8  Me.  170  ;  Wadsworth  v.  Manning, 
4  Md.  59  ;  Goddard  v.  Pratt,  16  Pick.  412  ;  Quine  v.  Quine,  9  Sm.  &  M.  155  ;  Halsted 
V.  Schmelzel,  17  Johns.  80 ;  Cumpston  v.  McNair,  1  Wend.  457  ;  Griffith  v.  Butfum,  22 
Vt.  181. 

1  Miller  V.  Hughes,  1  A.  K.  Marsh.  181  ;  Barrett  ;;.  Swann,  17  Me.  180. 

2  Badeley  v.  Consolidated  Bank,  38  Ch.  Div.  238  ;  Meehan  v.  Valentine,  145  U.  S. 
611  ;  In  re  Francis,  2  Sawy.  286,  7  N.  B.  R.  359  ;  Duryea  v.  Burt,  28  Cal.  569 ;  Dubos 
V.  Hoover,  25  Fla.  720,  6  So.  788  ;  Niehott"  r.  Dudley,  40  111.  406  ;  Lockwood  v.  Bonne, 
107  111.  235  ;  Corey  v.  Cadwell,  86  Mich.  570,  49  N.  W.  611  ;  Philips  v.  Samuel,  To 
Mo.  657  ;  Fourth  Nat.  Bank  v.  Althcimer,  91  Mo.  190,  3  S.  W.  858  ;  Piobinson  n. 
Allen,  85  Va.  721,  8  S.  E.  835  (scinhle). 


§  69.]  WHO    ARE   PARTNERS.  59 

money  to  obtain  a  Ijill  for  a  railroad,  in  Parliament,  were  held  to 
be  partners  in  this  enterprise,  (v)  A  known  and  acknowledged 
partnership,  doing  a  regular  business,  may  enter  into  a  bargain 
for  purchase,  sale,  and  joint  profit,  with  a  third  party,  in  regard 
to  some  single  transaction,  which  makes  them  all  partners  therein. 
In  such  case,  the  third  person  is  not  admitted  into  the  former 
partnership  ;  nor  is  the  partnership  which  is  created  by  the  bar- 
gain one  between  the  old  partnershi[)  and  the  new  man;  but  the 
members  of  the  old  partnership,  and  the  third  person,  all  as  indi- 
viduals, constitute  a  new  partnership,  {w) 

§  67.  Partnership  to  deal  in  Land.  —  It  is  generally  lield  that 
where  two  agree  to  buy  land  and  re-sell  it,  sharing  the  profit,  this 
constitutes  them  partners.^  It  makes  no  difference  that  one  party 
furnishes  the  money  and  takes  title  to  the  land,  while  the  other 
furnishes  his  own  services.^  It  has  however  been  lield  that  such 
an  agreement  did  not  constitute  a  partnership,  but  was  a  single 
joint  adventure.^ 

§  68.  Relationships  other  than  Partnership.  —  In  accordance  with 
the  principles  that  have  been  laid  down,  if  the  parties  have  formed 
a  relation  inter  se  which  is  not  in  fact  the  creation  of  a  partner- 
ship, their  act  cannot  be  relied  upon  to  make  them  partners. 
For  instance,  if  one  becomes  the  servant,  creditor,  or  landlord 
of  the  other  he  cannot,  merely  by  coming  into  such  a  relation, 
be  declared  a  partner,  though  in  fact  he  may  receive  compensa- 
tion in  the  form  of  profits.  This  is  now  generally  recognized  in 
the  cases. 

§  69.    Agent  or  Servant.  —  It  is  now  quite  settled  that  one  acting 

against  their  joint  liability  as  iudorsers  of  White,  3  B.  Mon.  268  ;   Benson  v.  M'Bee, 

a  note,  and  by  agreement  between  them  D.  2  MeMull,  91. 

took  the  salt  to  market  to  sell  on  joint  (v)  Holmes  v.  Higgins,  1  B.  &  C.  74 

account,  and  did  sell  it,  and  the  proceeds  {w)  Ex  parte  Gellar,  1  Rose,  297.     [For 

were  applied  for  the  joint  benefit,  it  was  other  instances  of  partnerships  in  a  single 

held,  that  D.  &  W.  were  partners  in  this  transaction,   see    Bobbins   ii.  Laswell,    27 

transaction.      Cnmpston    v.     MeNair,     1  III.    365    (buying    and    selling    cattle)  ; 

"Wend.  457.     In  like  manner,  if  the  pro-  Meador  v.  Hughes,  14  Bush  652  (buying 

prietors  of  separate  lines  of  stage-coaches  and  jiacking  hogs)  ;    Staples  v.   Sprague, 

hire  and  keep  a  stable  in  common  for  their  75  Me.   458    (cutting  and  packing   ice)  ; 

coach  horses,  and  em|>loy  and  pay  a  hostler  Lynch  v.  Thompson,  61  Miss.  354  (raising 

at  their  joint  expense,  a  partnership  exists  and  dismantling  a  sunken  vessel) ;  Henry 

between  them  for  these  purposes.     Ripley  v.  Bassett,  75  Mo.   89   (attorne3'S  jointly 

V.  Colby,  23  N.   H.   438.     See  Bentlcy  v.  employed  in  a  law-suit).] 

1  Moore  v.  Davis,  11  Cli.  D.  261  ;  Yeoman  v.  Laslej',  40  Oh.  St.  190  ■•  Hulett  v. 
Fairbanks,  40  Oh.  St.  233  ;  Canada  ■;;.  Barksdnle,  76  Ya.  899. 

2  Simpson  v.  Tenney,  41  Kas.  561,  21  Pac.  634. 
8  Clark  V.  Sidway,  142  U.  S.  682. 


GO  THE    LAW    OP    PARTNERSHIP.  [CH.    V, 

for  another  as  agent  or  servant  does  not  become  a  partner  with 
liabilities  as  such,  merely  by  receiving  a  certain  proj)ortion  of  the 
pi'ofits  as  his  compensation.^  Ho  where  a  broker  or  factor  is  paid 
by  a  proportion  of  the  profits  of  sale  he  is  not  a  partner.^  So  it 
is  generally  held  that  sailors,  who  receive  in  lieu  of  wages  a 
certjrin  share  of  the  profits  of  a  voyage,  are  not  thereby  made 
partners  with  the  other  participators  in  the  })rofits.3     But  where 

1  Wilkinson  v.  Frasier,  4  Esp.  182  ;  Mair  v.  Glennic,  4  M.  &  S.  240  ;  Gpddes  v. 
Wallace,  2  Bligh,  270  ;  Stocker  v.  Brocklebaiik,  3  MuN.  &  G.  250  ;  Walker  v.  Hirsrh, 
27  Cli.  D.  460  ;  Berthold  v.  Goldsmith,  24  How.  536  ;  Hazard  v.  Hazard,  1  Story,  371  ; 
Moore  v.  Smith,  19  Ala,  774  ;  Tayloe  v.  Bush,  75  Ala.  432  ;  Olmstead  v.  Hill,  2  Ark. 
346  ;  Haycock  v.  VVillianis,  54  Ark.  334  ;  Le  Fevre  v.  (Jastagnio,  5  Col.  564  ;  Pond  v. 
CuMimiiis,  50  Conn.  372  ;  Stevens  v.  Faucet,  24  HI.  483  ;  Fawcett  v.  Osborn,  32  III. 
411  ;  Macy  «.  Combs,  15  lad.  469  ;  Holbrook  o.  O'B^^rne  (la.),  9  N.  W.  291  ;  Chairraix 
V.  Price,  29  La.  Ann.  176  ;  Miller  v.  Chandler,  29  La.  Ann.  88  ;  Allen  v.  Dunn,  15 
Me.  292;  Braley  v.  (Joddard,  49  Me.  115  ;  Bull  v.  Schuberth,  2  Md.  38  ;  Keddington 
V.  Lanahan,  59  Md.  429  ;  Baxter  v.  lljdnian,  3  Pick.  435  ;  Blanchard  v.  Coolidge,  22 
Pick.  151  ;  Partridge  v.  Kingman,  130  Mass.  476  ;  Hamper's  Appeal,  51  Mich.  71, 
16  N.  W.  236  ;  Gill  v.  Ferris,  82  Mo.  156  ;  Newnian  v.  Bean,  21  N.  H.  93  ;  Atherton 
V.  Tilton,  44  N.  H.  452  ;  Nutting  v.  Colt,  7  N.  J.  E(i.  (3  Halsted)  539  ;  Smith  v. 
Perry,  29  N.  J.  L.  (5  Dutcher)  74  ;  Chase  v.  Barrett,  4  Paige,  148;  Vanderbui'gh  v. 
Hull,  20  Wend.  70  ;  Barckle  v.  Eckart,  1  Den.  337,  3  N.  Y.  132  ;  Lewis  v.  Greider, 
51  N.  Y.  231;  Conklin  v.  Barton,  43  Barb.  435;  Ross  v.  Drinker,  2  Hall,  415; 
Ogden  V.  Astor,  4  Sandf.  311  ;  Motley  v.  Jones,  3  Ired.  E(i.  144  ;  McArthur  v.  Ladd, 

5  Ohio  514  ;  Miller  v.  Bartlet,  15  S.  &  R.'  137  ;  Potter  v.  Moses,  1  R.  L  430  ; 
Lowry  v.  Brooks,  2  McCord,  421  ;  Norment  v.  Hull,  1  Hunii.h.  320  ;  Goode  v.  McCart- 
ney, 10  Tex.  193  ;  Cothran  v.  Marmaduke,  60  Tex.  370  ;  Buzard  v.  First  Nat.  Bank, 
67  Tex.  83,  2  S.  W.  54  ;  Missouri  Pac.  Ry.  v.  Johnson  (Tex.),  7  S.  W.  838  ;  Brown  v. 
Watson,  72  Tex.  216,  10  S.  W.  395  ;  Wilkinson  v.  Jett,  7  Leigh,  115  ;  Kellogg  v. 
Griswold,  12  Vt.  291;  Stearns  v.  Haven,  16  Vt.  87  ;  Mason  v.  Potter,  26  Vt.  722; 
Clark  V.  Smith,  52  Vt.  529  ;  Sodiker  v.  Applegate,  24  W.  Va.  411  ;  Whitney  v.  Lud- 
ington,  17  Wis.  140  ;  Nicholaus  v.  Thielge.s,  50  Wis.  491,  7  N.  W.  341  ;  La  Flex  v. 
Burss,  77  Wis.  538,  46  N.  W.  801.     Thus,  in  Muzzy  v.  Whitney,  10  Johns.  226,  A. 

6  B.  had  agreed  with  a  turnpike  cori)oration  to  build  and  complete  a  certain  road. 
They  afterwards  contracted  with  C.  "to  let  him  have  a  share  of  the  profits,  if  any,  in 
making  the  second  ten  miles  bf  the  road,  in  proportion  to  the  help  he  afforded  in  com- 
pleting the  same,  the  one  half  of  it  to  be  taken  from  A.'s  part,  and  the  other  from  B.'s 
jtart."  It  was  held  that  this  agreement  constituted  no  partnership  between  the  ]iai'ties, 
Init  only  ap[)eared  to  be  a  mode  of  paying  C.  for  his  help  and  labor.  In  Rawlinson  v. 
Clarke,  15  M.  &  W.  292,  A.,  a  surgeon  and  apothecarj',  sold  out  his  business  to  B.,  and 
further  agreed  to  employ  him.self  for  a  year  in  transferring  his  business  to  B.,  —  in  con- 
sideration whereof  B.  agreed  to  give  A.,  during  the  year,  a  moiety  of  the  clear  profits  of 
the  trade.  It  was  held  that  by  this  agreement  A.  &  B.  were  not  made  partners  ;  and 
that,  upon  a  view  of  the  whole  deed,  it  would  bear  no  other  construction  than  that  A. 
was  to  receive  nothing  more  than  a  salary  for  the  services  he  was  Vo  afford  to  B.,  in 
helping  him  to  continue  the  business.     See  Salter  v.  Ham,  31  N.  Y.  321. 

-  Benjamin  v.  Porteus,  2  H.  Bl.  590;  Dixon  v.  Cooper,  3  Wils.  40  ;  Gibbons  v. 
Wilcox,  2  Stark.  43  ;  Hesketh  v.  Blanchard,  4  East  144  ;  Smith  v.  Watson,  2  B.  &  C. 
401. 

2  Wilkinson  v.  Frasier,  4  Esp.  182  ;  Perrott  v.  Bryant,  2  Y.  &  Coll.  61  (explaining 
Coppard  V.  Page,  Forrest,  1)  ;  Mair  v.  Glennie,  4  J\I.  &  S.  240.  Duryee  v.  Elkins,  1 
Abb.  Adm.  529;    Reed  v.  Hussey,  Bl.  &   H.  525;    Brown  v.  Hicks,    24  F.    R.   811; 


§  70.]  WHO    ARE   PARTNERS.  61 

one  agreed  to  enter  into  a  business,  advance  a  certain  sum  of 
money,  and  take  general  charge  of  the  business,  and  was  to 
receive  as  compensation  a  fixed  sum  weelvly  and  such  proportion 
of  the  net  profits  as  the  sum  he  advanced  bore  to  the  wliole  capi- 
tal, it  was  held  that  he  became  connected  with  the  business,  and 
was  a  partner.! 

§  70.  Creditor.  —  Where  one  lends  money  to  be  used  in  business, 
receiving  a  part  of  the  profits  of  the  business  in  lieu  of  or  in 
addition  to  interest  on  the  loan,  taking  however  no  part  in  the 
conduct  of  the  business,  he  is  not  a  partner.^  But  in  order  that  it 
should  be  a  loan,  and  not  capital  of  a  partnership,  it  must  be 
clear  that  the  money  is  to  be  repaid  at  all  events  whether  the 
business  is  successful  or  not.^  It  must  also  be  clear  that  the  par- 
tics  do  not  contemplate  the  formation  of  an  entity  which  is  in 
fact  a  partnership,  of  which  the  lender  shall  be  a  member.  Thus 
in  Pooley  v.  Driver,*  where  the  agreement  provided  that  the  money 
lent  should  be  emi)l()yed  in  the  business,  and  should  not  be  drawn 
out  during  the  continuance  of  the  partnei'ship  which  carried  it  on, 
and  sliould  be  paid  back  six  months  after  the  end  of  the  partner- 
ship, and  that  the  lender  should  receive  an  amount  of  profits 
based  on  the  proportion  of  the  loan  to  the  whole  amount  invested 
in  the  business,  the  agreement  was  held  to  create  a  partnership. 
In  such  a  case  the  advance  is  really  made  to  the  firm,  not  to  the 
other  partner  personally.^     It  would  seem,  however,  that  the  part- 

CofSn  V.  Jenkins,  3  Story,  108;  The  Crusadfr,  1  "Ware,  437  ;  Eice  v.  Austin,  17  Mass. 
197  ;  Baxter  v.  Rodman,  3  Pick.  435  ;  Grozier  v.  Atwood,  4  Pick.  234. 

So,  in  Bishop  v.  Shepherd,  '23  Pick.  492,  494,  the  court  said:  "It  has  often  been 
held  that  upon  these  wlialing  voj'ages,  carried  on  under  a  shipping-paper  and 
form  of  contract  like  that  exhibited  in  the  present  case,  although  the  officers  and 
seamen  respectively  are  to  receive  a  share  of  the  proceeds  of  the  oil  and  other  acquisi- 
tions of  the  ship  as  their  only  compensation,  yet  they  are  not  partners  or  part- 
owners  of  the  oil  with  the  owners  of  the  ship  ;  but,  on  the  contrary,  the  oil,  heprre 
division,  is  the  property  of  the  owners.  The  oil,  in  the  first  instance,  being  the 
property  of  the  owners,  it  remains  theirs  until  some  settlement  or  adjustment." 

1  Fougner  v.  First  Nat.  Bank,  (111.)  30  X.  E.  442. 

2  BuUen  v.  Sharp,  L.  R.  1  C.  P.  86  ;  Ex  jmrtc  Tennant,  6  Ch.  D.  303  ;  Meehan  v. 
Valentine,  145  U.  S.  611  ;  Williams  v.  Fletcher,  129  111.  356,  21  N.  E.  783;  Clark 
V.  Barnes,  72  la.  563,  34  N.  W.  419  ;  Sheridan  v.  Medara,  10  N.  J.  Eq.  (2  Stoct.) 
469  ;  Richardson  v.  Hughitt,  76  N.  Y.  55  ;  Eager  v.  Crawford,  76  N.  Y.  97  ;  Curry 
V.  Fowler,  87  N.  Y.  33  ;  Cassidy  v.  Hall,  97  N".  Y.  159  ;  Harvey  v.  Childs,  28  Oh.  St. 
319  ;  Hart  v.  Kelley,  83  Pa.  286  ;  Boston  &  Colorado  Smelting  Co.  v.  Smith,  13  R.  I. 
27.  In  Drake  v.  Ramey,  3  Rich.  37,  where  the  profits  of  a  partner  were  by  agree- 
ment paid  to  his  individual  creditor,  the  latter  was  not  a  partner. 

But  see  contra  Parker  v.  Canfield,  37  Conn.  250 ;  Conkling  v.  Washington  Cniver- 
sity,  2  Md.  Ch.  497  ;  Bailey  v.  Clark,  6  Pick.  372  [scmUe). 

3  Eager  v.  Crawford,  76  N.  Y.  97. 
*  5  Ch.  D.  458. 

ij  See  Magovern  v.  Robertson,  116  N.  Y.  61,  22  N.  E.  398  ;  Southern  Fertilizer  Co. 


62 


THE   LAW   OF   PARTNERSHIP, 


[CH.    V. 


nership  relation  is  not  established  where  there  is  a  mere  loan  of 
money,  unless  the  lender  gets  a  right  to  exercise  some  control 
over  the  business.^ 

If  money  be  lent  to  a  firm  for  more  than  legal  interest,  this 
would  be  a  usurious  loan,  (a;)  but  would  not  make  the  lender  a 
partner. 

§  71.  Lessor.  — Where  the  owner  of  property  leases  it  for  busi- 
ness purposes,  agreeing  to  receive  in  return  a  proportion  of  the 
profits  of  the  business,  he  receives  the  amount  merely  as  rent, 
and  is  not  a  partner  in  the  business.^ 

So  where  one  party  took  cattle  of  the  other  party  to  fatten,  and 


(x)  Gestons  v.  Brooke,  Cowp.  793  ; 
Parker  v.  Rauisbottoui,  3  B.  &  C.  257. 
When  the  principal  is  at  liazard,  there  can 
be  no  usury.  Accordingly,  in  Morse  v. 
Wilson,  4  T.  R.  353,  where  the  lender  of 
money  was  to  receive  a  share  of  the  profits 
of  a  trade  in  addition  to  legal  interest,  and 
to  he  liable  to  no  losses,  it  was  contended  in 
his  behalf  that  the  contract  was  not  usuri- 
ous, inasmuch  as,  by  sharing  in  the  profits, 
he  was  liable  to  creditors  for  all  the  partner- 
ship debts,  and  thus  his  princijial  was  in 
hazard.  But  Lord  Kenyon,  C.  J.,  said  : 
"Nothing  can  be  clearer  than  this  case. 
The  plaintiff,  without  having  any  part- 
nership in  contemplation,  lent  2,000/.  to 
H.  W^ilson,  for  which  he  was  to  receive, 
not  only  51.  per  cent  interest,  but  also 
such  surplus  profits  as  should  arise  from 
these  two  shares  in  the  business,  he  him- 
self not  being  bound,  on  the  other  hand, 
to  make  good  to  the  partners  any  part  of 
the  losses  whicli  the  trade  might  sustain. 
The  sinij)le  cpiestion  is.  Why,  then,  this 
is  not  an  agreement  to  receive  more  than 
the  51.  per  cent  allowed  by  law  for  the 
forbearance  of  a  loan  ?  Most  unquestion- 
ably it  is ;  and  it  is  therefore  void.  It 
has  been  argued,  however,  that  this  was 
not    an    usurious    contract,    because    the 


principal  was  put  in  hazard,  as  it  was 
liable  to  the  partnership  creditors  :  but 
it  was  no  farther  hazarded  than  in  the 
case  of  every  other  loan,  namely,  by  the 
risk  of  the  borrower's  insolvency  ;  for,  as 
between  the  plaintiff  and  the  partners  in 
the  business,  he  was  not  liable  to  contrib- 
ute to  the  losses  in  the  trade."  Buller, 
J. :  "  In  this  agreement  provision  is  made 
to  receive  the  profits,  but  none  to  engage 
for  the  losses,  of  the  trade.  And,  there- 
fore, it  is  not  true  that  the  plaintiff's  piin- 
cipal  was  at  stake ;  since,  by  the  terms  of 
the  contract,  the  trade  is  to  be  carried  on 
by  the  other  partners,  and  the  plaintiff  is 
only  liable  to  make  good  the  losses  of  the 
trade  in  the  event  of  the  insolvency  of 
the  other  partners.  But,  as  between  tliese 
parties,  if  there  be  any  losses,  they  must 
be  borne  by  the  defendant  and  the  other 
partner ;  and,  if  there  be  any  profit,  the 
])laintiff  is  to  receive  his  proportion  of  it." 
On  the  other  hand,  in  Morisset  v.  King, 
2  Burr.  891,  a  stipulation  between  the 
parties,  by  which  the  person  advancing 
money  to  a  trader  was  to  be  liable  for  a 
moiety  of  the  losses  by  the  trade,  seems 
to  have  determined  the  court  in  holding 
the  transaction  not  to  be  usurious. 


V.  Reams,  105  N.  C.  283,  11  S.  E.  467  ;   Rosenfield  v.  Haight,  53  Wis.  260,  10  N. 
W.  378. 

1  Clark  V.  Barnes,  72  la.  563,  34  N.  W.  419. 

2  Parker  v.  Fergus,  43  111.  437  ;  Holmes  v.  Old  Colony  R.  R.,  5  Gray  58  ;  Thayer 
V.  Augustine,  55  Mich.  187,  20  N.  W.  898  ;  Reed  v.  Murphy,  2  Greene  (la.),  574  ;  John- 
son V.  Miller,  16  Ohio,  431  ;  England  v.  England,  1  Baxt.  108  ;  Felton  v.  Deall,  22  Vt. 
170  ;   Bowyer  v.  Anderson,  2  Leigh,  550  ;  Chapline  v.  Conant,  3  W.  Va.  507. 

Contra,  Dalton  City  Co.  v.  Hawes,  37  Ga.  115  ;  Powell  v.  Moore,  79  Ga.  524,  4  S.  E. 
383  ;  and  see  Oppenheimer  i;.  Cleramons,  18  F.  R.  886. 


§71.] 


WHO    ARE   PARTNERS. 


63 


his  compensation  was  fixed  at  half  the  net  proceeds  over  the 
agreed  value  of  the  cattle,  this  did  not  create  a  partnership 
between  them.^ 

So  where  an  owner  of  a  farm  lets  it  on  half  profits,  the  landlord 
and  tenant  certainly  are  not  partners  ;  (?/)  for  if  we  suppose  tlie  ten- 
ant should  go  into  great  ex})ense  for  some  new  mode  of  cultivation, 
and  become  insolvent,  no  one  would  thinly  of  calling  on  the  land- 
lord as  liable  on  the  tenant's  contracts.  So,  in  the  very  comliion 
case  of  shipments  on  half  profits,  it  is  never  supposed  that  such 
a  shipment  makes  a  partnership  between  the  shipper  and  ship- 
owner ;  (z)   and  the  same  principle  has  been  applied  where  one 


(y)  Perrine  y.  Hankinson,  6  Halst.  181. 
Here,  the  profits  of  a  tavern,  as  well  as  of 
a  farm,  were  to  V)e  divided.  Putnam  v. 
"Wise,  1  Hill,  234  ;  Blue  v.  Leathers,  15 
111.  31  ;  Chase  v.  Barrett,  4  Paige,  148. 
The  lease  of  a  ferry  has  been  considered 
analogous  to  a  fanning  lease,  and  a  stipu- 
lation by  which  tlie  lessee  thereof  was  to 
divide  with  the  lessor  all  the  profits  above 
a  certain  amount  was  held  not  to  make  the 
lessor  and  lessee  liable  as  partners.  Bow- 
yer  v.  Anderson,  2  Leigh,  550.  So,  when 
coal  mines  were  leased.  Heckert  v.  Fegely> 
6  W.  &  S.  139,  143.  In  Tibbatts  v. 
Tibbatts,  6  McLean,  80,  John  W.  Tibbatts, 
and  Ann  Tibbatts,  his  wife,  leased  unto 
Leo  Tibbatts  a  stock  farm  under  covenants 
and  conditions  substantially  as  follows  : 
The  said  Leo  to  pay  no  rents  during  the 
term  of  the  lease,  and  to  manage  and  con- 
duct tlie  business  of  the  farm  in  accordance 
with  his  own  judgment  ;  the  stock  and 
farming  utensils  on  the  farm  at  the  time 
of  the  lease  to  be  fairly  valued,  and  at  the 
end  tlicreof  to  be  accounted  back  in  equal 
value  ;  Leo  to  have  one-third,  and  John 
"W.  Tibbatts  and  wife  two-thirds,  of  the 
net  profits  to  accrue  by  the  same,  and  cur- 
rent expenses  to  be  paid  out  of  the  general 
stock  funds  of  the  concern.  The  real  estate 
ta.x  was  to  be  paid  by  John  W.  Tibbatts, 
and  six  per  cent,  interest  to  be  allowed  on 
all  advances  made  by  either  of  the  parties. 
Leo  was  to  keep  regular  accounts  of  the 
business  of  the  farm,  subject  at  all  times 
to  the  inspection  of  John  W.  Tibbatts 
and  wife  ;  and,  in  case  of  Leo  Tibbatts's 
death  during  the  term  of  the  lease,  peace- 


able possession  was  to  be  given  to  John  W, 
Tibbatts  and  wife.  Tlie  court  held,  that 
"  looking  at  the  nature  of  the, above  con- 
tract, aud  the  language  used  by  the  parties, 
there  was  less  difficulty  in  considering  it  a 
partnership  agieement,  than  a  mere  lease 
for  the  term  specified,  paying  rent."  See 
also  Rrownlee  v.  Allen,  21  Mo,  123  ;  Allen 
i;.  Davis,  13  Ark.  28. 

(z)  Hice  V.  Austin,  17  Mass.  205,  206. 
So  a  contract  by  which  the  owner  of  a 
vessel  lets  her  in  consideration  of  a  share 
of  her  earnings,  or  of  the  proceeds  of  the 
adventure,  does  not  make  the  ship-owner 
and  the  charterer  partners.  Reynolds  v. 
Toppan,  15  Mass.  370  ;  Taggard  v.  Loring, 
16  Mass.  336  ;  Thompson  v.  Snow,  4  Me. 
264  :  Winsor  v.  Cutts,  7  Me.  261  ;  Cutler 
V.  Winsor,  6  Pick.  335.  See  Cox  v. 
Delano,  3  Dev.  89.  Li  French  v.  Price, 
24  Pick.  13,  the  defendants  were  sub- 
scribers of  a  contiact  by  which  they  agreed 
to  become  interested  in  a  voyage  and  ad- 
venture, in  certain  definite  ])roportions. 
They  also,  by  the  same  instrument,  ap- 
pointed two  of  their  number  to  manage 
the  business  abroad,  who  were  to  receive  a 
commission  and  monthly  wages  as  com- 
pensation for  their  services,  and  two  others 
to  manage  the  business  in  this  country, 
purchase  a  suitable  cargo,  &c.,  and  to  be 
allowed  to  charge  two  and  a  half  per  cent, 
on  the  amount  of  invoice  and  profits,  and 
the  same  on  all  returns,  but  no  commission 
for  purchase  or  sale  of  vessel.  They  there- 
by also  ratified  the  purchase  of  a  vessel, 
which  had  been  made  by  the  home  agents. 
Upon  the  (juestion  whether  this  agreement 


1  Wish  V.  Small,  1  Camp.  331  ;  Beckwith  v.  Talbot,  2  Col.  639,  95  U.  S.  289. 


64 


THE   LAW   OF   PARTNERSHIP. 


[CH.   V. 


advanced  money  to  buy  troous,  and  consigned  them,  to  be  repaid 
out  of  the  goods,  and  to  have  a  part  of  the  net  profits,  (a) 

§  72.  Annuitant.  — A  person  may  be  in  receipt  of  a  sum  from 
the  profits  of  a  partnership,  without  being  chargeable  as  a  partner, 
when  one  is  entitled  to  an  annuity  from  the  firm.  This  happens 
most  frequently  in  the  case  of  a  retiring  partner,  who  as  a  part  of 
his  several  jjroperty,  or  instead  of  some  portion  of  his  share  in 
the  partnership  property  which  he  leaves  behind,  is  to  receive  an 
annuity  for  life,  or  for  a  certain  number  of  years.  This  may 
occur  also  by  the  bequest  of  a  deceased  partner,  who  leaves  his 
funds  or  a  part  of  them  in  the  firm,  and  gives  an  annuity  to  his 
widow  or  some  other  person  out  of  the  profits.  It  is  agreed  that 
if  this  annuity  be  certain,  and  in  no  way  dependent  on  the  amount 
of  the  profits,  although  payable  out  of  them,  then  the  annuitant  is 
not  a  partner,  {b)  According  to  the  case  of  Waugh  v.  Carver,  an 
annuity  which  took  the  form  of  a  share  of  the  profits  would  make 


made  the  signers  thereof  partners,  Morton, 
J.,  said  :  "  Similar  transactions  and  enter- 
prises are  very  common  in  our  country  ; 
and  I  believe,  among  merchants,  never  are 
considered  or  treated  as  partnerships. 
Many  cases  occur  in  which  it  may  be 
extremely  difficult  to  determine  whether 
the  joint-owners  of  pioperty  hold  it  as 
partners  or  as  tenants  in  common.  The 
case  at  bar  may  be  one  of  them.  But 
although  the  connection  between  the 
owners  of  the  plant  and  cargo  certainly 
£ontams  many  of  the  ingredients  and  pro- 
perties of  a  partnership,  yet,  si)eaking  for 
myself,  I  must  say  that  in  my  o])inion  it 
does  not  come  up  to  that  relation.  The 
case  of  Thorndike  v.  De  Wolf  &  Tr.,  6 
Pick.  121,  bears  some  resemblance  to  this  ; 
and  that  of  Jackson  v.  Eobinson,  3  Mason, 
138,  seems  to  me  decisive." 

(a)  In  Rice  v.  Austin,  17  Mass.  197, 
Putnam,  J.,  said  :  "  So  in  the  case  of 
shipments  to  India  upon  half- profits,  so 
generally  practised  in  this  country  :  it 
would  hardly  be  contended  that  the 
numerous  freighters,  often  unknown  to 
each  other,  have  by  such  shipments  be- 
come answerable  for  each  other,  or  in  any 
way  interested  as  partners  with  the  ship- 
owner, in  respect  to  the  dollars,  which 
constitute  the  adventures,  and  which  he 
undertook  to  carry  to  India  for  half  the 
profits.  .    .    .    The   resemblance   between 


the  cases  now  mentioned  and  the  case  at 
bar  is  veiy  strong.  The  plaintiff  advanced 
his  funds  to  be  invested  by  Lindsay  in  live 
oak  in  Florida,  to  be  procured,  cut,  and 
transported,  at  the  expense  of  l^indsay,  but 
on  the  account  and  risk  of  the  plaintiff,  to 
the  navy-yards  of  the  United  States  ;  and 
for  the  services  and  disbursements  of 
Lindsay,  he  was  to  have  half  the  profits, 
as  the  owners  of  the  freighting  ships  to 
India  are  compensated  for  their  services 
and  disbursements  ;  and  the  plaintiff,  for 
his  risks  and  advances,  was  to  have  his 
principal  sum  repaid,  and  the  residue  of 
the  profits.  But  it  has  never  been  thought 
that  the  return  cargo  was  liable  for  the 
debts  of  the   ship-owner." 

(b)  See  Young  v.  Axtell,  2  H.  Bl.  243. 
In  Waugh  v.  Carver,  2  H.  Bl.  235,  Lord 
C.  J.  Eyre  says :  "  This  case  lias  been 
extremely  well  ai'gued,  and  the  discussion 
of  it  has  enabled  me  to  make  up  my  mind, 
and  removed  the  only  difficulty  I  felt, 
which  was.  Whether  by  construing  this  to 
be  a  ])artnership,  we  should  not  determine 
that  if  there  was  an  annuity  granted  out 
of  a  banking-house  to  the  widow,  for 
instance,  of  a  deceased  partner,  it  would 
make  her  liable  for  the  debts  of  the  house, 
and  involve  her  in  a  bankrujitcy  ?  But 
I  think  this  case  will  not  lead  to  that 
conclusion," 


§  75.]  WHO    ARE    PARTNERS.  65 

the  annuitant  a  partner. ^  But  according  to  the  better  doctrine,  if 
the  proportional  part  of  the  profits  is  received  by  one  who  is  simply 
an  annuitant,  this  does  not  make  him  a  partner.^ 

§  73.  Assignee  for  Benefit  of  Creditors.  —  If  two  or  more 
creditors  take  an  assignment  of  their  debtor's  stock  in  trade,  and 
agree  together  and  with  him  to  carry  on  the  business  under  the 
management  of  the  debtor  liimself  or  of  a  creditor  and  apply  the 
profits  to  the  payment  of  their  debts  due  them,  this  does  not  of 
itself  make  them  partners    in  the  business.^ 

§  74.  Executor.  —  When  an  executor  of  a  partner,  by  reason  of 
directions  in  tiie  will  or  otherwise,  takes  part  with  the  surviving 
partners  in  carrying  on  the  business,  he  becomes  a  partner.*  But 
if  he  merely  leaves  the  interest  of  the  testator  in  the  business, 
receiving  a  share  of  the  profits  but  taking  no  part  in  the  business, 
he  is  not  a  partner.^ 

§  75.  Association  of  Carriers.  —  A  traffic  arrangement  between 
carriers,  by  which  a  through  line  is  established  and  a  through  rate 
agreed  upon,  to  be  divided  m  certain  proportions,  does  not  create 
a  partnership.^  This  is  clear,  for  there  was  no  intention  to  create 
a  new  body  to  operate  the  through  line  ;  each  carrier  was  to 
operate  his  own  line.     But  if  the  carriers  intend  to  create  a  new 

^  III  re  Colbeck,  Buck,  48  ;  Ex  parte  Wheeler,  Buck,  25  ;  Ex  parte  Chuck,  8  Bing. 
469.     See  opinion  of  Master  of  Rolls,  In  re  Stanton  Iron  Co.,  21  Beav.  164. 

2  Jones  V.  Walker,  103  U.  S.  444. 

8  Cox  V.  Hickman,  8  H.  L.  C.  268  ;  Re  English  Society,  1  H.  &  M.  85  ;  Holme  v. 
Hammond,  L.  R.  7  Ex.  218  ;  Davis  v.  Patrick,  122  U.  S.  138  ;  Pettis  t>.  Atkin.s,  60111. 
454  ;  Purvis  v.  Butler,  87  Mich.  248,  49  N.  W^  564  ,  Brundred  v.  Muzzy,  1  Dutch.  268  ; 
U.  S.  Ins.  Co.  i;.  Scott,  1  Johns.  106  ;  Righter  v.  Farrel,  134  Pa.  482,  19  Atl.  687. 
But  see  Owen  i'.  Bod}',  5  A.  &  E.  28  ;  Taylor  v.  Herring,  10  Bosw.  447.  Compare 
Cavanaugh  v.  Riley,  (Ky.)  19  S.  W'.  745. 

*  Mattison  i-.  Farnham,  44  Minn.  95,  46  N.  W^.  347  ;  Citizens'  Mut.  Ins.  Co.  v. 
Ligon,  59  Miss.  305  ;  Wihl  v.  Davenport,  48  X.  J.  129,  7  Atl.  295  ;  Willis  v.  Sharp, 
113  N.  Y.  586,  21  X.  E.  705. 

5  Holme  V.  Hammond,  L.  R.  7  Ex.  218  ;  Owens  v.  Mackall,  33  Md.  382  ;  Phillips 
V.  Blatchford,  137  Mass.  510  ;  Avery  v.  Myers,  60  Miss.  367  ;  Wild  v.  Davenport,  48 
N.  J.  L.  129,  7  Atl.  295  ;  Richter  v.  Poppenhausen,  42  N.  Y.  373 ;  Willis  v.  Sharp, 
113  N.  Y.  586,  21  N.  E.  705. 

Before  the  case  of  Cox  v.  Hickman  the  English  decisions  held  the  executor  liable 
as  partner,  since  he  received  a  share  of  the  profits.  Wightman  v.  Townroe,  1  M.  k  S. 
412  ;  Ex  parte  Garland,  10  Ves.  110  ;  Ex  parte  Holdsworth,  1  Mont.  D.  &  D.  475. 

8  Insurance  Co.  v.  Railroad,  104  U.  S.  146;  Citizens'  Ins.  Co.  v.  Kountz  Line,  4 
Woods,  268  ;  Montgomery  &  E.  Ry.  v.  Culver,  75  Ala.  587  ;  Hot  Springs  R.  R.  v. 
Trippe,  42  Ark.  465  ;  Converse  v.  Norwich  &  X.  Y.  Tr.  Co.,  33  Conn.  166  ;  Irvin  v. 
Nashville,  C.  &  S.  L.  Ry.,  92  111.  103  ;  Atchison,  T.  &  S.  F.  R.  R.  v.  Roach,  35  Kas. 
740,  12  Pac.  93  ;  Darling  v.  Boston  &  C.  R.  R.,  11  All.  295  ;  Gass  v.  N.  Y.  P.  k  B.  R. 
R.,  99  Mass.  220  ;  Wetmore  v.  Baker,  9  Johns.  307  ;  Merrick  v.  Gordon,  20  N.  Y. 
93.  But  see  Cincinnati,  H.  &  D.  R.  R.  v.  Spratt,  2  Duv.  4  ;  Barter  v.  Wheeler,  49 
N.  H.  9. 

5 


66  THE   LAW   OP   PARTNEKSHIP.  [CH.    V. 

body  to  operate  the  line,  they  become  partners.  Thus  where  the 
owners  of  several  steamboats  united  to  establish  a  line  of  steam- 
boats and  divide  the  profits,  they  were  held  partners,  thouuli  cacli 
owner  retained  the  title  and  control  of  his  own  boat.^  But  if  in 
such  cases  the  carriers  do  not  own  the  profits  resultinir  fi-om  the 
whole  road,  as  a  common  fund  out  of  which  each  is  entitled  to 
draw  a  certain  share,  but  each  one  of  them  receives  only  those 
profits  and  bears  only  those  losses  which  accrue  from  his  own 
particular  piece  of  road,  there  is  now  no  such  community  of 
interest  between  them  as  to  make  them  partners,^  even  though  the 
carrier  making  the  most  profit  divides  the  excess.^  The  carriers 
in  such  cases  may  however  be  jointly  liable,  not  by  reason  of  a 
partnership,  but  because  the  agent  for  whose  act  suit  was  brought 
acted  for  them  jointly.* 

§  76.  Ownership  in  Common.  —  Partnership  must  be  distin- 
guished from  the  joint  management  of  property  owned  in  common. 
Where  two  parties  own  a  chattel  and  make  a  profit  by  the  use  of 
it,  they  are  not  partners  without  some  special  agreement  which 
makes  them  so.  Thus  the  joint  owners  of  vessels  are  not  part- 
ners in  the  management  of  the  vessels,^  unless  they  form  a  special 
partnership  association.^ 

So  where  two  men  agreed  to  share  the  expense  of  getting  a 
patent,  and  to  be  "  equal  partners  "  in  all  losses  and  expenses,  and 
in  gains  and  profits  it  was  held  not  to  constitute  a  partnership.'^ 

1  Waland  v.  Elkiiis,  1  Staik.  272  ;  Bowas  v.  Pioneer  Tow  Line,  2  Sawy.  21 ; 
Meaher  v.  Cox,  37  Ala.  201  ;  Connolly  v.  Davidson,  15  Minn.  519  ;  Chanijiion  v. 
Bostwick,  18  Wend.  175. 

2  Ellsworth  V.  Tartt,  26  Ala.  733  ;  Mohawk  &  Hudson  R.  R.  Co.  v.  Niles,  3  Hill, 
162  ;  Briggs  v.  Vanderbilt,  19  Barb.  222 ;  Bousteel  v.  Vanderbilt,  21  Barb.  26  ; 
Pattison  v.  Blanchard,  5  N.  Y.  186. 

3  Fay  V.  Davidson,  13  Minn.  523. 

*  Cobb  V.  Abbot,  14  Pick.  289. 

*  Watson  on  Part.  5,  6  ;  Ersk.  Inst.  b.  3,  tit.  3,  §  18  ;  2  Bell  Comm.  655  (5th 
ed.);  Ex  parte  Young,  2  V.  &  B.  242  (overruling  Doddington  v.  Hallet,  1  Ves.  Sr.  497); 
Ex  parte  Harrison,  2  Rose,  76;  Green  v.  Briggs,  6  Hare,  395  ;  Jackson  v.  Robinson,  3 
Mas.  138 ;  The  Daniel  Kaine,  35  F.  R.  785  ;  Patterson  v.  Chalmers,  7  B.  Mon.  595  ; 
Harding  v.  Foxcroft,  6  Me.  76  ;  Knowlton  v.  Reed,  38  Me.  246  :  Lamb  v.  Durant, 
12  Mass.  54  ;  Thorndike  v.  De  Wolf,  6  Pick.  120  ;  French  v.  Price,  24  Pick.  13,  18, 
19  ;  Runnels  v.  Moffat,  73  Mich.  188,  41  N.  W.  224  ;  Ward  v.  Bodeman,  1  Mo. 
App.  272;  Porter  v.  McClure,  15  Wend.  187  ;  Knox  v.  Campbell,  1  Barr,  366  ;  Hop- 
kins V.  Forsyth,  14  Pa.  34  ;  Adams  v.  Carroll,  85  Pa.  209. 

6  Holderness  v.  Shackels,  8  B.  &  C.  612,  618  ;  Macy  v.  De  Wolf,  3  W.  &  M.  193  ; 
Hendy  v.  March,  75  Cal.  566,  17  Pac.  702  ;  Hewitt  i;.  Sturdevant,  4  B.  Mon.  453  ; 
Patterson  v.  Chalmers,  7  B.  Mon.  595  ;  Hardy  v.  Sproule,  29  Me.  258  ;  Gardner 
I'.  Cleveland,  9  Pick.  334  ;  Bulfinch  v.  Winchenbach,  3  All.  161  ;  Hinton  v.  Law,  10 
Mo.  701  ;  Mumford  v.  Nicoll,  20  Johns.  611  (reversing  Kicoll  v.  Mumford,  4  Johns. 
Ch.  522)  ;  King  v.  Lowry,  20  Barb.  532.     See  Merritt  v.  Walsh,  32  N.  Y.  685. 

7  Fraser  v.  Gates,  118  III.  99,  1  N.  E.  817. 


§  77.]  WHO    ARE    PARTNERS.  67 

But  it  is  possible  to  form  a  partnership  association,  of  wliich  the 
contemplated  patent  shall  constitute  the  capital.^  In  the  same 
way  joint  owners  of  a  patent  are  not  necessarily  partners,  though 
they  may  by  agreement  become  so.^  In  French  v.  Styring  ^  two 
joint  owners  of  a  race-horse  had  entered  into  an  arrangement 
by  whicli  one  of  them  had  the  entire  management  of  the  horse,  and 
paid  in  advance  all  the  expenses  of  keeping,  training,  &c.  Tlie  other 
co-owner  was  to  pay  a  moiety  of  these  expenses,  and  to  share  equally 
in  the  earnings.  One  of  tlie  questions  raised  in  the  case  was, 
whether  that  agreement  constituted  a  partnership.  On  this  ques- 
tion the  court  was  divided  ;  but  since  they  allowed  the  plaintiff  to 
recover,  the  necessary  result  of  the  case  would  seem  to  be  that  no 
partnership  existed.     This  is  without  doubt  the  true  view. 

§  77.  Joint  Legatees.  —  Where  property  is  left  to  two  or  more 
persons  by  a  will,  in  such  a  way  that  they  would  take  it  as  joint 
tenants,  or  as  tenants  in  common,  and  they  take  it  as  partners, 
and  continue  to  hold  and  use  it  as  partnership  stock,  their  rights 
to  and  in  the  property,  and  against  each  other  in  relation  to  the 
property,  are  governed  by  the  law  of  partnership,  (c)  To  this  it 
may  be  said,  by  way  of  exception,  that  if  the  will  contained 
distinct  expressions  which  would  give  to  the  property  the  quality 
of  joint-tenancy,  even  when  it  should  be  lield  in  partnership, 
these  words,  in  reference  to  the  legatees,  would  take  effect,  (^d) 

(c)  Jackson  v.  Jackson,  7  Ves.  535.  the  purposes  to  which  the  testator  had 
Same  case  on  appeal,  9  Ves.  591.  In  devoted  his  property,  nor  from  any  other 
this  case,  personal  property,  including  consideration,  gone  the  length  of  provid- 
leaseholds,  property  in  trade,  &c.,  was  ing  that  the  residuary  legatees  should  not 
left  to  A.  &  B.,  as  residuary  legatees.  By  have  any  power  of  destroying  the  original 
both  the  Master  of  the  Rolls,  and  the  joint-tenancy  by  their  acts  and  agreements. 
Lord  Chancellor  on  appeal,  it  was  held,  A.  &  B.  then  possessing  the  power  of  sev- 
that  they  took  it  originally  as  joint-  ering  the  joint-tenancy,  he  held,  that  they 
tenants.  But  the  Master  thought  the  had  exercised  it,  both  as  to  the  capital 
bequest  positive,  and  that  there  were  no  and  the  profits,  by  acting  for  twelve  years 
circumstances  by  which  he  could  be  guid-  as  partners  in  trade  therein  ;  and  that, 
ed  in  giving  to  the  words  of  the  will  any  therefore,  they  were  to  be  considered  as 
other  than  their  literal  import.  Therefore  tenants  in  common  of  the  property  em- 
he  decreed  that,  on  the  death  of  A.,  all  barked  in  trade,  from  the  time  they  were 
the  property  thus  bequeathed,  excepting  let  into  possession.  See  2  Hov.  Supp.  66. 
a  portion  of  the  accrued  profits,  belonged  {d)  As  where  a  testator,  after  making 
to  B.,  the  survivor.  The  Lord  Chancellor,  considerable  pecuniary  and  other  legacies, 
on  the  other  hand,  held,  that  the  will  without  making  any  express  disposition 
had,  neither  from  the  obvious  intention,  of  the  residue  of  his  personal  estate,  con- 

1  Soraerby  v.  Buntin,  118  Mass.  279. 

2  Parkhurst  v.  Kinsman,  1  Blatch.  488  ;  Boeklen  v.  Hardenburgh,  37  N.  Y.  Super. 
110;  Penniman  v.  Munson,  26  Vt.  164. 

8  2  C.  B.  X.  s.  357.     See  also  Hawes  v.  Tillinghast,  1  Gray,  289. 


68  THE    LAW    OP    PARTNERSHIP.  [CH.    V. 

§  78.  Proof  of  Partnership.  —  When  joint  defendants  are  sued 
as  partners,  the  burden  is  on  the  plaintiff  to  prove  them  so.^ 
Partnership  may  be  proved  as  well  by  circumstantial  evidence  as 
by  direct  proof  ;2  but  general  reputation  is  not  evidence  of  part- 
nership,^ or  of  its  dissolution,*  though  if  a  partnership  is  proved, 
general  reputation  is  admissible  to  prove  whether  or  not  a  par- 
ticular partner  is  dormant  or  active,^  and  it  would  seem  that  a 
disinterested  person  may  testify  who  compose  a  firm.^ 

A  member  of  a  firm  may  of  course  testify  who  his  partners 
are;'  though  if  the  agreement  is  proved,  one  party  to  it  cannot 
testify  that  the  other  party  is  his  partner,  since  that  is  a  question 
of  law  rather  than  of  fact.^  So  the  existence  of  a  partnership 
may  be  proved  by  the  separate  admissions  of  all  who  are  sued ; 
or  by  the  acts,  declarations,  and  conduct  of  the  parties ;  or  by  the 
act  of  one,  and  the  declarations  or  conduct  of  others  ;  ^  and  one 
who  admits  that  he  is  partner  in  a  business  may  be  held  liable 
personally,  on  his  admission.^^     But  the  declaration  of  one  who 

stituted  his  two  eldest  sons  his  executors,  appeal,  all  agreed  that  actual  dealing  in 

Though  the  executors  had  carried  on  trade  partnership  with  effects  left  to  two  jointly, 

together  with  a  portion  of  the  residue,  it  with  intent   that  it  should  be  a   dealing 

was,   nevertheless,    held,    that,    upon   the  in    partnership,    though  they  had   taken 

death  of   one  of  them,  the  whole  of  the  under  the  will  as  joint-tenants,  yet  having 

residuum  survived  to  the  other.     Hall  v.  once  begun  to  act  with  the  property  as 

Digby,  4  Bro.  P.  C.  224.     In  9  Ves.  596,  merchants,    would     sever    the    joint-ten- 

the  Lord  Chancellor  thus  states  the  prin-  ancy,  unless  the  will  contains  something 

ciple  upon  which  the  case  was  decided  :  that  would  clothe  the    property,    though 

"In  that  case  Mr.  Fazakerley,  Sir  John  engaged    in     trade,   with    the  quality   of 

Strange,  and  the  other  considerable  per-  joint-tenancy." 
sons   who   signed   the   reasons   upon    the 

1  Eichel  V.  Sawyer,  44  F.  R.  845  ;  Lieb  v.  Craddock,  87  Ky.  525,  9  S.  W.  838  ; 
Hallstead  v.  Coleman,  143  Pa.  352,  22  Atl.  977. 

'  McEvoy  V.  Bock,  37  Minn.  402,  34  N.  W.  740 ;  Rogers  v.  MuiTay,  110  N.  Y. 
658,  18  N.  E.  261. 

3  Metcalf  V.  Officer,  2  F.  R.  640  ;  Marble  v.  Lypes,  82  Ala.  322,  2  So.  701 ;  Tan- 
ner &  Delaney  Engine  Co.  v.  Hall,  86  Ala.  305,  5  So.  584  ;  Campbell  v.  Hastings,  29 
Ark.  512  ;  Bowen  v.  Rutherford,  60  111.  41  ;  Sager  v.  Tupper,  38  Mich.  258  ;  Smith 
V.  Griffith,  3  Hill,  333  ;  Adams  v.  Morrison,  113  N.  Y.  152,  20  N.  E.  829  ;  Wallis  v. 
Wood,  (Tex.)  7  S.  W.  852;  Emberson  v.  McKenna,  (Tex.)  16  S.  W.  419. 

*  Pitcher  v.  Barrows,  17  Pick.  361. 

5  Metcalf  V.  Officer,  2  F.  R.  640. 

6  Hodges  V.  Tarrant,  31  S.  C.  608,  9  S.  E.  1038. 

'  First  Nat.  Bank  of  ^Yausau  v.  Conway,  67  Wis.  210,  30  N.  W.  215. 

8  Alexander  i'.  Handley,  (Ala.)  11  So.  390. 

9  Jennings  v.  Estes,  16  Me.  323;  Welsh  v.  Speakman,  8  W.  &  S.  257  ;  Hanghey  i'. 
Strickler,  2  W.  &  S.  411  ;  Johnston  v.  Warden,  3  Watts,  101  ;  Cornhauser  v.  Roberts, 
75  Wis.  554,  44  N.  W.  744. 

1'^  In  Sangster  v.  Mazarredo,  1  Stark.  161,  where  the  action  was  assumpsit  against 
four  as  the  acceptors  of  bills  of  exchange,  three  of  whom  resided  abroad  and  had  been 
outlawed,  it  was  held,  that  an  admission  of  partnership  by  one  was  evidence  as  against 


§  78.]  WHO    ARE   PARTNERS.  69 

claims  to  be  partner  in  a  business  is  not  admissible  against 
anotlier  to  prove  bim  a  copartner.^  So  the  books  of  a  firm 
cannot  be  admitted  to  prove  one  a  partner  in  the  firm,  (e) 

(r)  [Bryce  v.  Joynt,  63  Gal.  375.]  So  Barb.  Ch.  105,  116  ;  Cliapin  v.  Coleman, 
it  seems  to  be  settled,  as  a  general  rule,  11  Pick.  331.  See  Studdy  v.  Sanders,  2 
that  a  plaintiff  cannot  prove  the  part-  D.  &  R.  347  ;  Pritchard  v.  Draper,  1  Russ. 
nership  of  those  whom  he  had  made  de-  &  M.  191  ;  Bevans  v.  Sullivan,  4  Gill, 
fendants,    by   the    admissions   of    one   of    383. 

them  made  in  his  answer  tiled  to  a  bill  It  was   held   in  one  case,  Whately  v. 

in  equity  ngainst  him.  Rooth  v.  Quin,  Manhim,  2  Esp.  608,  that  in  an  action 
7  Price,  193  ;  Field  v.  Holland,  6  Cranch,  by  A.  against  B.  &  C.  as  partners,  A. 
8,  24  :  Van  Reimsdyk  v.  Kane,  1  Gall,  might  establish  the  partnership  by  put- 
630,  635  ;  Clark  v.  Van  Reimsdyk,  9  ting  in  evidence  a  verdict  on  an  issue 
Cranch,  1,53,  156  ;  Osborn  v.  U.  S.  Bank,  between  B.  &  C.  directed  out  of  a  court 
9  Wheat.  788,  832  ;  Christie  v.  Bishop,  1  of  equity,  to  try  whether  they  were  part- 
that  one  of  a  joint  promise  by  the  four ;  since,  in  a  future  action  by  the  present 
defendant  against  his  co-defendants  for  contribution,  the  record  in  the  present  case 
would  not' be  sufficient  evidence  of  the  joint  liability.  See  Ellis  y.  Watson,  2  Stark. 
453,  478.  But  an  admission  by  one  that  he  is  a  partner  with  others  is  to  be  construed 
with  reference  to  the  circumstances  under  which  it  is  made,  and,  if  fairly  applicable 
only  to  a  single  transaction,  will  not  be  sufficient  to  establish  a  general  partnership. 
De  Berkom  v.  Smith,  1  Esp.  29.  See  Ridgway  v.  Philip,  1  Cr.,  M.  &  R.  415.  Where 
the  issue  of  partnershijt  was  raised  by  a  plea  in  abatement  for  the  non-joinder  of  {parties 
as  defendants,  the  admission  of  liability  as  a  partner  by  one  not  joined  in  the  suit,  being 
gooil  in  an  action  against  him,  was  held  to  be  also  receivable  on  this  issue  to  prove  him 
a  partner.     2  Greenl.  Ev.  §  484 ;  Clay  v.  Lanslow,  1  Moody  &  M.  45. 

1  Mont  V.  Mainwaring,  8  Taunt.  139  ;  Burgue  v.  Firmin,  3  Stark.  53  ;  Dit(^hburn 
V.  Spracklin,  5  Esp.  31  ;  Tinkler  v.  Walpole,  14  East,  226  ;  Gibbons  v.  Wilcox,  2 
Stark.  43  ;  Parker  v.  Brewer,  3  J.  B.  ]\[oore,  226  (see  Evans  v.  Drummond,  4  Esp.  89, 
91  ;  Heath  v.  Sansom,  4  B.  &  Ad.  172,  175)  ;  Oppenheimer  v.  Clemmons,  18  F.  R. 
886  ;  Cross  v.  Langley,  50  Ala.  8  ;  Humes  v.  O' Bryan,  74  Ala.  64  ;  Vanderhurst  v. 
De  Witt,  95  Cal.  57,  30  Pac.  94  ;  Butte  Hardware  Co.  v.  Wallace,  59  Conn.  336,  22  Atl. 
330  ;  Giliiin  v.  Temple,  4  Harr.  1,  90  ;  McCutchin  v.  Bankston,  2  Ga.  244  ;  Tumliu 
V.  Goldsmith,  40  Ga.  221  ;  Flonrnoy  v.  Williams,  68  Ga.  707  ;  Phillips  v.  Trowbridge 
Furniture  Co.,  86  Ga.  699,  13  S.  E.  19  ;  Southwick  v.  McGovern,  28  la.  533  ;  Degan 
V.  Singer,  41  111.  28  ;  Gardner  v.  North-Western  Co.,  52  111.  367  ;  Vannoy  v.  Klein, 
122  Ind.  416,  23  N.  E.  526  ;  Evans  v.  Cornell,  1  Greene  (la.)  25  ;  Brown  v.  Rains,  53 
la.  81,  4  N.  W.  867  ;  Phillips  v.  Purington,  15  Me.  425  ;  Tuttle  v.  Cooper,  5  Pick. 
414  ;  Bridge  ??.  Gray,  14  Pick.  55  ;  Ostrom  i;.  Jacobs,  9  Met.  454  ;  AUcott  v.  Strong,  9 
Cush.  323  ;  McNamara  v.  Eustis,  46  Minn.  311,  48  N.  W.  1123  ;  Boyd  v.  Ricketts,  60 
Miss.  62  ;  Filley  v.  McHenry,  71  Mo.  417  ;  Rimel  v.  Hayes,  83  Mo.  200  ;  Converse  v. 
Shambaugh,  4  Neb.  376  ;  Grafton  Bank  v.  Moore,  13  N.  H.  99  ;  Flanagin  v.  Champion, 
1  Green  Ch.  51 ;  Whitney  v.  Ferris.  10  Johns.  66  ;  Whitney  v.  Sterling,  14  Johns. 
215  ;  McPherson  v.  Rnthbone,  7  Wend.  216  ;  Mitchell  v.  Roulstone,  2  Hall,  351  ;  Fenn 
I'.  Timpson,  4  E.  D.  Smith,  276  ;  Kirby  v.  Hewitt,  26  Barb.  607  ;  Henry  v.  Willard, 
73  N.  C.  35  ;  Carson  v.  Gillitt  (N.  D.),  50  N.  W.  710  ;  Cowan  v.  Kinney,  33  Oh.  St. 
422  ;  Taylor  v.  Henderson,  17  S.  &  R.  453  ;  Nelson  v.  Lloyd,  9  Watts,  22  ;  Ander- 
son V.  Levan,  1  W.  &  S.  334  ;  Crossgrove  v.  Himmelrich,  54  Pa.  203  ;  Edwards  tJ. 
Tracy,  62  Pa.  374  ;  Vanzant  v.  Kay,  2  Humph.  106  ;  Buzard  v.  Jolly  (Tex.)  6  S.  W. 
422  ;  Wallis  v.  Wood  (Tex.)  7  S.  iv.  852  ;  Emberson  v.  McKenna,  (Tex.)  16  S.  W. 
419  ;  Bundy  v.  Bruce,  61  Vt.  619,  17  Atl.  796  ;  First  Nat.  Bank  of  Wausau  v.  Conway, 
67  Wis.  210,  30  N.  W.  215  ;  Strong  v.  Smith,  62  Conn.  39,  25  Atl.  395^ 


70 


THE   LAW   OF   PARTNERSHIP. 


[CH.    V. 


Whatever  be  the  evidence  offered  to  prove  a  partnership,  it  is 
said  that  parties  denying  it  cannot  give  evidence  of  private 
conversation  or  correspondence  to  rebut  that  evidence,  (eg) 

§  79.  Partnership  in  several  distinct  Firms.  —  There  is  nothing 
to  prevent  the  same  person  from  being  a  partner  in  several  dis- 
tinct firms.  (/)  This  may  involve  difficult  questions  of  fact,  or 
perhaps  of  law,  arising  from  the  complication  of  interests, 
especially  in  case  of  bankruptcy.  (^)  Some  of  these  questions 
we  shall  hereafter  consider,  when  we  treat  of  bankruptcy  and  the 
settlement  of  a  partnersliip  estate.  It  seems,  however,  not  only 
that  a  member  of  one  partnership  may  become  a  member  of 
another,  but  a  member  of  one  firm  may  enter  into  such  a  bargain 
with  a  third  party,  in  respect  to  the  interest  of  the  first  in  the 
stock,  business,  or  profits  of  his  partnership,  as  shall  constitute 
this  third  person  and  himself  partners  as  to  the  interest  of  the 
first,  although  the  partnerships  are  entirely  distinct,  the  new  from 
the  old,  and  the  third  person  acquires  no  rights  and  incurs  no 
obligations  in  reference  to  the  first  partnership.  (A)     If  the  new 


ners.  But  this  case  has  been  questioned, 
by  high  authority,  for  reasons  that  seem 
entirely  conclusive.  2  Stark.  Ev.  (7th 
Am.  ed.)  808,  n.  And  in  Burgess  v.  Lane, 
3  Me.  65,  it  was  held,  that  a  verdict 
and  judgment  thereon  can  be  admissible 
evidence  of  a  copartnership  in  another 
action,  only  when  both  the  parties  to  the 
second  suit  are  the  same  as  the  parties  to 
the  first.  See  Fogg  v.  Greene,  16  Me.  282  ; 
Ellis  V.  Jameson,  17  Me.  235  ;  Cragin  v. 
Carleton,  21  Me.  492  ;  Latham  v.  Ken- 
niston,  13  N.  H.  203.  See  Folk  v.  Wilson, 
21  Md.  538. 

{ee)  Freeman    v.  Smith,   2  Wall.    160. 

(J)  Swan  V.  Steele,  7  East,  210  ;  Bosan- 
quet  V.  Wray,  1  B.  &  C.  597  ;  Elderkin  v. 
W' inne,  1  Chand.  27. 

(g)  See  post,  §  200  ;  and  Steele  v. 
Stuart,  L.  E.  2  Eq.  84. 

(A)  To  this  effect  is  tlie  language  of 
Eyre,  C.  J.,  in  Bolton  v.  Puller,  1  B.  &  P. 
546  :  "  There  can  be  no  doubt  that,  as 
between  themselves,  a  j)artnership  may 
have  transactions  with  an  individual  part- 
ner, or  with  two  or  more  of  the  partners 
having  their  separate  estate  engaged  in 
some  joint  concern  in  which  the  general 
partnership  is  not  interested  ;  and  that 
they  may  by  their  acts  convert  the  joint 
j)roperty  of  the  general  partnership  into 


the  separate  property  of  an  individual  part- 
ner, or  into  the  joint  property  of  two  or 
more  partners,  or  e  converso.  And  their 
transactions  in  this  respect  will,  generally 
speaking,  bind  third  persons,  and  third 
persons  may  take  advantage  of  them  in 
the  same  manner  as  if  the  partnership 
were  transacting  business  with  strangers  ; 
for  instance,  suppose  the  general  partner- 
ship to  liave  sold  a  bale  of  goods  to  the 
particular  partnership,  a  creditor  of  the 
particular  partnership  might  take  those 
goods  in  execution  for  the  separate  debt 
of  that  particular  partnership.  In  some 
respects,  therefore,  an  individual  partner, 
or  a  particular  partnership  consisting  of 
two  or  more  of  those  persons  who  are 
partners  in  some  larger  partnership,  may 
be  consiilered  as  third  persons  in  transac- 
tions in  which  the  general  partnership  may 
happen  to  be  engaged  with  their  corre- 
spondent." The  court  proceeded  upon  the 
same  principle  in  Brown  v.  De  Tastet,  Jac, 
284.  There  A.,  B.,  and  C.  being  in  part- 
nership, A.  agreed  with  D.  to  give  him  a 
moiety  of  his  share  in  the  firm.  It  was 
held  that  an  account  might  be  decreed  be- 
tween A.  and  D.  without  making  B.  and 
C.  parties.     See  Glassington  v.  Thwaites, 

1  Sim.  &  S.   124.     In   Ex  parte  Barrow, 

2  Rose,  255,  the  two  Slyths,  father  and 


§  79.] 


WHO    ARE   PARTNERS. 


71 


partnership  becomes  insolvent,  it  would  affect  the  old  partnership 
only  as  the  insolvency  of  any  member  tliereof  would,  (t)  If  a 
person  belongs  to  two  firms,  lie  may  transfer  to  the  credit  of  one 
of  them  his  interest  in  the  other,  against  the  wishes  of  his  part- 
ners in  the  second  lirm  ;  nor  would  this  necessarily  operate  a 
dissolution  of  the  second  firm,  (j)  i3ut  it  is  so  obvious  that  such 
complicated  arrangements  may  bring  ujton  the  j)arties  great  incon- 
venience and  embarrassment,  that  they  will  continue  to  be  very 
rare,  even  if  they  take  place  at  all. 


son,  were  in  partnership.  They  agreed 
to  dissolve  ;  that  the  allairs  of  the  i)art- 
nership  should  be  settled  by  arbitration ; 
and  that  Slyth  the  younger  should  have 
one-third  out  of  the  prohts  of  the  business, 
until  some  situation  should  be  found  for 
him.  The  affairs  of  the  partnership  were 
never  adjusted  ;  but,  shortly  after,  Slyth 
the  elder,  who  remained  in  possession  of 
the  effects  of  the  firm,  formed  a  new  jiart- 
nership  with  Gyles.  A  commission  of  bank- 
ruptcy having  issued  against  the  two  SI yths, 
their  assignees  took  possession  of  the  effects 
of  Slyth  and  Gyles,  to  an  amount  more 
than  sufficient  to  pay  the  cre<Iitors  of  that 
firm.  The  question  in  the  present  case 
was  to  whom  the  sui-plus  belonged,  whether 
to  the  joint  creditors  of  Slyth  the  elder 
and  Slyth  the  younger,  or  to  the  separate 
creditors  of  Slyth  the  elder.  The  court 
lield  that  it  was  the  separate  ])ro[ierty  of 
Slyth  the  elder.  Lord  Chancellor  Eld(ju, 
in  the  course  of  his  opinion,  said:  "  Now 
Slyth  the  son  was  no  partner  in  this  (the 


new)  partnership;  for  although  Slyth  the 
father  might  be  obliged  to  give  one-third 
of  his  profits  to  Slyth  the  son  under  this 
.arrangement,  yet  I  take  it  to  have  been 
long  since  clearly  established,  that  a  man 
may  become  a  partner  with  A.,  where  A. 
and  B.  are  partners,  and  yet  not  be  a 
member  of  that  partnership  which  existed 
between  A.  and  B.  In  the  case  of  Sir 
Charles  Raymond,  a  banker  in  the  city,  a 
Mr.  Fletclier  agreed  with  Sir  Charles 
Raymond  that  he  should  be  interested  so 
far  as  to  receive  a  share  of  his  profits  of 
the  business,  and  which  share  he  had  a 
right  to  draw  out  of  the  firm  of  Raymond 
&  Co.  But  it  was  held  that  he  was  no 
partner  in  that  partnership,  had  no  de- 
auand  against  it,  liad  no  account  in  it, 
and  that  he  must  be  satisfied  with  a  share 
of  the  ]ii'ofits  arising  and  given  to  Sir 
Charles  Raymond."  See  Freligh  v.  Miller, 
16  La.  Ann.  418. 

(/)  See  preceding  note. 

( j)  Ru.ssell  V.  Leiand,  12  All.  849. 


72  THE   LAW   OF   PARTNERSHIP.  [CH.    VI. 


CHAPTER    VI. 

WHO    ARE  LIABLE   AS   PARTNERS   AS   TO    THIRD   PARTIES. 

§  80.  General  Grounds  of  Liability.  —  As  we  have  seen  tliat  it  is 
one  of  the  essential  qualities  of  partnership  that  upon  each  part- 
ner rests  an  absolute  liability  for  the  whole  amount  of  every  debt 
due  from  the  partnership,  it  is  of  the  utmost  consequence,  both  to 
the  creditors  of  a  partnership  and  to  actual  or  alleged  members  of 
it,  to  determine  with  certainty  who  they  are  upon  whom  this  lia- 
bility rests  ;  or,  in  other  words,  who  are  partners  in  respect  to 
third  parties  dealing  with  the  firm.  And  this  question  is  some- 
times as  difficult  as  it  is  important.  It  is  certain  that  persons 
may  be  held  as  partners  as  to  third  parties,  who  would  not  be 
deemed  partners  as  between-  themselves,  (aa) 

The  first  thing  to  be  remembered  is,  that  persons  may  be 
charged  as  partners  of  a  firm  on  either  one  of  two  perfectly  dis- 
tinct grounds,  to  both  of  wliich  we  have  already  referred.  One  of 
these  is,  that  the  person  actually  is  a  partner.  The  other  is,  that 
he  has,  with  his  own  knowledge  and  consent,  been  held  forth  as  a 
partner,  to  the  person  having  a  claim,  or  to  the  public  generally. 
In  the  great  majority  of  cases  these  two  causes  unite ;  that  is,  he 
is  held  forth  as  a  partner  who  actually  is  one.  The  secret  partner, 
on  the  one  hand,  or  the  merely  nominal  partner,  on  the  other,  are 
exceptions  to  the  prevailing  custom  ;  but  such  exceptions  do  occur, 
and  not  very  unfrequently  :  and  then  the  question  is.  What  are  the 
rules  of  law  in  regard  to  them  ? 

The  first  which  we  state  is,  that  the  liability  of  a  partner  is 
fastened  upon  any  person  just  as  absolutely,  and  to  all  intents  and 
purposes,  by  either  one  of  these  causes  alone,  as  by  both  of  them 
together.  And  the  reason  is  obvious.  If  a  man  is  in  fact  a  part- 
ner in  a  mercantile  or  other  partnership,  the  mere  circumstance 

{aa)  Grieff  y.  Boudousquie,  18  La.  An.  thority,  and  maybe  held  as  partner,  even 

631.     A  person  may  be  so  negligent  as  to  though  there  be  no  community  of  interest 

be  estopped  to  deny  that  a  person  who  is  or  participation  in  profits.     I71  re  Jewett, 

managing  his  property  is  acting  by  his  au-  15  N.  B.  R.  126. 


§  80.]       WHO    ARE   LIABLE    AS   PARTNERS   AS   TO    THIRD   PARTIES.        78 


that  he  has  been  able  to  conceal  this  partnership  from  the  world 
affords  no  reason  whatever  why  he  should  not  share  in  the  lia- 
bilities of  the  known  partners,  (a) 


(a)  That  one  who  is  a  partner  in  fiict, 
though  not  known  to  be  so,  is  liable  upon 
all  the  partnership  engagements  to  the 
same  extent  as  though  his  name  had  never 
been  concealed,  is  one  of  the  oldest  and 
best-established  doctrines  of  partnership 
law.  In  Hoare  v.  Dawes,  2  Doug.  371, 
Lord  Mansfield  said  :  "  I  considered  them 
at  first  as  a  sort  of  dormant  partners.  The 
law  with  respect  to  them  is  not  disputed, 
namely,  that  they  are  liable  when  discov- 
ered, because  they  would  otherwise  receive 
usurious  interest  without  risk."  And  in 
Saville  v,  Robertson,  4  T.  R.  725,  Lord 
Kenyon,  C.  J.,  said:  "It  is  clear  that  if 
all  these  parties  had  been  partners  at  the 
time  when  these  goods  were  furnished, 
though  that  circumstance  were  not  known 
to  the  plaintiff,  they  would  all  have  been 
liable  for  the  value  of  the  goods.  It  is 
ejually  clear  that  such  an  action  might  be 
maintained  against  the  dormant  partners 
alone,  unless  they  pleaded  in  abatement." 
Coope  V.  Eyre,  1  H.  Bl.  48  ;  Gouthwaite 
V.  Duckworth,  12  East,  421  ;  Swan  v. 
Steele,    7   East,    210;   Ex  parte    Raleigh, 

3  Mont.  &  Ayr.  670  ;  Evans  v.  Drummond, 

4  Esp.  89  ;  Ex  parte  Cellar,  1  Rose,  297  ; 
Dyke  v.  Brewer,  2  C.  &  K.  828.  The 
whole  doctrine  on  the  subject  is  thus  stated 
by  JIarshall,  C.  J.,  in  Winship  v.  Bank  of 
the  United  States,  5  Pet.  561 :  "  Partner- 
shifis  for  commercial  purposes,  for  trading 
with  the  W'Orld,  for  buying  and  selling 
from  and  to  a  great  number  of  individuals, 
are  necessarily  governed  by  many  general 
principles,  which  are  known  to  the  public, 
which  subserve  the  purpose  of  justice,  and 
which  societj'  is  concerned  in  sustaining. 
One  of  them  is,  that  a  man  who  shares  in 
the  profits,  although  his  name  may  not  be 
in  the  firm,  is  responsible  for  all  its  debts. 
Another  more  applicable  to  the  subject  un- 
der consideration  is,  that  a  partner,  cer- 
tainly the  acting  partner,  has  power  to 
transact  the  whole  business  of  the  firm, 
whatever  that  may  be,  and,  consequently, 
to  bind  his  partners  in  such  transactions 
as  entirely  as  himself.  This  is  a  general 
power,  essential  to  the  well  conducting  of 
business,  which  is  implied  in  the  existence 


of  a  partnership.  When,  then,  a  partner- 
ship is  formed  for  a  particular  purpose,  it 
is  understood  to  be  in  itself  a  grant  of 
power  to  the  acting  members  of  the  com- 
pany to  transact  its  business  in  the  usual 
way.  If  that  business  be  to  buy  and  sell, 
then  the  individual  buys  and  sells  for  the 
company  ;  and  every  person  with  whom  he 
trades,  in  the  way  of  its  business,  has  a 
right  to  consider  him  as  the  company, 
whoever  may  compose  it.  It  is  usual  to 
buy  and  sell  on  credit  ;  and,  if  it  do  so, 
the  partner  who  purchases  on  credit  in  the 
name  of  the  firm  nmst  bind  the  firm.  This 
is  a  general  authoiity  held  out  to  the  world, 
to  which  the  world  has  a  right  to  trust. 
The  articles  of  copartnei'ship  are  perhaps 
never  published.  They  are  rarely  if  ever 
seen,  except  by  the  partners  themselves. 
The  stipulations  they  may  cont;iin  are  to 
regulate  the  conduct  and  rights  of  the  par- 
ties as  between  theniselves.  The  trading 
world,  with  whom  the  company  is  in  per- 
petual intercourse,  cannot  individually  ex- 
amine these  articles,  but  must  trust  to  the 
general  power  contained  in  all  partner- 
shij^s.  The  acting  partners  are  identified 
with  the  company,  and  have  a  right  to 
conduct  its  usual  business  in  the  usual 
way.  This  power  is  conferred  by  entering 
into  the  partnership,  and  is  perhaps  never 
to  be  found  in  the  articles.  If  it  is  to  be 
restrained,  fair  dealing  requires  that  the 
restriction  .should  be  made  known.  These 
stipulations  may  bind  the  partners,  but 
ought  not  to  affect  those  to  whom  they  are 
unknown,  and  who  trust  to  the  ggneral 
and  well-established  commercial  law.  See 
Richardson  v.  Farmer,  86  JIo.  35. 

"The  counsel  for  the  plaintiff  in  error 
supposes  that,  though  these  principles  may 
be  applicable  to  an  open  avowed  partner- 
ship, they  are  inapplicable  to  one  that  is 
secret.  Can  this  distinction  be  main- 
tained ?  If  it  could  there  would  be  a  dif- 
ference between  the  responsibility  of  a 
dormant  partner  and  one  whose  name  was 
to  the  articles.  But  their  res])onsibility, 
in  all  partnership  transactions,  is  admitted 
to  be  the  same.  Those  who  trade  with  a 
firm  on  the  credit  of  individuals  whom 


74 


THE   LAW   OF   PARTNERSHIP, 


[CH.    VI. 


§  81.  Liability  of  Secret  Partner,  —  A  Secret  partner  is  there- 
fore liable  upon  all  the  acting  partner's  contracts  made  within  the 
usual  scope  of  the  partneishij)  business,^  whether  such  contracts 
are  really  on  partnership  account  or  not.  It  might  perhaps  be 
said,  that  as  no  credit  is  given  to  the  secret  partner,  and  as  his 
liability  is  wholly  founded  upon  his  interest,  if  it  were  shown  that 
in  fact  he  had  no  interest  in  a  particular  transaction,  he  ought 
not  to  be  bound  with  reference  to  it,  even  though  it  were  appar- 
ently within  the  regular  course  of  the  business  carried  on  by  the 
partnership.  And  there  are  cases  in  which  the  court  seems  to 
adopt  this  view.  But  the  rule  above  stated  rests  upon  the  better 
reason  and  the  stronger  authority,  {h)     It  has  been  held  that  a 


they  believe  to  be  lueiubcis  of  it  take 
upon  themselves  the  hazard  that  their  be- 
lief is  well  founded.  If  they  are  mistaken, 
they  must  submit  to  the  consequences  of 
their  mistake  ;  if  their  belief  be  verified  by 
the  fact,  their  claims  on  the  partners,  who 
were  not  ostensible,  are  as  valid  as  on  those 
whose  names  are  in  the  firm.  This  dis- 
tinction seems  to  be  founded  on  the  idea 
that,  if  partners  are  not  openly  named, 
the  resort  to  them  must  be  connected  with 
some  knowledge  of  the  secret  stipulations 
between  the  partners,  which  may  be  in- 
serted in  the  articles.  But  this  certainly 
is  not  correct.  The  responsibility  of  un- 
avowed  partners  depends  on  the  general 
principles  of  commercial  law,  not  on  the 
particular  stipulation  of  the  articles."  s.  c. 
5  Mason,  176  ;  Armstrong  v.  Hussy,  12  S. 
&R.  315;  Mifflin  v.  Smith,  17  S.  &R.  165; 
Graeff  v.  Hitchraan,  5  ^A'atts,  454  ;  Given 
V.  Albert,  5  W.  &  S.  333;  Bisel  v.  Hobbs,  6 
Bla(;kf.  479  ;  Braches  v.  Anderson,  14  Mo. 
441;  Church  v.  Sparrow,  5  Wend.  223;  Bax- 
ter i^.  Clark,  4  Ired.  127;  Everitt  v.  Chap- 
man, 6  Conn.  347;  Reynolds  v.  Cleveland,  4 
Cow.  282;  Kelley  v.  Hurlburt,  5  Cow.  534; 
In  re  Warren,   2  Ware  (  ),   Davies, 

324  ;  Hadfield  v.  Jameson,  2  Munf.  66  ; 
Grosvenor  v.  Lloyd,  1  Met.  19  ;  McDonald 
V.  Millandon,  5  La.  406,  408;  Lea  v.  Guice, 
13  S.  &  M.  656  ;  Smith  v.  Smith,  27  N.  H. 
244  ;  Brooke  v.  Washington,  8  Gratt.  248  ; 
Hill  V.  Voorhies,  22  Pa.  680  ;  Griffith  v. 
Buffum,  22  Vt.  181  ;  Pratt  r.  Langdon,  12 
Allen,  544.  [Callender  v.  Robinson,  96 
Pa.  454;  Gavin  v.  Walker,  14  Lea,  643.] 
A  secret  partner  cannot  avoid  his  liability 
to  creditors  by  showing  that,  according  to 


the  law  of  the  place  where  it  was  made, 
the  contract  of  partnership  as  between  the 
parties  was  void.  Oakley  v.  Aspinwall, 
2  Sandf.  7.  [Where  a  business  is  carried 
on  by  an  ostensible  sole  trader,  and  he 
borrows  money  for  the  business,  his  secret 
partner  is  liable,  though  the  money  was 
misused.  Gavin  v.  Walker,  14  Lea,  643.] 
{b)  In  Etheridge  v.  Binney,  9  Pick. 
272,  where  the  two  Binneys  and  John 
Winship  carried  on  the  manufacture  of 
soap  and  candles  in  partnership,  but  in  the 
name  of  John  Winship  alone,  the  principal 
question  in  the  case  being  whether  the 
Binneys  were  liable  for  moneys  borrowed 
by  Winship,  the  court  instructed  the  jury 
that  "  the  name  of  the  firm  here  being 
only  the  name  of  the  individual,  a  note 
offered  in  that  name,  unaccompanied  by 
any  representation,  would  of  course  import 
only  a  promise  of  John  Winship  alone  ; 
and  the  credit  being  given  to  him  alone, 
the  creditor  would  not  recover  against  the 
firm,  without  proving  that  the  money 
actually  went  into  the  funds  of  the  firm. 
But  if  the  borrowing  ]iartner  states  that 
he  is  one  of  a  company,  and  that  he  bor- 
rows money  for  the  company,  or  purchases 
goods  for  their  use,  then,  as  there  is  such 
company,  and  as  they  have  given  him 
authority  to  use  the  company  credit  to  a 
certain  extent,  and  as  the  creditor  will 
have  no  means  of  knowing  whether  he  is 
acting  honestly  towards  his  associates  or 
otherwise,  and  he  lends  the  money  or  sells 
the  goods  on  the  faith  of  such  representa- 
tion, the  company  will  be  bound,  unless 
they  prove  that  the  contract  was  for  his 
private  benefit,  and  known  to  be  so  by  the 


1  Reab  v.  Pool,  30  S.  C.  140,  8  S.  E.  703. 


§  81.J 


WHO    ARE   LIABLE   AS   PARTNERS    AS   TO   THIRD    PARTIES,        75 


judgment  obtained  against  an  ostensible  partner,  upon  a  note  given 
by  him  in  his  own  name  in  the  course  of  the  partnership  business, 


creditor."  When  two  jiersons,  under  a 
piivate  agreement,  become  [lartners  as  to 
third  i)artie8,  the  contract  specifying  no 
firm  name,  but  allowing  each  partner  to 
purchase  goods  on  his  own  individual 
creiiit,  —  one  to  transact  the  business,  and 
tlie  other  to  be  unknown,  —  the  dormant 
partner  is  not  liable  on  a  note  for  goods 
jiut  into  the  concern  by  the  other,  and  by 
him  signed  in  his  own  name  ;  the  signa- 
ture not  being  intended  as  the  firm  signa- 
ture, and  the  payee  not  having  reason  to 
su[)pose  it  to  be  such.  Palmer  v.  Elliot,  1 
cut.  63.  See  also  Mercantile  Bk.  i'.  Cox, 
38  Me.  500.  But  see  Hendrick  v.  Gunn, 
35  Ga.  234.  In  Lloyd  v.  Ashby,  2  C.  &  P. 
138,  assumpsit  was  brought  on  a  bill  of 
exchange,  accepted  by  "  Ashby  &  Piow- 
land."  The  question  was  whether  Shasv, 
a  dormant  partner  with  Ashby  k  liowland, 
was  liable  on  the  above  acceptance.  Shaw 
was  not  known  as  a  partner,  nor  did  his 
name  appear  in  the  partnership  transac- 
tions. The  bill  in  question  was  accepted 
in  a  matter  having  no  relation  to  the  part- 
nership business.  Abbott,  C.  J.:  "If 
Shaw  had  been  known  to  be  a  partner,  I 
should  have  held  that  it  was  taken  on  his 
credit ;  and  that,  unless  there  was  fraud  in 
the  plaintitf,  he  would  be  entitled  to  re- 
cover on  it  against  Shaw  ;  but  as  the  plain- 
tiff did  not  know  that  Shaw  was  a  partner, 
and  as  he  could  not  have  taken  the  bill  on 
Shaw's  credit,  I  am  of  the  opinion  that 
the  plaintitf  cannot  recover.  I  gi'ound 
myself  on  these  circumstances,  that  ilr. 
Shaw  was  an  unknown  partner,  and  that 
the  bill  was  not  accepted  for  a  debt  from 
him,  but  for  the  raising  of  money  from 
which  he  had  no  benefit."  See  also  Young 
V.  Hunter,  4  Taunt.  583,  opinion  of  Gibbs, 
J.  :  Ex  parte  Bolitho,  Buck,  100.  See 
Miller  v.  Maince,  6  Hill,  114.  But  the 
doctrine  of  these  decisions  is  certainly  con- 
troverted by  better  considered  and  more 
weighty  adjudications.  Lloyd  v.  Ashby, 
supra,  was  afterwards  reconsidered  in  the 
King's  Bench  ;  and  the  court  were  of 
opinion  that  the  plaintitf  was  entitled  to 
recover,  and  a  new  trial  was  granted.  2 
B.  &  Aid.  23.  The  principle  of  the  deci- 
sion in  Vere  v.  Ashby,  10  B.  &  C.  288,  is 


the  same  with  that  in  2  B.  &  Aid.  23  ; 
and  in  Wintle  v.  Crowther,  1  C.  &  G.  316, 
Bay  ley,  B.,  referring  to  the  above  cases, 
said;  "Notwithstanding  these  cases,  we 
are  of  opinion,  that  when  a  partnership 
name  is  pledged,  the  partnership,  of  whom- 
soever it  may  consist,  and  whether  the 
partners  are  named  or  not,  and  whether 
they  are  known  or  secret  partners,  will  be 
bound,  unless  the  title  of  the  person  who 
seeks  to  charge  them  can  be  impeached." 
See  Nichols  v.  Cheairs,  4  Sueed,  229.  In 
Ross  17.  Decy,  2  Esp.  469,  the  action  was 
for  goods  sold  and  delivered  ;  plea  set  off. 
The  plaintiffs  entered  into  partnership  as 
grocers,  Ross  to  keep  the  shop  in  his  own 
name  only.  He  sold  to  the  delendant  the 
goods  for  the  price  of  which  the  present 
action  was  brought.  The  defendant  had 
done  business  for  Ross  on  his  separate 
account  to  a  greater  amount  than  the 
demand  now  made  against  him  by  the  part- 
nership ;  and  this  he  offered  to  set  off. 
Lord  Kenyon  was  of  opinion  that  the  set- 
off was  good.  His  lordship  said,  the  j)lain- 
titfs  had  subjected  themselves  to  it,  by 
holding  out  false  colors  to  the  world,  by 
permitting  Ross  to  appear  as  the  sole 
owner  ;  that  it  was  possible  the  defendant 
would  not  have  trusted  Ross  only,  if  he 
had  not  considered  the  debt  due  to  himself 
as  a  security  against  the  counter  demand. 
Furtheimore,  not  only  is  a  secret  partner 
bound  by  all  transactions  within  the  scope 
of  the  partnership  business,  whether  on 
partnership  account  in  fact  or  not,  but  in 
Robinson  r.  W^ilkinson,  3  Price,  538,  it  is 
said  to  be  "  clear  law  that  a  dormant  part- 
ner cannot  discharge  himself  from  liability 
to  pay  the  debts  of  a  creditor  through  the 
medium  of  his  ostensible  partner  by  any 
acts  of  his  during  the  concealment  of  the 
unknown  partner."  There,  Wilkinson 
•was  a  secret  partner  with  Cay  in  a  vessel. 
The  plaintiff  supplied  the  vessel  with 
stores  on  the  credit  of  Cay  ;  took  Cay's 
sole  bills  for  the  amount  of  his  debt ; 
allowed  him  to  renew  them  when  due,  and 
afterwards,  Cay  proving  insolvent,  com- 
pounded with  him  for  the  unpaid  portion 
of  the  debt,  and  received  as  security  the 
acceptance  of  a  third  person.    But  the  fact 


76 


THE   LAW   OF    PARTNERSHIP. 


[CH.    VI. 


his  copartner  being  unknown  to  the  creditor  was  no  bar  to  a  joint 
action  upon  the  same  note  against  both  the  ostensible  and  the 
secret  partner,  (c)  But  this  doctrine  is  opposed  to  the  weight  of 
American  authority ,  and  upon  the  ground  that  a  partnership  debt 
is,  in  this  respect,  joint  only,  and  not  joint  and  several,  a  judgment 
against  the  ostensible  partner  or  partners,  though  unsatisfied,  may 
be  pleaded  in  bar  to  a  subsequent  suit  upon  the  same  cause  of 
action,  where  both  the  ostensible  and  the  secret  partners  are 
joined  as  defendants,  {d)  It  has,  however,  been  said,  that  the  law 
as  to  dormant  partners  is  confined  to  commercial  partnerships, 
and  does  not  extend  to  speculations  in  land,  (g) 

§  82.  Liability  of  a  Nominal  Partner.  —  If  such  be  the  law  in 
regard  to  one  who  is  an  actual  but  a  secret  partner,  on  the  other 
hand,  if  he  be  not  a  partner  in  fact,  but  has,  for  or  without  a  reason, 
suffered  those  who  dealt  with  the  firm,  or  any  one  of  them,  to 
believe  that  the  firm  had  the  guaranty  of  his  liability  as  partner, 
and  thus  gave  to  the  firm  his  credit,  there  are  no  grounds  what- 
ever for  permitting  him  to  refuse  to  satisfy  that  guaranty,  merely 
because  the  actual  relation  between  him  and  the  partnership 
would  not  of  itself  have  created  it.  (/)     To  give  to  such  a  circum- 


of  Wilkinson'.s  interest  in  the  ship  being 
unknown  to  the  jilaintitf  during  the  time 
of  these  several  transactions,  it  was  hehi 
that  he  was  not  discharged  by  anything 
that  had  taken  place.  A  similar  decision 
was  made  in  Chamberlain  v.  Madden,  7 
Rich.  395. 

(c)  Sheehy  v.  Mandeville,  6  Cranch, 
253  (overruled  in  Mason  v.  Eldred,  6 
Wall.  231).  See  Van  Ness  v.  Forrest,  8 
Cranch,  30  ;  Watson  v.  Owens,  1  Rich. 
Ill  ;  Brozel  v.  Poyntz,  3  B.  Mon.  178; 
Scott  V.  Cohncsnil,  7  J.  J.  Marsh.  416  ; 
Dennett  v.  Chick,  2  Me.  191  ;  Nichols  v. 
Cheairs,  4  Sneed,  229. 

(d)  Robertson  v.  Smith,  18  Johns.  459; 
Ward  V.  Johnson,  13  Mass.  148  ;  Smith  v. 
Black,  9  S.  &.  R.  142  ;  Moale  v.  Hollins, 
11  G.  &  J.  11  ;  Willings  v.  Consequa,  1 
Pet.  C.  C.  301  ;  Anderson  v.  Levan,  1  W. 
&  S.  334.  See  further  Pierce  v.  Kearney,  5 
Hill,  94;  Mossu.  McCullough,  5  Hill,  135, 
136  ;  Ward  v.  Motter,  2  Eob.  (Va.)  559, 
560 ;  Nichols  v.  Anguera,  2  Mills,  290  ; 
Grafton  v.  The  United  States,  3  Story, 
649  ;  United  States  v.  Cushman,  2  Sumn. 
438  ;  Gibbs  v.  Bryant,  1  Pick.  121  ; 
Peters  v.  Sandford,  1  Denio,  224  ;  Van 
Valen  v.  Russell,  13  Barb.  593  ;    Ledam 


V.  Hodges,  4  McLean,  51  ;    How  v.  Kane, 

2  Chand.  222  ;  Philson  v.  Bampfield,  1 
Brev.  202.  Whether,  if  a  creditor  has 
lost  his  right  of  action  against  all  the 
partners,  by  obtaining  judgment  against 
the  ostensible  partner  alone,  equity  will 
relieve  him  as  against  the  dormant  part- 
ners when  discovered,  see  Penny  i;. 
Morton,  4  Johns.  Ch.  566  ;  Willings  v. 
Consequa,  1  Peters  C.  C.  301  ;  Smith  v. 
Black,  9  S.  &  R.  142  ;  Ledam  v.  Hodges, 
4  McLean,  51  ;  How  v.  Kane,  2  Chand. 
222. 

(e)  Pitts  V.  Waugh,  4  Mass.  424 ;  Smith 
r.  Jones,  12  Me.  332  ;  Smith  v.  Burnliam 

3  Sumn.  470.    See  post,  §  269  [.scc^  (juery]. 

(/)  Young  V.  Axtell,  cited  in  Waugh 
V.  Carver,  2  H.  Bl.  235.  There  the  ques- 
tion was,  whether  Mrs.  Axtell  was  liable 
as  partner  with  the  defendant,  for  coals 
sold  and  delivered  by  the  plaintiff.  An 
agreement  was  in  evidence,  from  which  a 
partnership  inter  se  was  attempted  to  be 
proved  ;  but,  it  being  shown  that  bills 
were  made  out  for  goods  sold  to  her  cus- 
tomers in  their  joint  names,  Lord  Mans- 
field said  :  "  However,  as  she  suffered  her 
name  to  be  used  in  the  business  and  held 
herself  out  as  a  partner,  she  was  certainly 


§  84.]       WHO    ARE   LIABLE    AS    PARTNERS    AS   TO   THIRD    PERSONS.      77 

stance  this  effect  would  be  to  sanction  an  obvious  and  easy  fraud. 
It  is,  however,  evident  that  he  is  liable  as  a  partner  only  to  those 
who  have  been  led  with  his  consent  to  believe  him  a  partner,  and 
who  have  trusted  the  firm  on  his  credit,  {jf) 

§  83.  General  Authority  of  Partner,  —  The  general  principle 
which  lies  at  the  foundation  of  the  partner's  liability  is,  that  every 
partner  has  full  and  absolute  authority  to  bind  all  the  partners  by 
liis  acts  or  contracts,  in  relation  to  the  business  of  the  firm,  in  the 
same  manner  and  to  the  same  extent  as  if  he  held  full  powers  of 
attorney  from  all  the  members.  No  principle  is  better  established 
than  this  :  it  rests  not  only  on  universal  usage  and  universal  author- 
ity, but  on  obvious  reason  and  necessity ;  because,  if  the  rule  were 
otherwise,  a  very  large  proportion  of  the  advantages  and  facilities 
for  which  partnerships  are  formed  would  be  lost.  It  must,  however, 
be  remembered  that  a  partner  binds  the  firm,  necessarily  only  when 
he  uses  the  name  of  the  firm.^  Hence  it  has  been  held  that  the 
execution  of  a  mortgage  of  personal  property  of  a  partnership,  by 
one  partner  in  his  individual  name,  passes  no  title,  (uii) 

§  84.  How  far  it  may  be  limited. — This  authority  of  each  part- 
ner is  only  an  implied  one.  It  is  a  fair  inference  from  the  fact  of 
partnership :  it  is  an  inference  from  the  reason  of  the  thing,  as 
well  as  from  the  rules  of  law.  But  it  is  an  inference  which  can- 
not be  made  when  the  partners  disclaim  it,  honestly,  in  a  reason- 
able way,  and  by  act  as  well  as  word.  Hence,  if  the  act  of  a 
partner  be  forbidden  by  his  copartners,  and  notice  is  given  to  the 
person  with  whom  he  deals,  he  no  longer  acts  as  their  agent,  and 

liable,  though  the  plaintiti'  did  not,  at  the  lentit  only  to  two  of  them,to  whom,  without 

time  of  dealing,  know  that  she  was  a  partner,  the  others,  they  would  have  lent  nothing." 

or  that  her  name  was  used."     The  ground  See  further,  in  illustration  of  the  general 

upon  which  persons  held  out  as  partners  principle,  De  Berkom  v.  Smith,  1  Esp.  29; 

are  made  liable,  as  such,  to  third  persons.  Guidon  v.  Robson,  2  Camp.  302  ;  Parsons 

is  thus  stated  by  Lord  Chief  Justice  Eyre  in  v.  Crosby,  5  Esp.  199;   ^z  parte  Watson, 

AVaughv.  Carver,  supra:  "  Now,  a  case  may  19  Ves.  461  ;    Ex  parte  Matthews,  3  Ves, 

be  stated  in  which  it  is  the  clear  sense  of  &  B.  125  ;  Dolman  v.  Orchard,  2  C.  &  P. 

the  parties  to  the  contract  that  they  shall  104  ;     Stearns    v.    Haven,    14    Vt.    540  ; 

not  be  partners  ;   that  A.  is  to  contribute  Cottrill  v.  Vanduzen,  22  Vt.  511  ;    Furber 

neither  labor  nor  money  ;  and,  to  go  still  v.  Carter,  11  Humph.  271  ;   Perry  v.  Pan- 

further,  not  to  receive  any  profits.     But,  dolph,  6  S.  &  M.  335.    See  also  post,  §  93  ; 

if  he  will  lend  his  name  as  a  partner,  he  Fisher  v.    Bowles,    20   111.   396  ;  Irwin  v. 

becomes,   as   against   all   the   rest  of  the  Conklin,  36  Barb.  64  ;  Bams  v.  Rowlands, 

world,  a  partner,  not  upon  the  ground  of  the  40  Barb.  368  ;  Moss  v.  Jerome,  10  Bosw. 

real  transaction   between  them,  but  upon  220  ;  Moffat  v.  Moffat,  19  Bosw.  468. 
principles  of  general   policy,    to   prevent  (ff)  Wood  r.  Pennell,  15  Me.  52. 

the  frauds   to  which   creditors  would  be  (uu)  Clark  v.  Houghton,  12  Gray,  38  ; 

liable,  if  they  were  to  suppose  that  they  and  see  Butterfield  v.  Hensley,  12  Gray, 

lent  their  money  upon  the  apparent  credit  226  ;   and  Cummings  v.  Parish,  30  Miss. 

of  three  or  four  persons,  when  in  fact,  they  41 2. 

1  Norton  v.  Thatcher,  8  Neb.  186.     See  post,  §  98. 


78 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


his  act  is  only  his  own.  {iiuu')  The  great  difiiculty  is  in  drawing 
the  line  between  a  rule  which  would  give  to  any  partner,  at  his 
own  pleasure,  all  the  advantages  and  none  of  the  liabilities  of  a 
partner,  and,  on  the  other  hand,  permitting  reasonable  and  honest 
limitations  or  qualifications  of  liability  which  ought  to  operate  on 
all  who  have  contracted  with  full  knowledge  of  t-liem,  and  have 
therefore   assented  to  them,  (v)      It  should  be  added,  that  the 


(mill)  Yeager  v.  Wallace,  .57  Pa.  365  ; 
[Ellis  V.  Allen,  80  Ala.  515,  2  So.  676  ; 
Moffitt  V.  Roche,  92  Ind.  96.] 

(y)  Thus,  in  Aldeison  v.  Pope,  1  Camp. 
404  ;  note  (ri).  Lord  Ellen  borough  held, 
that  when  there  was  a  stipulation  between 
A.,  B.,  &  C,  who  appeared  to  the  world 
as  copartners,  that  C.  should  not  jiartici- 
pate  in  the  profit  and  loss,  and  should  not 
be  liable  as  partner,  C.  was  not  liable  as 
partner  to  those  who  had  notice  of  this 
stipulation,  and  that  notice  to  one  mem- 
ber of  a  firm  was  notice  to  the  whole 
])artnership.  Compare  with  this  case 
Brown  v  Leonard,  2  Chitty,  120.  In 
Batty  V.  M'Cundie,  3  C.  & '  P.  202,  the 
defendants  had  become  shareholders  in  a 
newspaper,  the  prospectus  of  which  Col. 
Jones,  one  of  the  plaintiffs,  who  were 
partners,  had  been  concerned  in  prepar- 
ing, and  which  stated  that  the  subscribers 
were  not  to  be  partners,  and  were  not  to 
be  liable  for  more  than  their  subscrip- 
tions ;  the  present  suit  being  brought  for 
the  price  of  stationery  furnished  for  the 
newspaper.  Parke,  J.  (in  summing  up), 
said  :  "  The  question  is,  whether  Col. 
Jones,  having  a  knowledge  of  all  the 
circumstances,  can  maintain  the  action  ; 
for  it  is  clear  that  his  knowledge  is  the 
knowledge  of  all  the  plaintiffs.  There  is 
no  doubt  that  the  defendants  were  pro- 
prietors ;  but  that  will  not  make  them 
partners.  The  question  is,  whether  Col. 
Jones  did  not  know  that  these  persons, 
though  called  proprietors,  were  not  to  be 
deemed  partners,  and  whether  he  did  not 
give  them  an  assurance  that  they  would 
not  be  liable  for  more  than  their  subscrip- 
tions ?  The  prospectus  states  that  the 
subscribers  are  not  to  be  partners  ;  and  it 
is  proved  that  he  knew  of  that  prospectus, 
and  acted  as  treasurer  under  it.  How  can 
he,  after  this,  say  that  the  defendants  are 
liable  ?  The  question  for  our  considera- 
tion is,  whether  Col.  Jones  does  not  accede 


to  the  proposition,  that  the  defendants  are 
not  liable,  and  undertake  that  he  will  not 
look  to  them  as  responsible  ?  If  you  be- 
lieve the  evidence  in  the  sense  that  I  have 
taken  of  it,  I  tell  you,  that,  in  point  of 
law,  the  plaintiffs  are  not  entitled  to 
recover."  In  re  Worcester  Corn  Exchange 
Co.,  3  De  G.,  M.  &  G.  180  ;  Bailey  v. 
Clark,  6  Pick.  372.  See  also  Boardman 
V.  Gore,  15  Mass.  339  ;  Baxter  v.  Clark, 
4  Ired.  127  ;  Denny  v.  Cabot,  6  Met.  93  ; 
Jordan  v.  Wilkins,  3  Wash.  C.  C.  115; 
Dow  V.  Sayward,  12  N.  H.  271  ;  Cargill 
V.  Corby,  15  Mo.  425  ;  Langan  v.  Hewett, 
13  S.  &  M.  122  ;  Brent  v.  Davis,  9  Md. 
217.  In  Leavitt  v.  Peck,  3  Conn.  124, 
Hosnier,  C.  J.,  says  :  "  It  is  a  well-estab- 
lished principle,  that  the  contract  of  a 
partner  is  obligatory  for  his  copartner,  by 
virtue  of  an  implied  authority,  which 
may  be  rebutted  by  a  refusal  to  be  bound 
by  his  acts.  By  legal  consequence,  the 
partners  whose  authority  is  thus  declined 
cannot  bind  the  copartnership  in  favor  of 
those  who  have  knowledge  of  the  fact  .  .  . 
The  principle  under  consideration  is  not 
founded  at  all  on  any  supposed  waiver  of 
the  creditor,  but  solely  and  exclusively  on 
the  declaration  of  the  person  declining  to 
be  bound.  The  implied  authority  of  his 
partner  he  has  annihilated  ;  and  the  con- 
tract in  the  name  of  the  firm  is  of  no 
validity  beyond  the  personal  obligation  it 
imposes  on  the  individual  making  it." 
So  if,  upon  the  dissolution  of  a  copartner- 
ship, the  outgoing  partner  assigns  to  the 
continuing  partner  all  his  interest  in  the 
outstanding  partnership  debts  and  ac- 
counts, the  subsequent  release  of  a  debt 
by  the  outgoing  partner  to  a  debtor  hav- 
ing notice  of  the  agreement  is  void. 
Gram  v.  Cad  will,  5  Cowen,  489.  See  Ex 
parte  Harris,  1  Madd.  583. 

Partners  sometimes  give  notice  to 
particular  persons,  or  to  the  public  gen- 
erally,  that  they  are  not  responsible  for 


§  8^-] 


WHO    ARE   LIABLE    AS   PARTNERS    AS   TO    THIRD   PERSONS.      79 


question  whether,  in  any  particular  case,  an  alleged  partner  has 
disproved   the   evidence   or   rebutted   the   legal   presumption   of 


the  acts  of  one  or  more  of  the  other 
partners.  Such  repudiation  of  the  ordin- 
ary liabilities  of  a  partner,  especially  if  it 
be  with  reference  to  a  single  transaction, 
is  not,  perhaps,  necessarily  inconsistent 
with  the  continuance  of  the  [)artnership. 
But  it  more  commonly  happens  when  one 
or  more  of  the  partners  wishes  to  dissolve 
the  partnership  and  retire,  while  the  rest 
choose  to  continue  in  the  business.  Such 
warnings  by  partners  of  limitations  they 
mean  to  put  to  their  own  liability,  and  to 
the  authority  of  the  other  partners,  have 
the  same  effect,  so  far  as  third  persons  are 
concerned,  as  the  communication  of  stip- 
ulations between  partners  restricting  their 
liability,  and  upon  similar  principles. 
For,  a  partnership  being  once  proved  to 
exist,  and  the  implied  power  of  each  part- 
ner to  act  for  the  others  in  everything 
within  the  scope  of  the  partnership  busi- 
ness being  once  given,  the  fair  presump- 
tion upon  which  third  parties  are  justified 
in  acting  is,  that  the  partnership  and  the 
consequent  implied  authority  of  each 
partner  still  continue.  But  this  pre- 
sumption is  of  course  wholly  rebutted  by 
notice  to  the  contrary,  and  can  then  no 
longer  be  a  reason  for  holding  the  party 
giving  the  notice  to  liability  as  a  partner. 
In  Galway  v.  Matthew  &  Sniithson,  10 
East,  264,  the  defendants,  partners  in 
trade,  were  sued  upon  a  promissory  note. 
Matthew  let  judgment  go  by  default ;  but 
Smithson  defended  the  action  on  the 
ground  that  the  plaintiff,  before  he  took 
the  note  in  question,  had  notice  of  an 
advertisemrnt,  then  recently  published  in 
a  newspaper  by  Smithson,  wherein  he 
warned  all  persons  not  to  give  credit  to 
the  defendant  Matthew  on  his  (Smith- 
son's)  account,  and  that  he  would  no 
longer  be  liable  for  drafts  drawn  by  the 
other  partners  on  the  partnership  account. 
The  defendants  having  a  verdict  on  this 
ground  (Galway  v.  Matthew,  1  Camp. 
403),  upon  motion  to  set  aside  the  non- 
suit. Lord  EUenborough,  C.  J.,  said  : 
"  The  general  authority  of  one  partner  to 
draw  bills  or  yjromissory  notes  to  charge  an- 
other, is  onlyan  implied  authority;  and  that 
implication  was  rebutted  in  this  instance  by 


the  notice  given  by  Smithson,  who  is  now 
sought  to  be  charged,  which  reached  the 
plaintiff,  warning  him  that  Matthew  had 
no  such  authority.  It  is  not  essential  to  a 
partnership  that  one  partner  should  have 
power  to  draw  bills  and  notes  in  the  part- 
nership firm  to  chaige  the  others  :  they 
may  stij)ulate  between  themselves  that  it 
shall  not  be  done  ;  and  if  a  third  person, 
having  notice  of  this,  will  take  such  a  se- 
curity from  one  of  the  partners,  he  shall 
not  sue  the  others  upon  it,  in  breach  of 
such  stijiulation,  nor  in  defiance  of  a  notice, 
previously  given  to  him  by  one  of  them, 
that  he  will  not  be  liable  for  any  bill  or 
note  signed  by  the  others."  Layfield's 
Case,  1  Salk.  292  ;  Minnit  v.  Whinnery, 
2  Bro.  P.  C.  323,  16  Vin.  Abr.  244  ;  Ex 
parte  Harris,  1  Madd.  583  ;  Vice  v.  Flem- 
ing, 1  Y.  &  J.  227  ;  Rooth  v.  Quinn, 
7  Price,  193 ;  Feigley  v.  Sponeberger, 
5  Watts  &  S.  564  ;  Johnston  v.  Button, 
27  Ala.  245.  It  has,  however,  been  ques- 
tioned whether,  if  a  firm  consist  of  more 
than  two  members,  the  expressed  and 
known  dissent  of  one  partner  to  a  con- 
tract about  to  be  entered  into  in  good 
faith  by  a  majority  of  the  partners  in  the 
name  of  the  firm  will  operate  to  free  the 
dissenting  partner  from  liability  thereon. 
Story  on  Part.  §  123,  and  notes  ;  3  Kent 
Com.  45.  This  question  will  be  consid- 
ered when  we  come  to  treat  of  the  power 
of  a  majority  of  the  partners  to  bind  the 
partnership,  jjosf,  §  147.  In  one  case, 
indeed,  it  was  said  :  "By  the  act  of  enter- 
ing into  a  copartnership,  each  of  its  mem- 
bers becomes  clothed  with  full  power  to 
make  any  and  every  contract  within  the 
scope  and  limits  of  the  copartnership  busi- 
ness. All  such  contracts  will  therefore  be 
absolutely  binding  upon  the  several  mem- 
bers. Tins  power  is  incident  to  the  co- 
partnership relation,  and  must  exist,  in 
defiance  of  expostulations  and  oT)iections, 
while  the  relation  endures."  Wilkins  v, 
Pearce,  5  Denio,  541,  544.  But,  though 
the  judgment  in  this  case  was  affirmed  in 
the  Court  of  Appeals,  the  dictum  just 
quoted  does  not  appear  to  have  been  ap- 
proved. On  the  other  hand,  the  acts  of 
the  protesting  partner  subsequent  to  his 


80 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


authority  on  the  part  of  his  partner,  to  bind,  seems  to  be  a 
question  of  fact,  (tv) 

On  the  whole,  it  may  be  said  that  the  law-merchant,  as  it  is 
incorporated  into  the  common  law  of  England  and  of  this  country, 
does  not  permit  one  to  secure  to  himself  all  the  advantages  and 
gains  of  partnership,  and  guard  himself  against  all  its  liabilities 
and  losses  ;  and  that  his  attempt  to  do  so  would  be  defeated  by 
casting  upon  him  those  liabilities.  But  stipulations  are  often 
entered  into  which  must  be  understood  as  giving  up,  on  the  part 
of  all  the  partners,  or  of  a  part,  some  of  the  powers  and  advan- 
tages of  partnership,  and  providing  against  a  proportionate 
measure  of  liability  ;  and  any  stipulations  of  this  character  would 
undoubtedly  take  effect  as  far  as  they  were  known. 

Thus,  it  is  quite  common,  in  continental  Europe,  for  mercantile 
firms,  in  their  circulars  or  other  advertisements,  to  designate  one 
or   more  of  the  partners  as  alone  having  authority  to  put  the 


expression  of  dissent  were  held  to  amount 
to  a  waiver  of  it,  and  to  a  ratification  of 
the  transactions  to  which  he  had  originally 
objected,  s.  c.  2  N.  Y.  469,  472.  See 
opinion  of  Golden,  Senator,  in  Smith  ?'. 
Lasher,  5  Cow.  689,  710.  In  Willis  v. 
Dyson,  1  Stark.  164,  Lord  EUenborough 
held,  "that  after  notice  by  one  partner 
not  to  supply  any  more  goods  on  the  part- 
nership account,  it  would  be  necessary  for 
the  party  .sending  goods  after  such  notice 
to  prove  some  act  of  adoption  by  the  part- 
ner who  gave  the  notice,  or  that  he  had 
derived  some  benefit  from  the  goods."  This 
qualification  of  the  rule,  that  a  partner 
may  limit  his  liability  by  giving  notice  to 
that  effect,  though  reiterated  upon  the 
authoT'ity  of  this  case  by  some  of  the  writ- 
ers on  partnership  (see  3  Kent  Com.  8th 
ed.  49  ;  Gow  on  Part.  52),  seems  open  to 
considerable  question,  as  matter  of  princi- 
ple. Nor  does  it  appear  to  have  the  sup- 
port of  any  other  judicial  decision.  On 
the  contrary,  in  Galway  v.  Smithson,  su- 
pra, Matthew,  for  whose  acts  Smithson, 
his  partner,  had  given  the  plaintiff'  notice 
he  would  not  be  responsible,  had,  after 
the  notice,  borrowed  money  of  the  plaintiff, 
and  had  applied  it  mostly  to  the  payment 
of  partnership  debts.  Nevertheless.  Smith- 
son  was  held  not  liable  on  a  note  given  in 
the  partnershij)  name  for  the  sum  so  bor- 
rowed. So  in  Leavitt  v.  Peck,  3  Conn. 
124.     In  Monroe  v.  Conner,  15  Me.  178, 


Shepley,  J.,  after  an  examination  of  the 
point,  comes  to  the  conclusion  that  "it  is 
more  in  accordance  with  the  general  prin- 
ciples of  law,  and  with  good  faith  and  fair 
dealing,  to  hold  that  a  partner  is  not  bound 
by  a  contract  after  he  has  given  notice,  to 
the  party  proposing  to  make  it,  that  he 
■would  not  be  bound  by  it."  When  notice 
is  given  to  a  party  proposing  to  make  a 
certain  contract,  that  one  member  of  a  firm 
will  not  be  bound  by  the  action  of  the  other 
members,  if  the  party  thus  notified  still 
persi.sts  in  his  purpose,  and  completes  the 
contract,  he  must  be  presumed  to  have 
made  it  solely  on  the  credit  of  the  non- 
dissenting  partners.  But  we  shall  see 
later  (§  88),  that  where  credit  is  given 
to  one  or  more  of  the  individual  partners, 
the  other  partners  are  not  liable  on  such 
contracts,  even  though  they  inure  to  the 
benefit  of  the  partnership. 

(w)  Leavitt  v.  Peck,  3  Conn.  124; 
Willis  V.  Dyson,  1  Stark.  164  ;  Vice  v. 
Fleming,  1  Y.  &  J.  227.  See  authorities 
cited  above.  And  if  a  partner,  in  the 
presence  of  a  party  dealing  with  another 
partner  who  acts  in  the  name  of  the  firm, 
refuses  to  be  bound  by  the  transaction,  yet 
his  subsequent  acts  and  declarations  may 
amount  to  a  waiver  of  his  dissent,  and  to  a 
ratification  of  the  transaction  from  which 
he  thus  at  first  dissented.  Pearce  v.  Wil- 
kins,  2  N.  Y.  469. 


§  85.]       WHO    ARE   LIABLE    AS   PARTNERS   AS   TO    THIRD   PERSONS.      81 

name  of  the  firm  to  negotiable  paper.  If  a  firm  should  so  adver- 
tise in  this  country,  it  would  undoubtedly  prevent  any  person 
who  knew  of  it  from  holding  the  firm  on  the  signature  of  any 
other  member.  But  it  should  not  affect  one  who  did  not  know 
it;  because  he  migiit  fairly  imply  the  authority  of  each  partner 
from  the  partnership.  Formerly,  the  phrases  special  and  limited 
partnerships,  which  now  have  a  statute  meannig,  were  applied 
quite  loosely  to  those  which  were  less  general  than  usual  ;  (:r) 
and  it  was  always  held  that,  where  these  limitations  were  known 
to  a  customer,  he  was  affected  by  them  ;  ^  and  further,  that  this 
specialty  or  limitation  may  be  inferred  from  facts.  Limitations 
upon  the  authority  of  one  partner  to  represent  his  copartners 
may  also  be  imposed  by  the  nature  and  usages  of  particular 
trades. 

§  85.  Limitation  by  Trade  Usage.  Non-trading  Partnership.  — 
The  fact  that  a  partnership  is  engaged  in  a  particular  trade  being 
known,  is  sufficient  notice  to  third  persons  of  the  limitations 
which  the  nature  and  customs  of  that  trade  place  upon  the  power 
of  each  partner  ;2  and  third  parties  dealing  with  a  partner  in 
matters  outside  the  scope  of  its  usual  business,  to  charge  his  firm 
therein,  must  show  him  to  have  i)ossessed  special  authority  so  to 
act.  Thus,  it  has  been  held,  that  persons  who  are  engaged  in 
w^orking  a  mine  or  a  farm,  in  partnership,  give  no  implied  author- 
ity to  one  another  to  borrow  money  or  to  draw  bills  of  exchange 
on  joint  account  and  credit,  even  in  promotion  of  the  joint  busi- 
ness. Hence,  if  money  be  borrowed,  or  a  bill  be  drawn,  by  one 
of  several  persons   jointly    interested  in  a  farm  or  a  mine,  the 

(x)  See  Lansing  v.  Ten  Eyck,  2  Johns,  who  contracts  with  a  partner  in  a  matter 

304  ;  Miimford  v.  Nicoll,   20  Johns.  (524,  J'or  wliich  he  alone  is  responsible,  the  other 

629;  Bentley  v.  White,  3  B.  Mon.  2d3;  Key-  partners  are  not  liable.     Thus,  A.  and  B. 

nolds  V.  Cleaveland,  4  Cow.  282  ;   Lnsign  are  partners,  A.  agreeing  to  furnish  capital, 

V.  Wands,  1  Johns.  Cas.  171.    In  these  last  and  B.  labor  ;  and  C.  knowing  these  facts 

two  cases  the  word  "limited"  is  used  only  contracts  with  B.  to  perform  in  pail  the 

in  the   head-note.      Ensign   v.   Wand.s,   1  labor  which  B.  was  to  furnish.     ('.  nuist 

Johns.  Cas.  171  ;   De  Berkom   v.  Smith,  look  to  B.  for  his  conipen.sation.     Pollock 

1  Esp.  29  ;  Post  v.  Kimberly,  9  Johns.  489.  v.  Williams,    42    Miss.    88  ;    Newman    v. 

When,  by  the  terms  of  a  partnership,  the  Baker,  9  Johns.   207;  Medberry  v,  Soper, 

liability  of  each  partner  is  limited,   and  17  Kas.  369. 
this  limitation  is  known  to  a  third  person 

1  The  rights  of  third  persons  against  a  partnership  will  be  limited  by  the  special 
provisions  of  the  articles  of  copartnership  known  to  such  third  persons.  Smith  v. 
Vanderburg,  46  111.  34  ;  Knox  v.  Buffington,  50  la.  320.  So  where  a  guardian  was 
member  of  a  firm,  but  not  authorized  to  contract  firm  debts,  and  he  put  into  tlie  busi- 
ness money  of  his  ward,  making  a  firm  note  to  himself  as  guardian,  it  was  held  that  no 
recovery  could  be  had.     Wintermute  v.  Torrent,  83  Mich.  555,  47  N.  W.  358. 

2  Randall  v.  Meridith,  76  Tex.  669,  13  S.  W.  576. 

6 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


lender  or  holder  cannot  hold  the  other  partners  upon  it,  without 
showing  that  they  had  in  some  way  authorized  the  acting  partner 
so  to  bind  them,  (y)  ^ 


(//)  Dickiusoa  v.  Valpy,  10  B.  &  C. 
128 ;  Kiuibro  i-.  Bullitt,  22  How.  256  ; 
Ulery  v.  Giiirick,  57  Iil.  531  ;  Gieeiislade 
V.  Dower,  7  111.  635  ;  Kicketts  v.  Bennett, 
4  C  B.  686.  See  Shicknesse  v.  Broniilow, 
2  Cr.  &  J.  425  ;  Hawtayiie  v.  Bourne,  7 
M.  &  W.  59o  ;  Tredwen  v.  Bourne,  6  M. 
&  W.  461  ;  Howkeii  v.  Bourned,  8  M.  & 
\V.  703  ;  Burniester  v.  Korris,  6  Exch. 
796.  But  where  it  was  shown  that  it  was 
the  custom  of  planters  generally  to  borrow 


Ind.  133  ;  Garland  v.  Jacomh,  L.  K.  8 
Ex.  218.  In  Wisconsin,  after  a  careful 
review  of  the  authorities,  it  was  held  that 
one  member  of  a  uon-trading  partnership 
—  law  firm,  for  instance  —  cannot  bind 
his  copartner  by  a  bill  or  note,  drawn, 
accepted,  or  indorsed  by  him,  even  for  a 
debt  of  the  firm,  unless  specially  authorized 
by  his  copartner,  or  it  be  necessary  to 
carry  on  the  i)artnership,  or  it  be  shown  to 
be  usual  in  similar  partnerships  ;  and  the 


money  when  necessary  for  the  j)urposes  of    burden  of  proof  of  authority,  necessity,  and 


their  business,  it  was  held,  that  one  of  a 
firm  engaged  in  the  business  of  planting 
might  bind  his  copartners  by  borrowing 
money  for  their  business,  and  giving  a 
note  therefor.  Lea  v.  Guice,  13  S.  &  M. 
656.     And  in  McGregor  v.  Cleaveland,  5 


usage  is  upon  the  party  claiming  under  the 
note.  Smith  v.  Sluan,  37  Wis.  285  ; 
Hunt  V.  Chapin,  6  Lans.  139  ;  McCord  v. 
Field,  27  U.  C.  C.  P.  391  ;  Prince  v. 
Crawford,  50  Miss.  344.  In  like  manner, 
a  jiartner  in  the  practice  of  physic  is  not 


Wend.   475,  a  promissory  note  given   for     bound  by  a  note  drawn  by  his  copartner  in 


the  firm  by  one  of  two  partners  in  the 
business  of  farming  and  coopering  was 
held  good,  and  binding  upon  both.  "  An 
attorney,  qua  attorney,  is  not  a  scrivener  : 
it  is  part  of  his  business  to  prepare  convey- 
ances and  negotiate  mortgages,  and  see 
that  the  deeds  are  executed  and  the  trans- 
action completed.  A  scrivener  is  a  person 
who  receives  money  to  lay  out  upon  secu- 


the  name  of  the  firm,  for  the  purpose  of 
raising  money,  Crosthwait  v.  Ross,  1 
Humph.  23  ;  nor  by  any  other  of  his 
copartner's  contracts  which  are  not  con- 
nected with  their  business  as  physicians, 
Thompson  v..  Howard,  2  Ind.  245.  So  if 
four  are  interested  as  partners  in  two  shares 
of  the  stock  of  a  company  formed  for  dig- 
ging  tunnels,    the    peculiar   and    limited 


rity,  and  to  hold  the  money  in  his  hands  character  of  the  partnership  business  pre- 

until  an  opportunity  ofl'ers  for  laying  it  eludes  any  legal   implication   that  one  of 

out."     Hence,  where  two  are  in  partner-  the  partners  can  bind  the  others  by  issu- 

ship  merely  as  attorneys,  one  member  of  ing  commercial  paper  in  the  partnership 

the  firm  is  not  rendered  liable  as  partner  name.     Gray  v.    Ward,    18   111.   32.     See 

by  his  copartner's  receiving  money  indefi-  Cocke  v.  Branch  Bank,  3  Ala.  175,  respect- 

nitely  for  the  purpose  of  being  laid  out  on  ing  the  linutations  to  the  authority  of  one 

mortgage  security.     Harman  v.  Johnson,  of  a  firm  of  tavern-keepers.     In  re  Wor- 

2  E.  &  B.  61,  188.     See  Sims  v.  Brutton,  cester  Corn  Exchange  Company,  3  De  G., 

1  E.  &  B.  446  ;  Wilkinson  v.  Candlish,  19  M.  &  G.  180  ;  and  (.heeny  v.  Clark,  3  Vt. 

L.  J.  Rep.  Exch.  166.     So,  if  persons  are  431,  as  to  the  liability  of  members  of  a 

in   partnership  as  attorneys,  there  is   no  building  association.     See  also  Williams  v. 

imi)lied  authority  in  one  of  them  to  bind  Thomas,  6  Esp.  18  ;  Bentley  v.   White,  3 

the  rest  by  pledging  the  name  of  the  firm  B.    Mon.    263  ;    Vance    v.    Campbell,    8 

for    a   loan   of    money,    Breckenridge    v.  Hum])h.  524  ;  Lanier  v.    McCabe,  2   Fla. 

32  ;  Miller  v.  Hines,  15  Ga.  197  ;  Benson 


Shrieve,  4  Dana,  375  ;  Hedley  v.  Bain- 
bridge,  3  Q.  B.  316  ;  or  by  put- 
ting the  name  of  the  firm  in  any 
shape  to  negotiable  paper,  Levy  v.  Pyne, 
1  C.  &  M.  453.  See  Smith  v.  Cole- 
man, 7   Jur.    1053  ;  Wells  v.  Turner,   16 

1  Whether  an  act  is  outside  the  scope  of  a  certain  business  in  which  a  partnership 
is  engaged,  is  a  question  of  fact,  depending  upon  the  known  customs  and  usages  of  that 


V.  M'Bee,  2  McMullan,  91  ;  Goodman  v. 
White,  25  Miss.  163  ;  Cargill  v.  Corby,  15 
Miss.  425  ;  Lansing  v.  Gaine,  2  Johns. 
300.  In  Andrews  v.  Lehott,  10  Barr,  47, 
Andrews  &  Harris  had  agreed  to  fomi  a 


§  86.]      WHO    ARE    LIABLE    AS   PARTNERS    AS   TO    THIRD   PERSONS.      83 

§  86.  Limitation  by  Nature  of  Transaction.  —  A  limitation  or 
exception  niay  grow  out  of  the  nature  of  the  particular  transac- 

statutory  limited  partnership,  Harris  being  creditor  of  the  special  partnership  could 
the  special  partner.  With  that  view,  they  not  discharge,  the  special  partner  from  the 
had  placed  upon  record,  and  otherwise  general  liability  fixed  on  him  by  statute, 
published  to  the  world,  in  accordance  with  The  court  said:  "If  the  })laintifrs  knew 
the  ])rovisions  of  the  statute,  the  terms  of  they  held  themselves  out  as  a  limited 
their  connection.  A  subsequent  breach  of  partncrshii),  they  also  knew  that,  if  the 
the  statute  made  Harris  a  general  partner,  defendants  failed  to  coni{)ly  with  the  requi- 
in  an  action  against  both  the  partners  uj)on  sition  of  the  act,  they  became  general  part- 
contracts  made  in  the  name  of  the  copart-  ners,  and  were  liable  as  such.  Tlie 
nersiiip.  Harris  alleged  in  defence  that  presumption  is,  that  the  contract  was 
the  plaintilF,  at  the  time  the  contracts  made  in  reference  to  the  legal  rights  of  the 
were  made,  knew  he  was  a  special  partner,  parties  ;  and  this  presumption  can  alone 
and  gave  credit  to  the  firm  and  the  general  be  rebutted  by  clear  proof  of  an  express 
partners,  and  did  not  rely  on  him.  But  it  contract,  waiving  all  the  plaintiffs  rights 
was   held,   that   this    knowledge    by   the  under  the  statute." 

business.  If  these  customs  and  usages  authorize  a  partner  to  do  such  an  act  on  behalf 
of  the  firm,  he  may  bind  the  firm  by  the  act.  Alabama  Fertilizer  Co.  v.  Reynolds,  79 
Ala.  497 ;  Pease  v.  Cole,  53  Conn.  53  ;  Judge  v.  Braswell,  13  Bush,  67  ;  Nat.  State 
Capital  Bank  v.  Noyes,  62  N.  H.  35  ;   Biggs  v.  Hubert,  14  S.  C.  620. 

If  the  act  is  necessary  for  carrying  on  the  business,  it  is,  of  course,  within  the  scope 
of  the  business.  Nat.  Exchange  Bank  v.  White,  30  F.  R.  412 ;  Deardorf  v.  Thacher, 
78  Mo.  128  ;  Levi  v.  Latham,  15  Neb.  509,  19  N.  W.  460.  If  the  act  is  not  within 
the  apparent  scope  of  the  business,  the  firm  is  not  bound  except  upon  evidence  of 
express  or  implied  authority  of  all  the  partners,  or  ratification  by  them.  Such 
authority  or  ratification,  however,  makes  the  firm  liable.  Pease  v.  Cole,  53  t'onn.  53  ; 
Judge  V.  Braswell,  13  Bush,  67  ;  Holmes  v.  Kortlander,  64  iMich.  591,  31  N.  W.  532  ; 
Conely  v.  Wood,  73  Mich.  203,  41  N.  W.  259  ;  Deardorf  v.  Thacher,  78  Mo.  128  ; 
Nat.  State  Capital  Bank  v.  Noyes,  62  N.  H.  35  ;  Clarke  v.  \Vallace,  1  N.  D.  404,  48 
N.  W.  339. 

The  burden  is  on  the  plaintitf  to  prove  authority  or  ratification.  Judge  v.  Braswell, 
13  Bush,  67;  Van  Dyke  v.  Seelye  (Minn.)  52  X,  "W.  215. 

The  payment  of  a  stranger's  debt  is  not  within  the  scope  of  a  partnership  business  ; 
consequently  a  firm  note  given  by  a  partner  for  the  accommodation  of  a  stranger  is  not 
valid  in  the  hands  of  one  with  notice.  Heffron  v.  Hanaford,  40  Mich.  305  ;  Van  Dyke 
I'.  Seelye  (Alinn.),  52  N.  W.  215. 

So  a  promise  by  one  partner  in  the  name  of  the  firm  to  pay  the  debt  of  a  third  party 
is  not  valid  against  the  firm.     Shaaber  v.  Bushong,  105  Pa.  514. 

So  one  partner  cannot  bind  the  firm  by  guaranteeing  the  note  or  other  debt  of  a  third 
party.  Osborne  v.  Stone,  30  Minn.  25,  13  N.  'W.  922  ;  Osborne  v.  Thompson,  35  Minn. 
229,  28  N.  W.  260  ;  Clarke  v.  Wallace,  1  N.  D.  404,  48  N.  W.  339  ;  Fore  v.  Hittson, 
70  Tex.  517,  8  S.  W.  292.  This  is  true  even  in  case  of  guaranty  of  the  rent  of  an 
employee  of  the  firm,  Avery  v.  Rowell,  59  Wis.  82,  17  N.  W.  875  ;  or  of  a  promise  to 
pay  the  medical  expenses  of  an  employee.  Woodruff  v.  Scaife,  83  Ala.  152,  3  So,  311. 
Where,  however,  a  partnership  bought  out  a  manufacturing  business,  and  one  partner 
agreed  with  the  workmen  that  if  they  would  continue  at  work  the  firm  would  pay  their 
arrears  of  wages,  this  was  held  to  be  within  the  scope  of  the  firm's  business,  and  to  bind 
the  firm.     "Wills  v.  Cutler,  61  N.  H.  405. 

As  to  acts  within  the  scope  of  a  partnership,  a  fundamental  distinction  exists  between 
commercial  or  trading  partnerships  and  non-trading  partnerships  ;  arising  out  of  the 
fact  that  in  a  non-trading  partnership  there  is  no  general  power  in  the  partners  to  do 
such  acts  as  are  customary  in  carrying  on  business. 

Thus  a  partner  in  a  non-trading  partnership  does  not  generally  have  power  to  bind 


84  THE   LAW   OF   PARTNERSHIP.  [CH,    VI. 

tion.  Thus,  if  a  partner  of  a  firm  which  deals  only  in  merchandise 
eives  the  note  of  the  firm  for  a  horse,  it  would  be  a  fair  presump- 
tion that  the  party  receiving  it  —  if  he  knew  the  general  busiiiess 

the  firm  by  signing  the  firm  name  to  commercial  paper  given  for  borrowed  money. 
This  rule  has  been  held  to  apply  in  the  following  sorts  of  business  :  — 

Farming,  Greenslade  v.  Dower,  7  B.  &  C.  635  ;  Kimbro  v.  Bullitt,  22  How.  256. 

Practising  law,  Hedley  v.  Bainbridge,  3  Q.  B.  316  ;  Levy  v.  Pyne,  Car.  &  M.  453  ; 
Friend  v.  Duryee,  17  Fla.  Ill  ;  Breckinridge  v.  Shrieve,  4  Dana,  375  ;  Rogers  v.  Priest, 
74  Wis.  538,  43  N.  W.  510. 

Carrying  on  saw-mill,  Dowliug  v.  Exchange  Bank,  145  U.  S.  512  (but  see  Kimbro 
V.  Bullitt,  22  How.  256). 

Keeping  tavern,  Cocke  v.  Bank,  3  Ala.  175. 

INlanagiug  a  theatre.  Pease  v.  Cole,  53  Conn.  53,  22  Atl.  681. 

Carrying  ou  mill,  Lanier  v.  McCabe,  2  Fla.  32. 

Digging  tunnels.  Gray  v.  Ward,  18  111.  32. 

Printing,  Bays  v.  Conner,  105  Ind.  415,  5  N.  E.  18. 

"Working  threshing-machine,  Horn  v.  Newton  City  Bank,  32  Kas.  518,  4  Pac.  1022. 

Real  estate,  Lee  v.  First  Nat.  Bank,  45  Kas.  8,  25  Pac.  196  ;  Deardorf  v.  Thacher, 
78  Mo.  128. 

Mining,  Judge  v.  Braswell,  13  Bush,  67  ;  Randall  v.  Merideth,  76  Tex.  669,  13 
S.  W.  576.  (Aliter  of  a  commercial  parnership  for  currying  on  a  mine.  Decker  v. 
Howell,  42  Cal.  636.) 

Planting,  Benton  v.  Roberts,  4  La.  Ann.  216  ;  Prince  v.  Crawford,  50  Miss.  344  ; 
Morgan  v.  Pierce,  59  Miss.  210. 

Keeping  livery  stable,  Levi  v.  Latham,  15  Neb.  509,  19  N.  W.  460. 

Sugar  refining,  Livingston  v.  Roosevelt,  4  Johns.  251. 

Practising  medicine,  Crosthwait  v.  Ross,  1  Humph.  23. 

Publishing,  Pooley  v.  Whitmore,  10  Heisk.  629. 

On  the  other  hand,  the  firm  has  been  held  liable  on  firm  paper  made  by  one  partner, 
where  the  business  was  collecting.  Van  Brunt  v.  ilather,  48  la.  503  ;  and  soap-making, 
Deitz  V.  Regnier,  27  Kas.  94. 

So  a  partner  in  a  non-trading  firm  cannot  ordinarily  borrow  money  so  as  to  make 
the  firm  liable.  Harris  v.  Baltimore,  73  Md.  22,  20  Atl.  Ill  (street  improvement)  ; 
Williams  v.  Gillies,  75  N.  Y.  197  (purchase  of  land  on  speculation). 

Where  the  object  of  a  non-trading  partnership  is  not  to  sell,  one  partner  cannot  sell 
firm  property  so  as  to  pass  all  the  interest  of  the  firm.  Lowman  v.  Sheets,  124  Ind. 
416,  24  N.  E.  351  (keeping  mare  for  breeding  purposes)  ;  Blaker  v.  Sands,  29  Kas.  551 
(improving  breed  of  sheep). 

Where  a  partnership  is  formed  for  a  certain  purpose,  one  partner  has  no  power  to 
bind  the  firm  by  engaging  in  Inisiness  of  another  sort.  So  a  partner  in  a  commercial 
firm  cannot  bind  the  firm  by  taking  a  promissory  note  for  collection.  Pickels  v. 
McPherson,  59  Miss.  216. 

On  the  other  hand,  when  a  firm  has  become  the  owner  of  a  chattel  mortgage  and  has 
foreclosed,  one  partner  may  bind  the  firm  by  creating  an  agency  to  sell  the  mortgaged 
goods.  Banner  Tobacco  Co.  v.  Jenison,  48  Mich.  459,  12  N.  AV.  655.  And  where  a 
firm  was  formed  to  build  a  building  according  to  certain  plans,  one  partner  in  contract- 
ing for  extra  work  is  actinic  within  the  apparent  scope  of  the  firm  business,  and  binds 
the  firm.     Hoftinan  v.  Toll  (Ind. ),  28  N.  E.  557. 

Where  there  are  written  articles,  the  question  whether  a  certain  line  of  business  is 
contemplated  by  the  articles,  and  therefore  within  the  scope  of  the  partnership,  is  for 
the  court.     Banner  Tobacco  Co.  v.  Jenison,  48  Mich.  459,  12  N.  W.  655. 

Where  a  partner  does  an  unauthorized  act  in  such  a  way  that  the  firm  is  not  bound 
it  is  valid  as  against  the  acting  partner,  and  (if  a  sale)  passes  his  interest  in  the  prop- 
erty. Lowman  v.  Sheets,  124  Ind.  416,  24  N.  E.  351  ;  Blaker  v.  Sands,  29  Kas.  551  ; 
Rogers  v.  Priest,  74  Wis.  538,  43  N.  W.  510. 


§  87. J       WHO    ARE   LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.      85 


of  the  firm  —  should  have  supposed  that  the  partner  had  no 
authority  to  give  such  a  note,  (z)  The  rule  itself,  which  gives  to 
a  partner  his  authority,  limits  it,  in  perhaps  all  the  authorities 
which  assert  the  rule,  to  contracts  or  acts  within  or  helonging  to 
the  business  of  the  firm.  The  reason  of  this  is  perfectly  obvious; 
and  it  would  follow  that  as  partners  may  certainly  limit  their 
business  as  they  please,  by  so  doing  they  place  an  analogous  lim- 
itation to  the  authority  of  the  partners,  in  reference  to  any  one 
knowing  the  limitation  of  their  business. 

§  87.  General  Rule  a  Safeguard  against  Fraud.  — One  reason  why 
all  the  {jartncrs  are  bound  by  the  acts  of  one,  is,  that  great  and 
inevitable  frauds  would  spring  from  the  want  of  this  rule.  Thus, 
it  would  always  be  easy  for  a  firm  doing  the  largest  business  to 
have  one  partner  (entitled  to  a  very  small  share)  without  means, 
and  therefore  without  risk,  who  should  sign  all  their  paper  and 
execute  all  their  contracts ;  the  other  partners  taking  all  the 
profits  and  casting  all  the  losses  on  him.  But  it  would  as  cer- 
tainly be  a  fraud,  if  a  customer,  who  knew  that  a  partner  with 
whom  he  dealt  had  no  authority  to  act  for  his  partners  in  a  cer- 
tain way  or  on  certain  terms,  should  nevertheless  make  that  very 
bargain  with  him,   relying  on  the    j-esponsibility   of    the    other 


(;)  Holmes  v.  Burton,  9  Vt.  252 ; 
Liviiig.ston  v.  Hoosevelt,  4  Johns.  251. 
In  this  last  case  A.  &  B.  formed  a  copart- 
nership under  the  style  of  A.  &  Co.,  in 
the  business  of  sugar-refining,  and  so 
advertised  the  public.  B.  afterwards, 
without  the  knowledge  of  A.,  bought  a 
quantity  of  brandy,  for  which  he  gave  his 
note,  payable  to  the  firm,  and  indorsed  by 
him  with  the  name  of  the  firm.  The 
plaintiff,  the  indorsee  of  said  note,  took 
both  the  newspapers  in  which  the  charac- 
ter of  the  business  of  A.  &  Co.  was  ad- 
vertised. The  question  in  the  case  being 
whether  the  copartnership  was  liable  on 
the  above  note,  Kent,  C.  J.,  said;  "All 
partnerships  are  more  or  less  limited. 
There  is  no  one  that  embraces,  at  the 
same  time,  every  branch  of  business  ;  and 
when  a  person  deals  with  one  of  the  part- 
ners in  a  matter  not  within  the  scope  of 
the  partnership,  the  intendment  of  law- 
will  be,  that  he  deals  with  him  on  his 
private  account,  notwithstanding  the  part- 
ner may  give  the  partnership  name,  unless 
there  be  some  circumstances  in  the  case 
to  destroy  that  presumption.  *  If,'  said 
Lord  Eldon  (8  Vesey,  p.  544),   '  under  the 


circumstances,  the  person  taking  the  pa- 
per can  be  considered  as  being  ad%-ertised 
that  it  was  not  intended  to  be  a  partner- 
ship proceeding,  the  partnership  is  not 
bound.'  Public  notice  of  the  object  of 
a  copartnership,  the  declared  and  habitual 
business  carried  on,  the  store,  the  count- 
ing-house, the  sign,  &o.,  are  the  usual 
and  regular  indicia  by  which  the  nature 
and  extent  of  a  partnership  are  to  be 
ascertained.  When  the  business  of  a 
jiartnership  is  thus  defined  and  publicly 
declaied,  and  the  company  do  not  depart 
from  that  particular  business,  nor  appear 
to  the  world  in  any  other  light  than  the 
one  thus  exhibited,  one  of  the  partners 
cannot  make  a  valid  partnership  engage- 
ment on  any  other  than  a  partnership 
account.  There  must  be  some  authority, 
beyond  the  mere  circumstance  of  partner- 
ship, to  make  such  a  contract  binding." 

[A  partnership  for  raising  and  selling 
agricultural  seeds  is  not  bound  by  the 
purchase  by  one  partner  of  a  number  of 
roses  and  other  flowers,  since  such  a  pur- 
chase is  not  within  the  apparent  scope  of 
the  business.  Sargent  v.  Henderson,  79 
Ga.  268,  5S.  E.  122.] 


86  THE   LAW   OF   PARTNERSHIP.  [CH.    VI. 

partners,  (rt)  A  firm  may  undoubtedly  permit  one  of  the  part- 
ners to  act  in  his  own  name,  but  for  the  interest  and  benefit  of 
the  firm,  and  then  any  loss  in  such  transaction  is  a  loss  of  the 
firm.  As  where  one  partner  deposited  the  funds  of  the  firm  in  a 
bank  in  his  own  name,  with  the  consent  and  for  the  convenience 
of  the  firm,  and  the  funds  were  charged  to  him  in  the  books  of 
the  firm,  but  only  to  indicate  in  whose  hands  they  were,  and  the 
bank  became  insolvent, — it  was  held  to  be  the  loss  of  the  firm, 
and  not  of  the  partner,  (aa^ 

We  have  already  seen  that  any  stipulations  between  partners 
bind  them,  and  there  is  nothing  to  prevent  them  from  agreeing 
that  one  shall  share  all  the  profits,  but  that  the  others  shall  bear 
all  the  losses.  This,  however,  will  not  prevent  a  creditor  of 
the  firm  from  suing  all,  nor  from  levying  an  execution  on  the 
property  of  the  partner  thus  exempted,  unless  the  creditor  had 
knowledge  of  the  agreement,  and  made  his  bargain  with  the  firm 
so  far  in  acceptance  of  and  accordance  with  that  agreement,  that 
he  must  be  taken  not  to  have  given  any  credit  to  the  exempted 
partner.  If  that  partner  is  made  to  pay  any  share  of  loss,  by  the 
general  law  of  partnership,  he  can  turn  round  upon  his  partners, 
under  their  agreement,  and  recover  it  from  them. 

It  is  well  established  that  if  a  partner,  in  direct  violation  of  his 
stipulations  as  partner,  or  in  fraud  of  the  partnership,  enters  into 
any  contract  on  their  part  with  a  third  person,  the  partners  are 
not  discharged  by  his  breach  of  contract,  or  by  his  fraud,  unless 
the  third  person  was  participant  or  conusant  of  it.  (^)  ^ 

(a)  To  a  similar  effect  is  the  language  famil}',  —  it  could  not  be  supposed  by  any 

of  Kent,  C.  J.,  in  Livingston  v.  Roosevelt,  one  that  the  company  would  be  holden. 

4  Johns.  278,  279.     He  says  that  where  These  would   be   plain   cases  of  a  fraud, 

the  particular  business  of  a  firm  is  made  practised    upon   the    firm,    of   which   the 

known  in  a  usual  and  reasonable  way  to  creditor  would  be  chargeable  with  notice, 

the   public,    "the   creditor  is    advertised  When  the  public  have  the  usual  means  of 

that  he  is  not  dealing  on  a  partnership  ac-  knowledge    given    them,    and    no    means 

count ;   and  for  him  to  take  a  partnership  have  been  suffered  by  the  partnership  to 

engagement,   without  the  consent  of  the  mislead  them,  every  man  is  to  be  presumed 

firm,  is,  in  judgment  of  law,  a  fraud  upon  to   know   the   extent   of    the   partnership 

the  firm.     Suppose,  in  the  case  of  a  gen-  with  whose  member  he  deals."     Dow  v. 

eral    commercial    ])artnership,  a  debt  was  Sayward,  12  N.  H.  275.     See  Bignold  v. 

to  be  contracted  by  one  partner  upon  the  Waterhouse,  1   Moore  &  S.  259  ;  Maltby 

purchase  of  new  lands;  or  suppose,  in  the  v.  N.  W.  &  R.  Co.,  16  Md.  422. 
case  of  a  partnership  between   two  attor-  {aa)  Campbell  v.  Stewart,  34  111.  151. 

ueys,  in  law  business,  a  partnership  note  (b)  See  pod,    ch.    7,  "  Of  the   Rights 

was  to  be  given  by  one  of  them  uyion  the  and   Duties  of    Partners  between    Theni- 

purchase  of  groceries  or  furniture  for  his  selves."     And   see  Salland   v.   McRae,  16 

1  Where  a  partner,  acting  within  the  scope  of  his  authority,  borrows  money  in  the 
name  of  the  firm,  a  misuse  of  the  money  by  the  partner  does  not  excuse  the  firm 


§  87.]       WHO    ARK    LIABLE   AS    PARTNERS   AS   TO   THIRD   PARTIES.       87 

We  add,  that  the  person  so  dealhig  with  a  fraudulent  partner, 
ill  actual  ignorance  of  the  fraud,  but  in  an  ignorance  which  implies 
gross  negligence  on  his  part,  should  not  be  permitted  to  hold  the 
lirm.  This  would  be  an  inference  from  the  principles  of  agency. 
This  rule  has  been  applied  to  the  holder  of  negotiable  paper, 
and  should  be  applied  to  every  one  dealing  with  such  partner,  (c) 


La.  Ann.  193  ;  Stockwell  v.  Dillingliam, 
5U  Me.  442  ;  Mechaiii(!s'  Bank  v.  Foster, 
44  Bail).  87  ;  Gale  v.  Miller,  44  Barb.  420  ; 
Tillbrd  v.  Ramsey,  37  Mo.  563  ;  Haywanl 
V.  French,  12  Gray,  453  ;  Sterling  v. 
Jamlon,  48  Barb.  459  ;  Blodgett  v.  Weed, 
119  Mass.  215  ;  [Andrews  v.  Conger,  2o  U. 
S.  Supr.  Ct.  (L.  Co.  op.  Ed.)  90  ;  Nat. 
Exchange  Bank  v.  White,  30  F.  R.  412  ; 
Humes  y.  O'Bryan,  74  Ala.  64;  Manville 
V.  Parks,  7  Col.  128  ;  Lynch  v.  Thonii)- 
son,  61  Miss.  354  ;  Benninger  v.  Hess,  41 
Oh.  St.  64.]  See  also  Guild  v.  Welch,  119 
Mass.  257.  A  ])artner  cannot,  for  a  pri- 
vate consideration,  discharge  a  debtor  of 
the  firm,  by  an  agreement  to  pay  the 
debtor's  note  to  the  firm.  Lewis  v.  West- 
uer,  29  Mich.  14.  If  a  partner  pays  his 
[)rivate  debts  by  receipting  a  bill  due  from 
his  creditor  to  the  firm,  the  firm,  or  its 
assignee,  may  nevertheless  recover  the 
amount  of  their  bill.  Thomas  v.  Penn- 
rich,  28  Ohio  St.  55.  If  the  appropriation 
by  one  partner  of  partnership  property  to 
pay  his  private  debt,  be  made  and  received 
in  good  faith  and  under  such  circumstances 
that  the  other  i)artners  and  the  creditors 
are  not  defrauded,  the  money  so  appropri- 
ated cannot  be  recovered  back.  Corwiu 
V.  Suydam,  24  Ohio  St.  210. 

(c)  Lloyd  V.  Freshlicld,  2  C.  &  P.  325  ; 
New  York  Fire  Insurance  Co.  v.  Bennett, 
5  Conn.  574.  In  this  last  case,  Hosmer, 
C.  J.,  says  :  "  It  is  now  insisted,  that  the 
payee  of  a  promissory  note,  although  he 
has  knowledge  that  the  maker  or  indorser 
in  the  name  of  the  firm  is  making  pay- 


ment by  this  act  of  his  own  debt,  or  is 
becoming  the  surety  of  another  jierson, 
without  the  concurrence  ot  his  partner-, 
and  that  neither  the  partnership  covenant 
nor  the  interest  of  the  partnership  sanc- 
tions the  act,  yet  that  he  has  a  right  to 
subject  the  partnership.  The  principle, 
in  direct  hostility  with  justice  and  conve- 
nience, is  endeavored  to  be  sustained  by 
tiie  unwarranted  supposition,  that  the 
payee,  not  having  knowledge  that  special 
authority  was  not  given  the  partner,  may 
fold  his  arms,  and  reap  a  benefit  from  his 
supineness.  Common  sense  and  commou 
integrity  require  that  he  .should  make  in- 
(juiry,  in  such  cases,  and  actually  know 
that  authority  was  given.  He  is  bound, 
on  legal  and  fair  principles,  to  sustain  the 
affirmative.  He  knows  that  the  partner- 
ship is  for  mercantile  operations.  He 
knows  that  the  partner,  signing  or  indors- 
ing a  note  in  the  name  of  the  firm,  from 
the  partnership  contract,  had  no  implied 
authority.  He  knows  that  the  act  can  alone 
be  authorized  by  the  delegation  of  express 
power.  And  he  knows  that  on  the  most 
common  and  best-established  principles,  in 
promotion  of  justice  and  prevention  of 
fraud,  the  person  claiming  the  obligation  of 
contract  against  a  partnership  is  bound  to 
prove  it."  See  Warren  i\  French,  6  Allen, 
317;  Kimball  v.  Walker,  30  111.  482; 
Duncan  v.  Lewis,  1  Duvall,  183  ;  Sims  v. 
Smith,  12  Rich.  L.  685.  Whether  the 
plaintiff  suing  on  such  a  note  had  such 
notice  as  ought  to  put  him  on  inquiry,  is 
a  question  for  the  jury.     Waite  v.  Thnyer, 


from  liability.  National  Bank  of  Commerce  v.  Meader,  40  Minn.  32.5,  41  N.  W. 
1043;  Kleinhaus  v.  Generous,  25  Oh.  St.  667;  Gilchrist  i;.  Brande,  58  Wis.  184,  15 
fN.  W.  818. 

The  declaration  of  the  partner  at  the  time  of  making  a  contract  that  it  is  for  the 
firm  is  enough  to  charge  the  firm,  if  the  contract  is  within  the  apparent  i^cope  nf  the 
business.  Clark  v.  Taylor,  68  Ala.  453  ;  Dodds  v.  Rogers,  68  Ind.  110  ;  Smith  v. 
Collins,  115  Mass.  388  ;  Benninger  v.  Hess,  41  Oh.  St.  64  ;  Gavin  v.  Walker,  14  Lea, 
643. 


THE   LAW    OF   PARTNERSHIP. 


[CH.    VI. 


§  88.  Credit  Given  to  one  Partner  Only.  —  He  who  gives  credit 
to  one  partner  alone,  cannot  call  on  the  rest.  This  is  true,  how- 
ever the  credit  be  given.  As,  if  the  creditor  sold  him  goods  ;  {d) 
or  sold  to  another  goods  on  his  guaranty  ;  or  received  him  as 
surety  in  any  way,  or  loaned  him  money,  {e)  If  there  is  no 
evidence  to  show  to  whom  credit  was  given,  the  fact  that  nionev 


118  Mass.  473.  The  burden  of  proof  tluit 
a  note  given  iii  tiie  tirm  name  by  one  of 
tlie  partners  is  not  on  partnership  account, 
is  on  the  partnership.  Currier  v.  lame- 
rou,  31  Mich.  373. 

{li)  As  where  goods  for  the  use  of  a 
stage-coach  are  supplied  to  one  of  several 
partneis  in  a  stage-coach  line  by  one 
knowing  that  the  agreement  between  them 
is  that  each  shall  run  and  stock  a  particu- 
lar portion  of  the  road  at  his  own  expense. 
Hiard  v.  Bigg,  Mann.  N.  P.  Index,  Part- 
ners, A.  («).  5;  Barton  v.  Hanson,  2  Camp. 
97  ;  2  Taunt.  49.  So  where  L.  &  C,  by 
articles,  entered  into  partnership  for  the 
manufacture  of  hemp ;  L.  to  find  the 
stock,  and  C.  to  furnish  the  machinery 
and  operatives.  The  plaintiff's  slave  was 
employed,  by  C.  alone,  in  the  business  of 
the  firm,  and  the  present  action  was  as- 
sumpsit against  the  partners  for  the  value 
of  his  services.  The  jilaintitf,  as  the  only 
evidence  of  the  lialnlity  of  the  firm,  ex- 
hibited tlie  articles  of  copartnership,  pro- 
viding for  the  arrangement  above  stated. 
It  was  held  that,  in  the  absence  of  evi- 
dence to  the  contrary,  the  plaintiH  must 
be  presumed  cognizant  of  the  duty  of  C. 
to  furnish  hands,  and  to  have  contracted 
solely  npon  the  credit  of  C;  to  whom 
alone,  therefore,  he  could  look  for  pay- 
ment. Lafon  V.  Chinn,  6  B.  Mon.  305. 
See  Pinckney  v.  Keyler,  4  E.  D.  Smith, 
469.  In  Young  v.  Hunter,  4  Taunt.  583, 
Gibbs,  ,T.,  said  :  "  I  am  b\'  no  means  of 
opinion  that  there  may  not  be  a  case  where 
two  houses  shall  be  interested  in  goods 
from  the  beginning  of  the  purchase,  yet 
not  be  both  liable  to  the  vendor  :  as  if  the 
parties  agree  amongst  themselves  that  one 
house  shall  purchase  the  goods  and  let  the 
other  into  an  interest  in  them,  that  other 
being  unknown  to  the  vendor ;  in  such  a 
case  the  vendor  coitld  not  recover  against 
him,  although  such  other  person  would 
have  the  benefit  of  the  goods."     See  fur- 


ther Saville  v.  Robertson,  4  T.  K.  725; 
Gibson  V.  Lupton,  9  Bing.  297  ;  Ex  parte 
Hairis,  1  Madd.  583  ;  Hokroft  v.  Hog- 
gins, 2  C.  B.  488  ;  Sylvester  v.  Smith, 
9  Mass.  121  ;  Holmes  v.  Burton,  9  Vt. 
252;  Ketchum  v.  Durkee,  1  Hoff.  Ch. 
528  ;  Watt  v.  Kirby,  15  111.  200  ;  Meyer 
V.  Larkin,  3  Cal.  403.  In  Joluistcm  v. 
Warden,  3  Watts,  101,  the  court  instructed 
the  jury  :  "That  if  A.  contract  with  B.  to 
deliver  articles  at  a  sjiecified  period,  and  if 
in  the  intermediate  time  B.  and  C.  enter 
into  a  partnership,  as  upon  such  a  con- 
tract, it  is  to  be  presumed  that  payment  is 
to  accompany  delivery  ;  if  credit  is  given 
at  the  time  of  delivery,  it  must  be  pre- 
sumed to  be  done  upon  the  credit  of  the 
partners,  and  this  whether  the  existence 
of  the  partnership  was  known  to  the  plain- 
tiff who  gave  the  credit  or  not.  If  the 
existence  of  the  partnership  was  known  at 
the  tin)e  no  doubt  could  be  raised  ;  but  if 
a  credit  be  given  whei'e  there  is  a  secret 
|)artner,  as  the  credit  is  supposed  to  be 
given  as  well  to  him  as  to  those  associated 
with  him,  npon  the  giound  that  he  is  en- 
titled to  the  jirofits,  so  he  in  equity  should 
be  responsible  for  the  loss  in  the  present 
case." 

(c)  Fx  park  Hunter,  1  Atk.  223  ; 
Parkin  v.  Carruthers,  3  Esp.  248,  per 
Le  Blanc,  J.  ;  Lloyd  v.  Freshfield,  2  C.  & 
P.  325 ;  Bevan  v.  Lewis,  1  Sim.  376  ; 
I\Iurray  v.  Somerville,  2  Gamp.  99  ;  Le 
Roy  V.  Johnson,  2  Peters,  186  ;  Mifflin  v. 
Smith,  17  S.  &  R.  169;   Willis  v.   Hill, 

2  Dev.  &   Bat.    231  ;    Foley  v.    Kobards, 

3  Led.  177  ;  Bird  v.  Lanius,  4  Wis.  615  ; 
Clay  V.  Cottrell,  18  Pa.  408  ;  Wiggins  v. 
Hammond,  1  Mo.  121  ;  Siegel  v.  Chidsey, 
28  Mo.  279  ;  Miller  v.  Morrice,  6  Hill, 
114  ;  Holmes  v.  Burton.  9  Vt.  252  ;  Evans 
V.  Biddleman,  3  Cal.  435  ;  Logan  v.  Bond, 
13  Ga.  192  ;  Foster  v.  Hall,  4  Humj.h. 
346  ;  Jaques  v.  Marquand,  6  Cow.  497  ; 
Whitaker  v.  Brown,  16  Wend.  505. 


§88.] 


WHO    ARE    LIABLE    AS    PARTNERS    AS    TO    THIRD    PARTIES. 


89 


l)orro\ved  by  a  partner  comes  to  the  use  of  a  firm  raises  a  pre- 
sianptiou  that  the  loan  was  made  by  liini  as  partner,  and,  if  not 
rebutted,  will  make  the  firm  liable  for  the  repayment.  (/)  If  the 
creditor  sold  goods  or  loaned  money  to  every  one  of  the  partners 
severally,  on  their  several  credit,  he  could  not  recover  of  them 
jointly,  nor  hold  them  mutually  responsible,  although  the  money 
or  the  goods  were  immediately  used  by  the  borrowers  or  buyers 
to  make  up  the  stock  of  the  firm,  or  provide  for  its  debts  or 
business.  (^)  ^ 


(/)  Jaques  V.  Maniuaiul,  6  Cow.  497; 
Rothwell  I'.  Huinphreys,  1  Esp.  406  ; 
Church  V.  Sparrow,  5  Wend.  223  ;  Whit- 
aker  v.  Brown,  16  Wend.  505.  If  for 
money  borrowed  a  partner  gives  his  own 
bill,  or  note,  or  other  simple  contract  se- 
curity, and  suit  is  brouglit  directly  upon 
such  individual  security,  "  it  cannot  be 
allowed  to  supply  by  inten(hnent  the  names 
of  others,  in  order  to  chaige  them"  ([)er 
Lord  Ellenborough,  C.  J.,  in  Emly  v.  Lye, 
15  East,  7)  ;  Skitfkin  v.  Walker,  2  Camp. 
308  ;  Ex  parte  Brown,  1  Atk.  225,  cited  ; 
Ex,  parte  Bolitho,  Buck,  103  ;  though  upon 
the  connnon  money  counts  the  partnership 
may  be  charged,  if  the  obligation  of  the 
borrowing  partner  was  meant  to  be  taken, 
not  in  lieu  of,  but  simply  in  connection 
with  the  partnership  liability.  Ibid.  ; 
Denton  v.  Rodie,  3  Camp.  493  ;  Tucker  v. 
Peaslee,  36  N.  H.  167.  If,  however,  the 
obligation  of  one  partner  be  thus  taken, 
not  as  a  collateral,  but  as  the  sole  security 
for  the  money  loaned,  the  credit  must  be 
deemed  to  have  been  given  solely  to  that 
partner,  and  the  lender  cannot  recover  for 
money  had  and  received  by  the  partner- 
ship, notwithstanding  the  loan  went  to  its 


use.  As  where  the  transaction  between  a 
banker  and  one  partner  is  in  fact  a  dis- 
count  by  the  former  of  the  latter's  paper  ; 
notwithstanding  the  application  of  the 
funds  so  raised  to  the  uses  of  the  firm, 
and  the  understanding  by  the  banker  that 
they  would  be  so  applied,  the  discounter 
does  not  become  a  creditor  of  the  partner- 
ship, but  simply  of  the  contracting  part- 
ner;  for  "the  purchase  or  discount  of  a 
note  is  a  contract  wholly  unconnected  with 
the  objects,  uses,  or  application  of  the 
money  paid."  Per  Baldwin,  J.,  in  Win- 
ship  V.  Bank  of  the  United  States,  5  Peters, 
567  ;  Emly  v.  Lye,  15  East,  7  ;  Denton  v. 
Eodie,  3  Camp.  493  ;  Graeff  v.  Hitchman, 

5  Watts,   454  ;    Bond  v.  Aitkin,   6  Watts 

6  8.  165;  Foster  i-.  Hall,  4  Humph.  346  ; 
Union  Bank  v.  Eaton,  5  Hiimjih.  499  ; 
Green  v.  Tanner,  8  Met.  411  ;  Ostrom  v. 
Jacobs,  9  Met.  454  ;  Thorn  v.  Smith,  21 
Wend.  365  ;  Beebe  v.  Rogers,  3  Greene, 
(la.)  319;  Mead  v.  Tomlinson,  1  Day,  148. 
See  also  Donnally  v.  Ryan,  41  Pa.  306  ; 
Folk  V.  Wilson,  21  Md.  538. 

{g)  Saville  v.  Robertson,  4  T.  R.  725. 
See  Hoare  v.  Dawes,  Dougl.  371  ;  Coope 
V.   Eyre,  1  H.  Bl.  37  ;   Smith  v.  Craven, 


1  The  partnership  is  not  liable  for  money  loaned  to  the  partner  indivi<lually,  though 
it  was  used  for  the  purposes  of  the  firm.  Clark  v.  Taylor,  68  Ala.  453  ;  Guice  v.  Thorn- 
ton, 76  Ala.  466  ;  Logan  v.  Bond,  13  Ga.  192  :  Lill  v.  Egan,  89  111.  609  ;  Nat.  Bank  of 
Commerce  v.  Meader,  40  Minn.  325,  41  N.  W.  1043  ;  Farmers'  Bank  v.  Bayliss,  41  Mo. 
274  ;  Nat.  Bank  of  Salem  v.  Thomas,  47  N.  Y.  15  ;  Peterson  v.  Roach,  32  Oh.  St.  374  ; 
Ah  Lep  V.  Gong  Choy,  13  Ore.  205,  9  Pac.  483  ;  Union  Bank  v.  Day,  12  Heisk.  413. 

Accordingly,  where  one  member  of  a  commercial  partnership  took  a  note  to  collect 
(an  act  outside  the  scope  of  the  partnershi])  business)  the  firm  was  not  liable,  though  the 
proceeds  were  ajiplied  to  the  payment  of  firm  debts.  The  transaction  of  the  owner  of 
the  note  was  with  the  individual  partner.     Pickels  v.  McPherson,  59  Miss.  216. 

In  the  same  way,  when  goods  are  sold  to  a  partner  individually  the  firm  is  not  liable 
for  the  price,  although  the  goods  are  used  by  the  firm.     Adams  v.  Eatherly  Hardware 


90 


THE   LAW    OF    PARTNERSHIP. 


[CH.   VI. 


It  must,  however,  be  remembered,  that  this  credit,  to  exonerate 
the  other  partners,  must  be  given  knowingly  and  vohintarily.  For, 
if  one  sold  goods  actually  to  a  firm,  but  through  the  agency  of  a 
partner  wliom  he  did  not  know  to  be  a  partner,  and  accordingly 
charged  the  same  to  that  partner  alone,  the  firm  would  still  be 
bound.  This  rule  applies  equally  to  all  simple  contracts,  whether 
oral  or  written.  (A) 


1  Cr.  &  J.  500 ;  Bevan  v.  Louis,  1  Sim. 
376  ;  Wall's  Adin.  v.  Fife,  37  Pa.  394.  So 
wliere  two  parties  agree  to  buy  separately 
certain  amounts  of  a  specitied  kind  of  ))ro]>- 
erty,  and  then  to  form  a  partnership,  each 
contributing  his  purchase  to  tlie  firm, 
neither  partner  is  liable  for  the  purchase 
of  the  other,  as  for  a  partnership  debt. 
McGar  v.  Drake,  Sup.  Ct.  Tenn.  5  Rei)tr., 
387.  [Valentine  v.  Hickle,  39  Oh.  St.  19.] 
(h)  It  was  held,  in  one  case,  in  the 
Common  Pleas  in  England,  that  there 
was  a  difference  between  a  written  and 
an  oral  contract,  so  far  as  regards  the  lia- 
bility of  a  dormant  partner  to  be  sued 
thereon,  and  that,  in  an  action  upon  the 
former,  it  was  not  allowable  to  add  as  par- 
ties other  persons  than  those  whose  names 
were  signed  to  the  agreement.  Beckham 
V.  Knight,  4  Bing.  N.  C.  243.  The  facts 
of  the  case  are  sufficiently  set  forth  in  the 
opinions  of  the  judges.  Tindal,  C.  J.  : 
"The  action  is  brought  on  an  express 
contract  between  Kniglit  &  Surgey  of  the 
one  part,  and  the  plaintiff  of  the  other 
part.  It  appears  by  the  plea  that  three 
persons  were  carrying  on  business  under 
the  firm  of  Knight  &  Surgey,  and  that  the 
defendant  Drake  was  a  dornjant  partner. 
The  agreement  is  in  writing  inter  partes  ; 
and  it  contains  no  intimation  that  Knight 
&  Surgey  were  carrying  on  business  as 
members  of  a  more  extensive  firm.  I 
know  of  no  authority  for  introducing  the 
name  of  a  dormant  partner  into  such  a 
contract.  In  implied  contracts,  where  the 
benefit  is  equal,  and  the  liability  not  lim- 
ited, a  dormant  partner  may  be  included  ; 
but  there  is  no  authority  which  extends 


the  principle  to  express  contracts."  Bosan- 
quet,  J.:  "The  plaintiff"  is  precluded,  by 
the  form  of  the  contract,  from  saying  that 
any  other  person  entered  into  it  besides 
himself  and  Knight  &  Surgey."  See  also 
Robinson  v.  Rudkins,  Exch.  38  Eng.  L.  & 
Eq.  372.  But  Beckham  v.  Knight,  supra, 
was  afterwards  overruled  in  the  Exchequer. 
In  Beckham  v.  Drake,  9  M.  &  W.  79,  upon 
the  same  state  of  facts.  Lord  Abinger, 
C.  B.,  said  :  "I  am  of  the  same  opinion 
that  I  was  then,  that  the  doctrine  stated 
by  the  Court  of  Common  Pleas  that,  when 
a  contract  is  in  writing  between  jiarties 
.signing  their  names  to  it,  it  cannot  be  used 
against  other  parties  than  those  who  signed 
their  names  to  it,  —  cannot  be  supported 
either  on  principle  or  authority.  That 
position,  indeed,  is  contradicted  by  the 
whole  series  of  authorities  bearing  on  the 
subject.  There  is  no  question  that  a  con- 
tract in  writing  by  an  agent,  signed  by 
himself,  will  bind  his  principal,  when  the 
other  contracting  party  discovers  the  prin- 
cipal, although  the  contract  was  made 
without  his  knowing  who  the  principal 
is  ;  as,  for  instance,  in  the  case  of  a  bill 
of  lading  signed  by  the  master,  where  the 
action  is  brought  against  the  owners.  It 
is  also  the  case  of  every  charter-paity, 
which  is  signed  by  the  owner,  where  the 
owner  is  rendered  liable  by  the  act  of  the 
master,  because  the  master  is  his  agent. 
So  it  is  in  a  vast  variety  of  other  cases 
which  frequently  occur,  all  establishing 
the  principle,  that  the  parties  really  con- 
tracting are  the  parties  to  sue  in  a  court 
of  justice,  although  the  contract  be  in  the 
name  of  another.  ...  A  contract  under 


Co.,  78  Ga.  485,  3  S.  E.  430  ;  Gates  v.  Watson,  54  Mo.  585 ;  Harvey  v.  Childs,  28  Oh. 
St.  319  ;  Holmes  v.  Burton,  9  Vt.  252. 

In  such  cases  the  partner  who  thus  becomes  the  debtor  is  of  course  entitled  to  a 
credit  to  that  amount  on  the  books  of  the  partnership.  Thornton  v.  Lambeth,  103 
N.  C.  86,  9  S.  E.  432. 


§  89.]       WHO    ARE    LIABLE    AS    PARTNERS    AS    TO    THIRD    PARTIES.      91 

§  89.  Partner  Accepted  as  Creditor,  rirm  whether  Discharged.  — 
The  firm  would  not  be  held,  if  the  creditor  of  the  firm  had 
acce[)ted  the  individual  security  of  the  partner  instead  of  the  debt 
of  the  firm  ;  provided  the  new  individual  indebtedness  be  of  a 
hitrher  nature  than  the  firm  debt,  or  payable  sooner,  or  attended 
with  some  other  advantage,  which  might  be  regarded  as  a  considera- 
tion, (i)     And  a  judgment  obtained  against  one  partner,  whether 


seal  can  bind  none  but  those  who  sign  and 
seal  it.  A  contract  not  under  seal  is  ojjen 
to  all  the  cointnon-law  requirements  and 
incidents  of  a  contract,  whether  in  writ- 
ing or  not.  Suppose  these  two  partners, 
Knight  &  Surgey,  had  made  a  contract 
verbally,  not  having  said  a  word  about 
Drake  ;  no  question  could  then  have  arisen 
that  Drake  might  nevertheless  be  liable 
upon  it.  How,  then,  does  the  fact  of 
its  being  in  writing,  and  of  their  having 
put  their  names  to  it,  alter  the  case  ?  The 
])arties  are  just  in  the  same  situation,  and 
there  can  be  no  difference.  There  is  noth- 
ing affirmative  on  the  face  of  the  contract 
to  show  an  intention  to  exclude  everybody 
but  themselves.  It  is  open  to  the  defend- 
ant Drake  to  show  such  an  intention,  but, 
unless  it  be  shown,  the  objection  does  not 
arise."  See  Cooke  v.  Seeley,  2  E.xch.  746. 
See,  to  the  same  effect,  Snead  v.  Baringer, 

I  Stew.  134  ;  Reynolds  v.  Cleaveland,  4 
Cow.  282  ;  Mead  v.  Tomlinson,  1  Day, 
148.  The  question  as  to  whom  the  credit 
was  given  is  one  for  the  jury.  Webster  v. 
Stearns,  44  X.  H.  498. 

(i)  As  where  the  bond  or  other  specialty 
of  one  partner  is  taken  for  the  simple  con- 
tract debt  of  the  partnership,  see  Williams 
1-.  Hodgson,  2  H.  &  J.  474  ;  Tom  v.  Good- 
rich, 2  Johns.  214  ;  Clement  v.  Brush,  3 
Johns.  Cas.  180  ;  Waugh  v.  Carriger,  1 
Yerg.  31 ;  Ward  v.  Hotter,  2  Rob.  (Va. ) 
536  ;  Moule  v.  HoUins,  11  G.  &  J.  11  ; 
Jacobs  V.  McBee,  2  McMuUan,  348  ;  Bell 
(;.  Banks,  3  M.  &  G.  258  ;  Ward  v.  John- 
son, 13  Mass.  150  ;  Patterson  v.  Brewster, 
4  Edw.  Ch.  352;  McNaughten  v.  Partridge, 

II  Ohio,  223.  In  United  States  v.  Astley, 
3  Wash.  C.  C.  512,  Washington,  J.,  said  : 
"  The  reason  upon  which  the  doctrine  is 
founded  is  obvious.  The  bond  is  clearly 
obligatory  upon  the  parties  who  executed 
it,  and  is  therefore  an  extinguishment  of 
the  simple  contract  debt  as  to  him.     A 


joint  action,  therefore,  to  recover  on  the 
original  debt  could  not  be  .supported 
against  both  partners.  Neither  could  an 
action  be  maintained  against  the  partner 
who  did  not  execute  the  bond,  because  he 
has  a  right  to  insist  that  his  partner 
should  be  joined  with  him  in  the  action  ; 
of  which  right  the  creditor  and  the  other 
partner  cannot,  without  his  consent,  de- 
prive him.  It  is  precisely  like  the  case  of 
a  release,  which,  if  given  to  one  joint 
debtor,  dischaiges  both.  A  bond  given 
for  a  simple  contract  debt  operates  as  a 
release  of  that  debt,  and  creates  another 
of  a  superior  dignity,  which  can  be  enforced 
only  against  the  person  who  executed  the 
bond." 

The  above  reasoning  seems  conclusive, 
and  appears  to  place  the  doctrine  in  ques- 
tion upon  a  foundation  entirely  independ- 
ent of  the  intentions  of  the  parties.  A 
different  principle,  however,  is  intimated 
in  some  of  the  authorities.  Thus,  in  United 
States  V.  Lyman,  1  JIason,  505,  506,  Story, 
J.,  says  :  "The  doctrine,  that  in  general 
a  higher  security  taken  from  the  debtor 
himself  extinguishes  the  original  contract, 
proceeds  upon  a  presumption  of  law  that 
it  is  taken  in  satisfaction  of  the  original 
debt ;  for,  if  it  appear  otherwise  upon  the 
face  of  the  security,  it  will  not  operate  as 
an  extinguishment.  ...  It  is,  therefore, 
after  all,  a  mere  question  of  interest ;  and 
the  law,  in  the  absence  of  all  other  evi- 
dence of  the  interest,  construes  the  higher 
security  of  the  debtor  himself  as  an  extin- 
guishment, because  it  gives  a  higher  remedy. 
I  admit,  also,  that  a  higher  security  by  a 
third  person,  if  taken  at  the  time  of  mak- 
ing the  original  contract  or  afterwards,  in 
satisfaction  of  the  debt,  operates  as  an 
extinguishment.  But  theie  is  this  dif- 
ference between  the  case  of  a  higher  secu- 
rity of  the  debtor  himself  and  of  a  third 
person,  that,  in  the  latter  case,  the  law 


92 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


the  others  be  ostensible  or  secret,  discharges  tlie  firm  from  liability 
to  be  sued  for  the  same  debt.  (?) 


does  not  presume  the  security  taken  in 
sutisfiiction,  unless  it  is  averred  and  proved 
to  be  the  agreement  of  the  parties  so  to 
consider  it.  Whether  the  receiving  of  a 
higher  security  from  one  partner  for  a  part- 
nership debt  be  an  extinguishment,  unless 
expressly  taken  in  satisfaction  of  such 
del  it,  may  peihai)s  admit  of  some  doubt, 
notwithstanding  the  language  of  some 
highly  respectable  authorities."  So  in 
Bond  V.  Aitkin,  6  W.  &  S.  165,  the  lan- 
guage of  the  court  is  :  "  Where  the  bond 
of  one  of  the  partners  is  taken  for  an 
antecedent  partnership  debt,  it  may  be 
considered  either  as  payment  and  extin- 
guishment of  such  debt,  or  only  a  collateral 
security,  according  to  the  nature  of  the 
transaction  and  the  circumstances  attend- 
ing it.  Wallace  v.  Fairman  (4  Watts, 
378).  But  where  there  is  no  antecedent 
debt,  but  the  bond  of  one  partner  is  taken 
at  the  time  money  is  loaned  to  the  part- 
nership, and  as  the  consideration  for  loan- 
ing the  money,  it  can  hardly  be  treated  as 
a  collateral  security.  It  must  be  con- 
sidered as  all  one  transaction,  and  the 
boud  as  the  only  security  contemplated  ; 
unless,  perhaps,  there  were  strong  and 
positive  evidence  to  show  an  express  agree- 
ment to  the  contrary  by  all  parties."  See 
Collier  v.  Leech,  29  Pa.  404.  And  where 
two  partners  agieed  to  borrow  money  for 
partnership  purposes,  and,  upon  its  being 
loaned  to  them,  one  of  them  gave  his  sole 
bond  for  the  amount,  with  the  other  as  a 
witness,  it  was  held,  upon  the  insolvency 
of  the  firm,  that  the  obligee  might  be 
admitted  as  creditor  under  a  joint  commis- 
sion. Ex  parte  Brown,  1  Atk.  225,  cited. 
See  Horton  v.  Child,  4  Dev.  460  ;  Ross  v. 
Lawhorn,  Dudley,  360  ;  Doniphan  v.  Gill, 
1  B.  Mon.  199.  See  Despatch  Line  of 
Packets  v.  Bellamy  Mfg.  Co.,  12  N.  H. 
234.  But  the  ground  upon  which  the 
rule  is  placed  in  the  passage  above  quoted 
from  Washington,  J.,  certainly  seems  to 
be  more  consonant  with  the  weight  of  the 
authorities.  In  Clement  v.  Brush,  3  Johns. 
Cas.  180,  the  understanding  of  the  parties 
that  the  partnership  was  not  to  he  released 
was  evinced  ou  the  face  of  the  si)ecialty, 


which  was  taken  by  the  creditor  for  the 
firm  debt,  by  its  being  signeil  by  the  part- 
ner with  the  name  of  the  firm.  But  the 
court  said  :  "  One  partner  cannot  bind  his 
copartner  by  seal.  The  defendant  Brush, 
who  executed  it,  is  alone  bound  by  the 
specialty  ;  and,  it  being  a  debt  of  a  higher 
nature,  it  extinguishes  the  simple  contract 
or  jiartnership  debt."  So  in  Williams  v. 
Hodgson,  2  H.  &  J.  474,  and  in  McNaugh- 
ten  V.  Partridge,  U  Ohio,  223. 

(/)  King  V.  Hoare,  13  j\I.  &  W.  494  ; 
Maule,  J.,  in  Bell  v.  Banks,  3  M.  &  G. 
267  ;  Lechmere  v.  Fletcher,  1  Cr.  &  M. 
635  ;  Ti-afton  v.  United  States,  3  Story, 
648,  651  ;  United  States  v.  Cushman,  2 
Sumn.  437,  440 ;  Pearce  v.  Kearney,  5 
Hill,  82  ;  Suydam  v.  Barber,  6  Duer,  34, 
38  ;  McMaster  v.  Vernon,  3  Duer,  249  ; 
Peters  v.  Sandford,  1  Denio,  224.  See, 
however.  Collier  r.  Leech,  29  Pa.  404. 
But  this  is  not  upon  the  ground  that  the 
creditor  who  thus  obtains  judgment  against 
one  partner  alone  thereliy  agrees,  or  is  on 
that  account  presumed  to  agree,  to  release 
the  other  partners.  If  that  were  so,  the 
presumption  might  be  rebutted  ;  as,  for 
instance,  in  the  case  of  a  secret  partner, 
and  the  firm  held,  notwithstanding  a  prior 
judgment  against  one  partner  upon  the 
same  cause  of  action.  But  the  real  reason 
in  case  of  a  judgment,  as  well  as  of  a  bond, 
is,  that  the  creditor,  by  taking  the  higher 
form  of  a  judgment  security  against  one 
partner  for  a  debt  due  jointly  from  all  the 
l)artners,  thereby  changes  the  relations 
and  liabilities  of  the  parties  under  the 
original  contract,  and  cannot,  therefore, 
afterwards  hold  them  upon  it,  whatever 
may  be  his  intention.  Perhaps  these  two 
views  of  the  effect  of  a  creditor's  taking 
the  separate  higher  security  of  one  partner 
for  a  partnership"  debt  arise  from  a  partner- 
ship's being  regarded  in  two  different 
lights.  If  a  partnership  be  treated  as  a 
person,  entirely  distinct  from  the  indivi- 
dual partners,  then  a  contract  between  a 
creditor  of  the  firm  and  one  of  the  partners, 
by  which  the  former  receives  from  the 
latter,  for  a  firm  debt,  his  sole  obligation 
of  a  higher  nature,  is  res  inter  alios  acta. 


§  89.]       WHO    ARE   LIABLE   AS   PARTNERS    AS   TO    THIRD    PARTIES.      93 


If  a  creditor  of  a  firm  has  lost  his  remedy  against  the  partner- 
ship by  taking  from  one  partner  a  security  of  a  higher  nature,  it 
may  not  be  quite  determined  whether  equity  will  give  relief ;  or, 
if  it  can,  under  what  circumstances  and  in  what  manner  this 
relief  will  be  afforded.  Perhaps  the  question,  in  each  case,  would 
be  determined  by  the  intention  of  the  parties ;  for,  if  they  pur- 
posed and  desired  to  extinguish  the  joint  debt  and  substitute  an 
individual  debt,  neither  equity  nor  law  would  keep  the  joint  debt 
alive.  It  is  held,  in  several  cases,  that  it  is  no  ground  for  the 
interposition  of  equity,  that  a  creditor  of  a  partnership  has,  in 
ignorance  of  a  secret  partner,  extinguished  his  remedy  at  law 
against  him  by  taking,  for  the  debt  of  the  firm,  either  a  judgment 
against  the  ostensible  partner,  or  his  separate  bond  or  specialty,  (w) 
If,  however,  a  partner  attempts  to  bind  the  partnership  by  a  spe- 
cialty, but,  failing  for  want  of  authority,  binds  himself  only, 
and  thereby  discharges  the  partnership  at  law  altogether,  —  equity 
will  give  relief  against  the  other  partner,  if  it  be  shown  that  the 
contract  was  really  on  the  partnership  account,  and  was  intended 
by  all  parties  to  bind  the  firm,  (h) 


and  may  be  said  not  to  discharge  the  firm, 
unless  clearlj'  proved  to  have  been  intended 
by  all  the  parties  to  have  that  effect.  If, 
on  the  other  hand,  a  partnership  be  con- 
sidered simply  as  so  many  persons,  who 
contract  and  are  bound  jointly,  but  in  no 
other  way,  a  person  who  has  made  a  con- 
tract with  the  partnership,  but  who  after- 
wards in  some  way  absolves  one  of  the 
partners  from  liability  to  be  sued  upon  it 
together  with  the  other  partners,  has 
thereby  precluded  himself  from  suing  on 
the  original  contract,  because  by  his  own 
act  he  has  deprived  himself  of  the  proper 
parties. 

We  have  already  seen  that  a  judgment 
against  an  ostensible  partner,  upon  a  joint 
claim,  though  unsatisfied,  and  obtained 
during  the  concealment  of  the  secret  part- 
ner, is  a  bar  to  a  subsequent  suit  upon  the 
same  cause  of  action  brouglit  against  both 
the  ostensible  and  the  secret  partners. 
Upon  the  same  principles,  the  bond  of  an 
ostensible  partner,  taken  for  a  partnership 
debt,  extinguishes  the  claim  as  against  a 
secret  partner,  who  may  be  afterwards  dis- 
covered. See  a  full  discussion  of  this 
point  in  Ward  v.  Motter,  2  Rob.  (Va.) 
536  ;  also,  Anderson  v.  Levan,  1  W.  &  S. 
334  ;  Spear  v.  Gillet,  1  Dev.  Eq.  466. 


(m)  Penny  v.  Martin,  4  Johns.  Ch. 
566  ;  Willings  v.  Consequa,  1  Pet.  C.  C. 
301  ;  Williams  v.  Hodgson,  2  H.  &  J. 
474;  Smith  v.  Black,  9  S.  &  R.  142; 
How  V.  Kane,  2  Chand.  222  ;  Ledam  v. 
Williams,  4  McLean,  51.  See  Spear  v. 
Gillet,  1  Dev.  Eq.  466. 

(n)  Wharton  v.  W^oodburn,  4  Dev.  & 
Bat.  507  ;  Blanchard  v.  Parteur,  2  Hayw. 
393  ;  James  v.  Bostwick,  Wright,  142  ; 
Gunter  v.  Williams,  40  Ala.  561.  See 
McKee  v.  Bank  of  Mt.  Pleasant,  7  Ohio, 
175.  In  McNaughten  v.  Partridge,  11 
Ohio,  223,  one  partner  executed  a  bond  for 
a  joint  debt  in  the  name  of  his  firm,  all 
the  parties  to  this  instrument  and  all  the 
partners  suppo.sing,  at  the  time,  that  the 
partnership  was  bound  by  such  execution. 
It  was  held,  that,  on  the  ground  of  the 
mistake  of  the  parties  as  to  the  legal 
effect  of  the  execution  of  the  bond,  equity 
might  relieve  against  the  firm.  But  the 
obligee,  having,  after  the  discovery  of  the 
mistake,  pursued  his  remedy  against 
the  executing  partner  individually,  on  the 
aforesaid  bond,  it  was  held,  that  this  was 
a  ratification  of  the  arrangement  by  which 
the  partnership  had  been  discharged,  and 
that  equity  could  not  now  relieve.  The 
doctrine  in  Virginia  is  thus  set  forth  in 


94 


THE   LAW   ON   PARTNERSHIP. 


[CH.    VI. 


It  has  been  argued  that  if  there  be  no  new  consideration  for 
the  new  promise,  as  all  the  partners  were  equally  liable  in  solido 
for  the  firm  debt,  the  new  promise  of  any  one  of  them  to  pay  it, 
should,  by  itself  alone,  be  no  consideration  for  releasing  the 
rest,  (o)  It  is,  however,  the  better  doctrine,  that  it  is  for  the  jury  to 
decide  whether  the  creditor  intended  to  accept  the  sole  liability  of 
a  partner  in  discharge  of  the  joint  debt  of  the  firm ;  for  if  there 
was  such  an  intention,  and  no  fraud,  the  new  promise  would  be 
supported  on  the  ground  that  the  sole  promise  must  have  been 
more  beneficial  than  the  joint  promise,  or  it  would  not  have  been 
accepted  instead  of  the  joint  promise.  (^)  ^ 


Nailnay  v.  Harvey,  9  Gratt.  466,  by 
Dauiel,  J.:  "It  may,  however,  I  think, 
be  stated  as  the  well-settled  doctrine  of 
this  court,  that  whilst  the  mere  acceptance 
of  such  higher  security  by  a  creditor  from 
one  member  of  a  firm,  for  a  partnership 
debt  due  by  simple  contract,  destroys  the 
right  of  the  creditor  to  proceed  at  law 
against  the  member  who  was  not  a  party 
in  giviug  such  higher  security,  yet  that  a 
court  of  equity  will  look  at  the  original 
character  of  the  debt,  and  will  not  with- 
hold relief  against  the  member  not  unit- 
ing in  the  higher  security,  merely  because 
of  the  merger  and  destruction  of  the  legal 
remedy  against  him  ;  but  will  treat  that 
simple  contract  as  a  debt  still  subsisting 
iji  foro  coiiscientice,  unless  it  is  shown  that 
the  creditor  intended,  by  accepting  such 
higher  security,  to  abandon  all  recourse 
upon  his  original  demand.  In  other 
words,  that  in  a  court  of  law  the  higher 
security  operates  per  se  a  destruction  of 
the  simple  contract ;  but  that,  in  a  court 
of  equity,  whether  such  is  to  be  the  effect 
of  the  transaction,  is  a  question  to  be 
decided  by  proof  of  the  intention  of  the 
parties.  If  by  taking  such  higher  secur- 
ity it  was  not  the  design  of  the  parties 
that  the  social  debt  should  be  wholly  ex- 
tinguished, equity  will  still  hold  all  the 
partners  bound.  If,  on  the  other  hand, 
the  higher  security  is  given  and  accepted 
as  a  substitute  for  the  original  simple 
contract  of  the  firm,  and  with  the  inten- 
tion to  absolve  the  firm,  all  remedy  upon 
the  latter  is  gone,  in  equity  as  well  as  at 


law."  See  Sale  v.  Dishman,  3  Leigh,  548; 
Gait  V.  Calland,  7  Leigh,  594  ;  Weaver  i;. 
Tapscott,  9  Leigh,  424  ;  Ward  v.  Motter, 
2  Rob.  (Va.)  552  ;  Moser  i-.  Libenguth,  1 
Rawle,  255  ;  Hart  v.  \Yithers,  1  Barr, 
285,  290. 

(o)  Attwood  V.  Banks,  2  Beav.  192  ; 
Lodge  V.  Dicas,  3  B.  &  Aid.  611  ;  Living- 
ston V.  Radeliff,  6  Barb.  201  ;  David  v. 
EUice,  5  B.  &  C.  196  ;  Cole  i-.  Sackett,  1 
Hill,  516  ;  Waydell  v.  Luer,  5  Hill,  448  ; 
Wildes  V.  Fessenden,  4  Met.  12  ,  Frentress 
V.  Marble,  2  Greene  (la.),  553.  See  Pierce 
V.  Cameron,  7  Rich.  114  ;  Stone  v.  Cham- 
berlin,  20  Ga.  259.  If  a  creditor  of  the 
firm,  after  dissolution,  knowing  that  one 
or  more  of  the  partners  have  agreed  to 
assume  and  pay  the  firm  debts,  accepts 
the  note  of  those  agreeing  to  pay,  in  pa}'- 
Dient  of  his  debt,  it  is  a  discharge  of  the 
other  partners.  Millerd  i>.  Thorn,  56  N. 
Y.  402.  So  where  each  partner  gives  his 
note  for  his  share  of  a  debt,  it  is  a  dis- 
charge of  the  partnership  debt.  Maxwell 
V.  Day,  45  Ind.  509. 

(/>)  Tlius  it  was  sai<l  by  Dennian,  C. 
J.,  in  Thompson  v.  Percival,  5  B.  &  Ad. 
925  :  "  Many  cases  may  be  conceived  in 
which  the  sole  liability  of  one  of  two 
debtors  may  be  more  beneficial  than  the 
joint  liability  of  two,  either  in  respect  of 
the  solvency  of  the  parties  or  the  con- 
venience of  the  remedy,  as  in  cases  of 
bankruptcy,  or  survivorship,  or  in  various 
other  wa3's  ;  and  whether  it  was  actually 
more  beneficial  in  each  particular  case 
cannot  be  made  the  subject  of  inquiry. 


1  It  is  now  everywhere  admitted  that  where  a  partnership  creditor  accepts  the  note 
of  a  partner  in  satisfaction  of  the  claim  against  the  firm,  the  firm  debt  is  gone.     The 


§  89. j       WHO    ARE   LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.      95 

From  the  language  used  in  some  cases,  it  might  be  inferred  that 
the  taking  of  a  new  security  of  the  same  class  from  one  partner 
for  a  partnership  debt  is  of  itself  sufficient  to  extinguish  the 
partnership  debt,  and  to  discharge  the  firm.  But  the  {principle 
now  ai)plied,  both  in  England  and  generally  in  this  country,  is, 
that  the  acceptance  by  a  creditor  of  the  firm  of  one  partner's 
separate  security  of  the  same  class  with  the  joint  security  (as  of  a 
partner's  promissory  note  for  the  firm  debt)  does  not  discharge 
the  other  partners  unless  an  express  or  implied  agreement  that 
such  shall  be  the  effect  of  the  transaction  is  clearly  made  out.(^)^ 


Kirwan  v.  Kirwan,  2  Cr.  &  M.  617,  623  ;  said:  "Is  it  to  be  endured,  tluit,  when 
Hart  V.  Alexander,  2  M.  &  \V.  484  ;  partners  have  given  their  acceptance,  and 
Waydell  v.  Ltier,  3  Denio,  410  ;  Living-  when  perhaps  one  of  two  partners  lias 
ston  V.  Radclitf,  6  IJarb.  301  ;  Van  Eps  v.  made  provision  for  the  bill,  the  holder 
Dillage,  6  Barb.  244  ;  also,  Hariis  v.  sliall  take  the  sole  bill  of  the  other  part- 
Lindsay,  4  Wash.  0.  C.  271  ;  Marshall,  ner,  and  yet  hold  both  liable?  I  am  of 
C.  J.,  in  Shelby  v.  Mandeville,  6  ('ranch,  opinion,  that,  when  the  holder  chooses  to 
264 ;  Ex  parte  Liddiard,  4  Deacon  &  do  so,  he  discharges  the  other  partner." 
Ch.  603  ;  Oakeley  v.  Pasheller,  10  Bligh,  Acceptance  by  a  firm  creditor  of  a  note 
548;  Anderson  v.  Henshaw,  2  Day,  272  ;  made  by  the  surviving  partner,  who  had 
Thomas  v.  Shillibeer,  1  M.  &  W.  124.  The  been  authorized  to  take  this  in  li(|uidatioii, 
principle  of  these  latter  cases  seems  also  does  not  discharge  the  estate  of  the  de- 
to  have  been  asserted  in  Evans  v.  Drum-  ceased  partners.  Titus  v.  Todd,  25  N.  J. 
mond,  4  Esp.  92,  and  in  Reed  v.  White,  5  Eq.  458. 
Esp.  122.     In  the  former,   Lord  Kenyon  (q)  Ex  parte  Hodgkinson,  19  Ves.  295 ; 


partner  is  really  a  third  party,  the  true  debtor  being  the  firm  ;  and  it  is  well  settled 
that  a  debt  is  discharged  by  accepting  in  payment  of  it  the  note  of  a  third  person. 
In  addition  to  the  authorities  collected  in  note  (p)  see  the  following  cases.  Thompson 
V.  Percival,  5  B.  &  Ad.  925  ;  In  re  Parker,  19  N.  B.  R.  340  ;  Myatts  v.  Bell,  41  Ala. 
222  ;  Bonnell  v.  Chamberlin,  26  Conn.  487  ;  Maxwell  v.  Day,  45  Ind.  509  ;  Drake  v. 
Hill,  53  la.  37  ;  Crooker  v.  Crooker,  52  Me.  267  ;  Washburn  v.  Pond,  2  All.  474  ; 
Ludington  v.  Bell.  77  N.  Y.  138  ;  Bank  v.  Green,  40  Oh.  St.  431  ;  Robinson  v.  Hurl- 
burt,  34  Vt.  115  ;  Dages  v.  Lee,  20  W.  Va.  584  ;  Gates  v.  Hughes,  44  Wis.  332. 

If,  however,  the  note  of  a  partner  is  taken  in  payment  of  an  existing  firm  debt,  it 
will  be  presumed  (in  the  absence  of  proof  of  an  agreement  to  discharge)  to  be  mere 
conditional  payment,  and  if  the  new  note  is  not  paid  at  maturity  the  liability  of  the 
firm  remains. 

Ill  re  Clap,  at  2  Low.  226  ;  Leabo  v.  Goode,  67  Mo.  126  ;  Titus  v.  Todd,  25  X.  J.  Eq. 
458  ;  Claflin  v.  Ostrom,  54  N.  Y.  581  ;  Leach  v.  Church,  15  Oh.  St.  169  ;  Spaulding 
V.  Ludlow  Mills,  36  Vt.  150  ;  Miller  v.  Miller,  8  W.  Va.  542. 

This  is  true  even  if  the  n^w  note  was  given  by  an  ostensible  sole  trader  who  in 
fact  had  a  dormant  partner ;  on  discovering  that  fact,  the  creditor  may  sue  on  the 
original  claim,  the  new  note  remaining  unpaid.  Robinson  v.  Wilkinson,  3  Price, 
508;  Parker  v.  Canfield,  37  Conn.  250;  Schemerhorn  v.  Loines,  7  Johns.  311;  Hill  v. 
Vooi-hies,  22  Pa.  68  ;  Nichols  v.  Cheairs,  4  Sneed,  229. 

1  If  at  the  time  a  debt  arises  against  the  firm  the  note  of  a  partner  is  taken,  not  to 
make  him  the  debtor,  but  as  collateral  security  or  conditional  payment,  the  firm  is 
bound.  Bottomley  v.  Nuttall,  5  C.  B.  N.  s.  122;  Smith  v.  Collins,  115  Mass.  388  ; 
Sage  V.  Sherman,  2  X.  Y.  417  ;  Bowers  v.  Still,  49  Pa.  65  ;    Schollenberger  v.  Seldon- 


96  THE   LAW   OF    PARTNERSHIP.  [CH.    VI. 

§  90.  Use  of  Firm  Property  for  Private  Purposes.  —  Instances  of 
partners  using  the  name  or  credit  of  the  firm  for  their  personal 
advantage,  and  without  authority,  are  constantly  occurring  ;  and, 
as  we  have  seen,  when  this  is  known  to  the  person  dealing  with 
them,  the  firm  are  not  held.  Some  difficulty  often  arises  as  to 
the  proof  of  such  knowledge  on  the  part  of  the  creditor.  There  is 
a  rule,  however,  which  rests  on  strong  authority,  and  is  in  itself 
reasonable,  just,  and  convenient,  which  would  settle  most  of  these 
cases,  or  at  least  reduce  them  to  mere  questions  of  fact.  It  is, 
that  whenever  a  party  receives  from  any  partner,  in  payment  for 
a  debt  due  from  that  partner  only,  whether  the  debt  be  created 
at  the  time  or  before  existing,  or  by  way  of  settlement  of  or 
security  for  a  debt,  the  indebtedness  or  obligation  of  the  firm  in 
any  form,  the  presumption  of  the  law  is,  that  the  partner  gives 
this  and  the  creditor  receives  it  in  fraud  of  the  partnership,  and 
has  consequently  no    demand   upon  them,  (r)     And    upon    the 

Harris  v.  Farwell,  15  Beav.   31  ;    Winter  itor  where  the  partnership  is  dissolved  by 

V.  Inues,  4  Myl.  &  Cr.  101  ;    Davis  v.  De-  the  retirement  of  one  or  more  of  its  mem- 

sauque,  5  Whart.  530  ;    Smith   v.  Rogers,  bers.     See  §  324  et  se.q.  for  a  more  detailed 

17  Johns.  340  ;  Parker  f.  Cousins,  2  Gratt.  examination  of  the  cases. 
372 ;    Mason   v.  Wickersham,  4  W.  &  S.  (r)   Hope  r.  Gust,  cited  in  Shirreff  v. 

100;    Yarnell  v.   Anderson,   14  Mo.  619;  Wilks,  1   East,  48;    Ridley  i).  Taylor,   13 

Potter  V.   McCoy,   26    Pa.    458  ;     Hill    v.  East,  175  ;  Green  v.  Drakin,  2  Stark.  347; 

Voorhies,  22  Pa.  ^8  ;   Nichols  v.  Cheairs,  Ex  parte  Goulding,    2   Glyn    &  J.    118  ; 

4  Sueed,  229.  And  even  in  those  States,  Heath  v.  Sansom,  2  B.  &  Ad.  291  ;  Ex 
where,  as  in  Maine,  Massachussetts,  and  parte  Thorpe,  3  Mont.  &  Ayr.  716  ;  Wintle 
Vermont,  the  taking  of  a  negotiable  note  v.  Crovvther,  1  Cromp.  &  J.  316  ;  Snaith 
or  bill  is  regarded  as  jwima  facie  evidence  v.  Bnrridge,  4  Taunt.  684  ;  Ex  parte 
of  payment  of  the  debt,  it  may  be  believed  Agace,  2  Cox,  312;  Davenport  ■u.  Run- 
that  the  acceptance  by  a  partnership  lett,  3  N.  H.  386  ;  Greeley  v.  Wyeth,  10 
creditor  of  such  separate  security  would  N.  H.  15  ;  Williams  v.  Gilchrist,  11  N. 
not  discharge  the  firm,  unless  it  were  H.  535  ;  Livingston  v.  Ha.stie,  2  Caines, 
clearly  shown  that  such  was  the  intention  246  ;  Lansing  v.  Ten  Eyck,  2  Johns.  300 ; 
of  the  parties.  Barker  v.  Blake,  11  Mass.  Livingstone.  Roosevelt,  4  Johns.  251;  Dob 
20,  21.     See  also  Melledge  v.  B.  Iron  Co.,  v.  Halsey,   16  Johns.  34  ;    Foot  v.  Sabin, 

5  Cush.  170;  Fowler  v.  Ludwig,  34  Me.  19  Johns.  154;  Laverty  ■?;.  Burr,  1  Wend. 
455  ;  Tracy  v.  Pearl,  20  Vt.  162  ;  Heald  529  ;  Whitaker  v.  Brown,  11  Wend.  75  ; 
V.  Warren,  22  Vt.  410.  The  .security  of  Gansevoort  v.  Williams,  14  Wend.  133  ; 
one  or  more  of  the  partners  for  a  firm  Wilson  v.  Williams,  14  Wend.  146  ; 
debt  is  more  frequently  taken  by  a  cred-  Chazournes  ?;.  Edwards,  3  Pick.  5;  Rogers  i-. 

ridge,  49  Pa.  83  ;  Maffet  v.  Leuckel,  93  Pa.  468  ;  Barcroft  v.  Snodgrass,  1  Cold.  430  ; 
Hoeflinger  v.  Wells,  47  Wis.  628,  3  N.  W.  589. 

According  to  the  better  view  in  these  cases,  the  firm  is  not  discharged  even  if  the 
creditor  has  pursued  his  remedy  against  the  partner  to  judgment,  or  has  proved 
against  the  partner  in  bankruptcy  ;  the  claim  against  the  partner  being  merely 
cumulative.  Bottomley  v.  Nuttall,  5  C.  B.  N.  s.  122  ;  Claflin  v.  O^trom,  54  N.  Y. 
581  ;  First  Nat.  Bank  v.  Morgan,  73  N.  Y.  593.  But  see  In  re  Herrick,  13  N. 
B.  R.  312. 


§  90.]       WHO    ARE    LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.       97 

same  principle,  if  one  partner  releases  a  debt  due  to  his  firm,  in 
consideration  of  a  release  to  him  of  a  debt  due  by  him  solely,  the 
presumption  will  be  that  the  transaction  was  fraudulent,  (s)  ^ 


Bitchelor,  12  Pot.  221  ;  Baud  v.  Cochran, 
4  S.  &  It.  397  ;  Cotton  v.  Evans,  1  Dev. 
&  B.  Va[.  284  ;  Wead  i;.  Richardson,  2 
Dev.  &  B.  535  ;  Pierce  v.  Pass,  1  Porter, 
232;  Mauldin  v.  Branch  Bank,  2  Ala. 
511  ;  Hagar  v.  Mounts,  3  Blackf.  57,  261  ; 
Hickman  v.  Reineking,  6  Blackf.  388  ; 
Lanier  v.  M'Cabe,  2  Fla.  32  ;  Clay  v.  Cot- 
trell,  18  Pa.  408  ;  King  v.  Faber,  22  Pa. 
21  ;  Darling  v.  March,  22  Me.  184  ;  El- 
liott V.  Dudley,  19  Barb.  326  ;  Miller  v. 
Hines,  15  Ga.  197.  See  Leveson  v.  Lane, 
13  C.  B.  N.  s.  278  ;  Williams  v.  Brim- 
hal!,  13  Gray,  462;  Casey  v.  Carver,  41 
111.  228  ;  Rutledge  v.  S^iuires,  23  la.  53. 
The  purchaser  of  goods  from  a  firm 
cannot  plead,  in  payment  or  set-otf,  a  debt 
due  him  from  one  of  the  firm.  Wise  v. 
Copley,  36  Ga.  508.  Nor  can  a  creditor 
of  a  partner,  by  an  attachment  and  sale 
of  firm  jiroperty,  on  execution,  for  his 
private  debt,  acijuire  title  as  against  the 
creditors  of  the  firm.  Miner  v.  Pierce, 
38  Vt.  610.  A  sale  by  a  partner  of  ])art 
of  the  firm  property,  the  proceeds  to  be 
aj)plied  to  the  private  account  of  the  part- 
ner, is  fraudulent  a.s  against  the  other 
partners,  and  gives  the  purchaser  no  title 
as  against  them.  Williams  v.  Barrett,  10 
Kas.  455  ;  Stegall  v.  Coney,  49  Miss.  761. 
If  a  partner  fraudulently  approfiriate  the 
funds  of  a  firm  to  the  purchase  of  real 
estate,  or  to  the  payment  of  life-insurance 
premiums  on  a  policy  for  the  benefit  of 
his  wife,  a  court  of  equity  will  follow  the 
funds  and  their  proceeds,  and  appropriate 


them  to  the  use  of  the  firm.  Shaler  r. 
Trowbriilge,  28  N.  J.  Ec^.  (Stewart)  595. 
One  who  takes,  in  payment  of  the  in- 
dividual note  of  A.,  for  his  private  debt, 
notes  payable  to  A.,  but  belonging  to 
the  firm  of  which  he  was  a  member,  has 
a  good  title,  if  he  was  ignorant  of  the 
fact  of  partnership.  Kellogg  v.  Faucher, 
23  Wis.  21.  The  banker  of  a  firm  who 
knowingly  transfers  funds  of  the  firm  to 
the  private  account  of  one  of  the  firm, 
for  the  purpose  of  speculation,  is  liable 
to  the  other  partners  for  the  funds  so 
transferred.  Billings  v.  Meigs,  53  Barb. 
272.  And,  generally,  a  partner  cannot 
use  partnership  funils  or  credits  to  pay 
his  private  debt.s,  or  promote  his  private 
interests.  McXair  v.  Piatt,  46  111.  211; 
Broailus  v.  Evans,  63  N.  C.  633  ;  Down- 
ing V.  Linville,  3  Bush,  472  ;  Wise  v. 
Copley,  36  Ga.  508. 

(s)  Evernghim  v.  Ensworth,  7  Wend. 
326;  Gram  v.  Cadwell,  5  Cow.  459;  Far- 
rarv.  Hutchinson,  9  A.  &  E.  641;  Greeley 
V.  Wyeth,  10  N.  H.  15.  If  a  firm  is  sued 
upon  a  note  given  in  the  partnership 
name,  partly  for  a  partnership  debt  and 
partly  for  the  separate  debt  of  one  or  more 
of  the  partners,  it  seems  that  the  firm  is 
liable  so  far  as  the  note  is  founded  upon 
a  partnership  consideration.  Wilson  v. 
Lewis,  2  Man.  &  G.  197  ;  Barker  v. 
Burgess,  3  ilet.  273.  See  Barber  v.  Back- 
house, 1  Peake,  61  ;  AVintle  v.  Crowther, 
1  Cromp.  &  J.  316;  Ex  parte  Kirby, 
Buck,  511. 


1  A  partner  has  no  authority  to  dispose  of  partnership  property  in  payment  of  an 
individual  debt  ;  and  a  creditor  of  the  partner  taking  such  property  has  no  right  to 
hold  it  against  the  partnership,  whether  he  claims  absolute  title,  or  holds  the  property 
by  way  of  mortgage  or  pledge.  Snaith  v.  Burridge,  4  Taunt.  684  ;  Rogers  v.  Batchelor, 
12  Pet.  221  ;  Kelley  v.  Greenleaf,  3  Story,  93  ;  iloline  AVagon  Co.  v.  Rummell.  12 
F.  R.  658  ;  Clafliu  v.  Bennett,  51  F.  R.  693  ;  Halstead  v.  Shepard,  23  Ala.  558  ;  Xall 
V.  Mclntyre,  31  Ala.  532  ;  Cannon  v.  Liudsey,  85  Ala.  198,  3  So.  676  ;  Nichol  v. 
Stewart,  36  Ark.  612;  Brewster  v.  Mott,  5  111.  378  ;  Deeter  v.  Sellers,  102  Ind.  458, 
1  N.  E.  854  ;  Johnson  v.  Crichton,  56  Md.  108  ;  Kingsbury  v.  Tharp,  61  Mich.  216, 
28  N.  W.  74  ;  Hinds  v.  Backus,  45  Minn.  170,  47  N.  W.  655  ;  Buck  v.  Mosley,  24 
Miss.  170  ;  Hoff  v.  Rogers,  67  Miss.  208,  7  So.  358  ;  Hilliker  v.  Francisco,  65^  Mo. 
598  ;  Forney  v.  Adams,  74  Mo.  138  ;  Dob  v  Halsey,  16  Johns.  34  ;  Gcery  v.  Cockroft, 
33  N.  Y.  Super.  146  ;  Hartness  v.  Wallace,  106  X.  C.  427,  11  S.  E.  259  ;  Tanner  v. 


98  THE    LAW    OP    PARTNERSHIP.  [CH.    VI. 

§  91.  Good  if  authorized.  —  The  presumption  of  fraud  in  these 
cases   is   never   absolute.     It  may  be  rebutted  by  proof  of  the 

Hall,  1  Barr,  417;  Hartley  v.  White,  94  Pa.  31  ;  McNair  v.  Wilcox,  121  Pa.  437,  15 
Atl.  575  ;  Goode  v.  McCartney,  10  Tex.  193.  See  Jones  v.  Yates,  9  B.  &  C.  532 ; 
l-eucht  V.  Evans,  52  Ark.  217  ;  Daniel  v.  Daniel,  9  B.  Mon.  195  ;  Bourne  v.  Woold- 
riJge,  10  B.  Mon.  492  ;  t'adwallailcr  v.  Krocsen,  22  Md.  20U. 

Tiiis  is  true,  even  if  he  was  ignorant  of  the  fact  that  it  was  partnership  jiroperty. 
Rogers  v.  Batchelor,  12  Pet.  221  ;  Janney  v.  Springer,  78  la.  617,  43  N.  \V.  461  ; 
Minor  V.  Gaw,  11  Sni.  &  M.  322;  Buck  v.  Mosley,  24  Miss.  170;  Aukley  v.  Staehlin, 
56  Mo.  558;  Caldwell  v.  Scott,  54  N.  H,  414;  Binns  v.  Waddill,  32  Gratt.  588 
(semble)  ;  Liberty  Savings  Bank  v.  Campbell,  75  Va.  534. 

But  see  Locke  1).  Lewis,  124  Mass.  1.  If,  however,  the  partner  has  been  so  intrusted 
with  the  property  by  his  copartners  as  to  appear  to  be  sole  owner,  a  diHerent  (question 
is  presented.     See  post,  §  99. 

If  all  tlie  partners  assent  to  the  transfer,  the  individual  creditor  of  the  partner  gets 
a  valid  title.  McGliees  v.  Mclutchen,  82  Ga.  788,  9  S.  E.  785  ;  Veal  v.  Keely  Co., 
86  Ga.  130,  12  S.  E.  297  ;  Fargo  «.  Ames,  45  la.  491  ;  Rhodes  v.  McKean,  55  la.  547, 
8  N.  W.  359  ;  In  re  Stewart,  62  la.  614,  17  N.  W.  897  ;  Sc.hnndlaiip  v.  Currie,  55 
Miss.  597  ;  Sexton  v.  Anderson,  95  Mo.  373,  8  S.  W.  564  ;  Pepper  v.  Peck  (R.  I.),  20 
Atl.  16  ;  Carver  Gin  &  Macli.  Co.  v.  Bannon,  85  Tenn.  712,  4  S.  W.  831;  Hage  v. 
Campbell,  78  Wis.  572,  47  N.  W.  179, 

And  it  the  firm  has  in  this  way  assumed  an  individual  debt,  one  jiartner  may  give  a 
tirni-note  in  payment  of  it.     Randall  v.  Hunter,  66  Cal.  512. 

The  burden  is  on  the  individual  creditor  to  show  assent  of  all  the  partners.  Johnson 
V.  McCIary,  131  Ind.  105,  30  N.  E.  888  ;  Mechanics'  k  Traders'  Ins.  Co.  v.  Richard- 
son, 33  La.  Ann.  1308  ;  Mutual  Nat.  Bank  v.  Richardson,  33  La.  Ann.  1312  ;  Davis  v. 
Smith,  27  Minn.  390,  7  N.  W.  731  ;  Farwell  v.  St.  Paul  Trust  Co.,  45  Minn.  495,  48 
N.  W.  326. 

And  mere  silence  on  the  part  of  the  other  partners  is  not  enough  to  prove  assent. 
Johnson  v.  McClary,  131  Ind.  105,  30  N.  E.  888  ;  nor  dt.es  assent  without  full  knowl- 
edge of  the  facts,  amount  to  ratification,  American  Exchange  Nat.  Bank  v.  Georgia 
Const.  &  Inv.  Co.,  87  Ga.  651,  13  S.  E.  505.  Nor  will  a  representation  by  the  partner 
of  the  consent  of  his  copartners  cure  the  defect.  Allen  v.  Cary,  33  La.  Ann.  1455  ; 
Union  Nat.  Bank  v.  Underbill,  102  N.  Y.  336,  7  N.  E.  293. 

So  where  a  partner  releases  a  debt  due  to  the  firm  on  consideration  of  the  transfer 
of  property  or  other  advantage  to  the  partner  individually,  the  release  does  not  bind 
the  firm.  Lemiette  v.  Starr,  66  Mich.  539,  33  N.  W.  832  ;  Beatson  v.  Hariis,  60  N.  H. 
83  ;  Clift  V.  Moses,  112  N.  Y.  426,  20  N.  E.  392. 

And  a  partner  cannot  bind  the  firm  by  a  consent  to  set  off  a  debt  due  from  him  to  a 
stranger  against  a  debt  owed  by  the  stranger  to  the  firm.  Cowen  v.  Eartheily  Hard- 
ware Co.,  (Ala.)  11  So.  195.  Thomas  v.  Stetson,  62  la.  537,  17  N.  W.  751  ;  Chase 
V.  Buhl  Iron  Works,  55  Mich.  139,  20  N.  W.  827  ;  see  Atkin  v.  Berry,  1  Lea,  91. 

Therefore  where  both  the  firm  and  an  individual  partner  owe  the  same  creditor,  a 
firm  check  cannot  with  consent  of  the  partner  be  applied  to  the  debt  of  the  latter. 
Cornells  v.   Stanhope,   14  R.   I.  97. 

And  where  one  partner  used  firm  assets  to  pay  off  a  mortgage  on  his  wife's  land,  it 
was  held  that  the  firm  could  charge  the  land  with  the  amount  of  the  mortgage. 
Brecher  v.   Fox,  1  F.  R.  273. 

Upon  the  same  principle,  one  partner  cannot  subject  the  partnership  assets  to  the 
individual  debt  of  the  other  partner  to  him.     Evans  v.   Bryan,  95  N.   C.   174. 

So  where  a  partner,  being  an  individual  debtor,  gives  firm  jiaper  in  payment  of  his 
debt,  the  creditor,  or  one  with  notice,  cannot  enforce  payment  against  the  partnership. 
Guice  V.  Thornton,  76  Ala.  466  ;  American  Exchange  Nat.  Bank  v.  Georgia  Const.  & 
Inv.  Co.,  87  Ga.  651,  13  S.  E.  505  ;  Mechanics'  &  Traders'  Ins.  Co.  v.  Richardson,  33 


91.]       WHO    ARE   LIABLE    AS   PARTNERS    AS   TO   THIRD   PARTIES.         99 

authority  given  by  the  other  partners,  or  of  their  knowledge  and 
consent,  or  their  ratification ;  and  these,  or  either  of  them,  may 
be  express,  or  be  inferred  from  their  acts,  or  usage,  or  any  cir- 
cumstances which  reasonably  imply  them.  (0  The  presumption 
seems  to  be  held  much  more  strongly  in  this  country  than  in 
England.  There,  indeed,  the  courts  would  seem  to  hold,  that,  if 
the  name  of  the  partnership  be  used  by  a  partner  even  for  his 
private  debt,  the  partnei's  will  be  held,  unless  they  can  show  covin 
or  fraud  on  the  part  of  the  holder;  and  the  mere  fact  that  it  was 
the  private  debt  of  one  partner  to  him  will  not  amount  to  prirnd 
facie  proof  of  this,  {u)     In  a  recent  English  case,  in  a  suit  on  a 

(t)  Franklaiid   v.   M'Gusty,   1   Knapp,  111.  374  ;  Wise  v.  Copley,  36  Ga.  508.     Rut 

Pr.  C.   274  ;  Ex  -parte   Boiibonus,  8  Ves.  proof  of  knowledge  that  the  iiidel)tedness 

540  ;  Ex  parte  Thorpe,  3  Mont.  &  A.  716  ;  or  obligation  of  the  partnership  had  been 

Gnn.sevoort  v.  Williams,   14  Wend.   133  ;  applied  by  one    partner  to  pay  his  own 

Wilson  V.  Williams,  14  Wend.  146  ;  Cot-  debt  is  not  proof  of  consent  to  or  satisfac- 

ton  V.  Evans,  1  Dev.  &  B.  Eq.  295  ;  Noble  tion  of  such  misapplication   by  the  other 

V.  jrClintock,  2  W.  &  S.  152  ;  Pierce  v.  yiartners,  so  as  to  rebut  the   presumption 

Pass,  1  Port.  232  ;  Brewster  y.  Mott,  5  111.  of  fraud  in  the  creditor.     Ex  parte  Agace, 

378;  Jones  v.  Booth,  10  Vt.  268;   Miller  2  Cox,  312;   Elliott  v.   Dudley,  19  Barb. 

V.  Hines,  15  Ga.  197;   Darling  v.  March,  326. 

22  Me.  184.     See  Corbin   v.  McChesney,  (u)  Compare  Ridley  v.  Taylor,  13  East, 

26  111.  231;   Warren  v.   Dickson,  30  IlL  175;  Frankland  w.  M'Gusty,  1  Knapp.  Pr. 

363  ;  Sternburgr.  Callaman,  14  Iowa,  251,  C.    274;    Ex  parte   Agace,   2   Cox,   312; 

adopted  and  confirmed  in  Cadwallader  v.  Ex  parte  Bonbonus,  8  Ves.  540;  Ex  parte 

Blair,  18  Iowa,  420  ;  Carver  v.   Dows,  40  Thorpe,  3  Mont.  &  A.  716  ;   Musgrave  v. 

La.  Ann.  1308  ;  Blodgett  v.  Sleeper,  67  Me.  499  ;  Daniels  v.  Hammond,  154  Mass. 
165,  28  N.  E.  12  ;  Freeman  v.  Ellison,  37  Mich.  459  ;  Howell  v.  Sewing  Machine  Co., 
12  Neb.  177,  10  X.  W.  700  ;  Union  Nat.  Bank  v.  Underbill,  102  N.  Y.  336,  7  N.  E. 
293;  Graham  v.  Taggart,  (Pa.)  11  Atl.  652. 

This  is  the  case  where  the  note  of  a  new  firm  is  given  in  renewal  of  a  note  of  the  old 
firm  it  succeeded,  by  one  who  was  partner  in  both  firms.  Tyree  v.  Lyon,  67  Ala.  1. 
And  where  a  partner  indorsed  his  individual  note  with  the  firm  name,  and  discounted 
it  for  his  individual  purposes.  Newman  v.  Richardson,  9  F.  R.  865  ;  Nat.  Bank  of 
Connnerce  v.  Law,  127  Mass.  72.     See  Atlas  Nat.  Bank  v.  Savery,  127  Mass.  75. 

But  a  holder  of  a  firm  note  for  value  and  without  notice  could  of  course  recover. 
Redlon  v.  Churchill,  73  Me.  146  ;  Nichols  v.  Sober,  38  Mich.   678. 

So  where  one  partner  borrowed  money  to  put  into  the  firm  as  his  cajiital,  and  gave  a 
firm  note  for  it,  the  lender  cannot  hold  the  firm  on  the  note  if  he  had  notice  of  the  facts 
at  the  time  of  taking  the  note.  Coller  v.  Porter,  88  Mich.  549,  50  N.  W.  658  ; 
McNanghton's  Appeal,  101   Pa.  550.     See  Goodbar  v.   Gary,   16  F.  R.   316. 

As  a  partner  cannot  pay  his  own  individual  debt  with  the  firm  assets,  so  he  cannot 
thus  pay  the  debt  of  his  partner  without  the  consent  of  all  partners,  including  the 
debtor.     Brewster  v.  Reel,  74  la.   506,  38  N.  W.  381. 

A  partner  cannot  give  away  the  firm  property  to  a  volunteer,  Daniel  v.  Daniel,  9 
B.  Mon.  195.  And  for  this  reason  he  cannot  make  a  valid  surrender  of  a  firm  lease, 
unless  in  an  exigency  of  the  business,  when  the  other  partner  is  not  accessible.  Berg- 
land  V.  Frawley,  72  Wis.  559,  40  N.  W.  372.  So  one  who  receives  a  gift  of  a  firm  note 
from  a  partner  cannot  sue  the  firm  on  it.  Lobdell  v.  Slawson,  90  Mich.  201,  51 
N.  W.    349. 


100 


THE    LAW    OF    PAETNERSHIP. 


[CH.    III. 


bill  of  exchange  accepted  by  a  partner  in  the  name  of  the  firm, 
which  bill  included  with  the  debt  of  the  firm  a  private  debt  of  the 
partner,  the  court  directed  a  verdict  for  only  the  amount  that 
was  due  from  the  firm,  {uv)  We  shall,  in  a  future  chapter,  speak 
of  this  question  more  fully  in  regard  to  negotiable  paper.^ 

If  a  partner  makes  a  fraudulent  use  of  the  name  or  property  of 
his  firm,  it  should  be  clearly  and  immediately  repudiated  by  them 
as  soon  as  it  comes  to  their  knowledge ;  and  any  long  delay  may 
work  a  ratification,  (uuu) 

§  92.  Beginning  of  Liability.  —  It  is  Sometimes  important,  in 
reference  to  liability  for  debt,  as  in  other  respects,  to  determine 
when  a  partnership  begins.  For  example,  if  a  man  orders  goods 
sent  to  another,  and  they  are  so  sent  and  charged  to  the  first 
party,  and  the  seller  discovers  that  the  orderer  and  receiver  were 
partners  in  the  transaction,  both  are  liable.  But  if  the  goods  were 
to  be  supplied  to  the  receiver  by  tlie  orderer,  and  manufactured 
on  certain  terms  by  the  party  receiving  them,  and  the  new  prod- 


Drake,  5  Q.  B.  185  ;  with  Davenport  v. 
Runlett,  3  N.  H.  386  ;  Lansing  v.  Gaine, 
2  Johns.  305;  Dob  v.  Halsey,  16  Johns. 
34 ;  Gansevoort  v.  Williams,  14  Wend. 
133  ;  Cliazournes  v.  Edwards,  3  Pick.  5  ; 
Rogers  V.  Batchelor,  12  Pet.  221  ;  Cot- 
ton V.  Evans,  1  Dev.  &  B.  Eq.  284  ; 
Pierce  v.  Pass,  1  Port.  282.  In  Dob  v. 
Halsey,  supra,  Spencer,  J.,  said:  "The 
only  difference  between  the  decision  of  this 
court  and  that  of  the  King's  Bench  con- 
sists in  this  :  We  re(juire  the  separate  cred- 
itor, who  has  obtained  the  partnership 
paper  for  the  private  debt  of  one  of  the 
partners,  to  show  the  assent  of  the  whole 
firm  to  be  bound.  The  rule  of  the  King's 
Bench  throws  the  burden  of  avoiding  such 
security  on  the  firm,  by  requiring  them  to 
prove  that  the  act  was  covinous  on  the 
part  of  the  partner  for  whose  private  debt 
the  paper  of  the  firm  was  given,  by  show- 
ing that  it  was  done  without  the  knowl- 
edge, and  against  the  consent,  of  the  other 
partners,  and  that  the  fact  was  known  to 
the  separate  creditor  when  he  took  the 
paper  of  the  firm."  In  Rogers  v.  Batch- 
elor, 12  Pet.  221,  the  question  was  raised 
whether  it  made  any  difference  that  at  the 
time  of  the  transaction  the  separate  cred- 
itor had  no  knowledge  that  there  was  a 
misappropriation  of  the  partnership  funds. 


Judge  Story  said:  "It  is  true  that  the 
precise  point  now  before  us  does  not  ap- 
pear to  have  received  any  direct  adjudica- 
tion ;  for  in  all  the  cases  above  mentioned 
there  was  a  known  application  of  the 
funds  or  securities  of  tlie  partnership  to 
the  payment  of  the  separate  debt.  But 
we  think  that  the  true  principle  to  be 
extracted  from  the  authorities  is,  that  one 
partner  cannot  apply  the  partnership  funds 
or  securities  to  the  discharge  of  his  own 
private  debt  without  their  consent ;  and 
that  without  their  consent  their  title  to 
the  property  is  not  divested  in  favor  of 
such  separate  creditor,  whether  he  knew 
it  to  be  partnership  property  or  not.  In 
short,  his  right  depends,  not  upon  his 
knowledge  that  it  was  partnership  prop- 
erty, but  upon  the  fact  whether  the  other 
partners  had  assented  to  such  disposition 
of  it  or  not."  Brewster  v.  Mott,  5  111. 
378.  See  the  language  of  Spencer,  J.,  in 
Dob  V.  Halsey,  16  Johns.  39.  It  was  dis- 
tinctly adjudged  in  Achley  v.  Staclilin,  56 
Mo.  558,  that  the  fact  that  a  creditor  had 
no  knowledge  was  immaterial.  [See  ante, 
§  90,  note.l 

{uv)  Ellston  V.  Deacon,  L.  R.  2  C.  P.  20. 

(liuu)  Marine  Co.  of  Chicago  v.  Carver, 
41  111.  66  ;  Casey  v.  Carver,  41  111.  225. 


1  Post,  §  133  c<  seq. 


§  92.]       WHO    ARE   LIABLE    AS    PARTNERS    AS    TO    THIRD    PARTIES.     101 

nets  when  manufactured  (and  not  before)  were  to  be  the  joint 
property  of  the  two  as  partners,  then  the  receiver  of  the  goods 
would  not  be  liable,  {v) 

The  general  principle  which  answers  the  question  when  a  part- 
nership begins,  fur  tlic  purp(jse  and  with  the  effect  of  casting  upon 
the  members  of  the  firm  the  liability  of  partners,  must  of  course 
be  that  the  liability  of  persons  on  contracts  not  made  by  them- 
selves, and  as  partners,  begins  at  the  moment  when  they  begin  to 
have  a  joint  interest  in  the  contracts  as  partners.  For  if  a  person 
purchases  goods  or  borrows  money  upon  his  own  credit,  and  it  is 
aftei-wards  discovered  that  the  goods  or  the  money  have  been 
apj)lied  to  the  use  of  a  partnership  of  which  he  is  a  member,  the 
firm  will  be  liable  for  the  price  of  the  goods  or  the  amount  of  the 
loan,  if,  from  the  nature  and  circumstances  of  the  transaction,  the 
firm  may  be  regarded  as  the  real  purchaser  or  borrower,  which 
has  acted  through  its  authorized  agent ;  otherwise,  only  the  party 
to  whom  credit  was  actually  given  can  be  held.  Suppose  there  is 
no  partnership  in  contemplation  at  the  time  goods  are  sold  or 
money  is  loaned.  In  such  case,  though  the  money  or  the  goods 
subsequently  go  to  the  use  of  a  copartnership,  of  which  the  visible 
contracting  party  is  a  member,  there  can  be  no  pretence  for  hold- 
ing the  firm  liable,  since,  at  the  time  of  the  formation  of  the 
contract,  it  had  no  existence  even  in  intention,  (w) 

(v)  Gardiner  v.  ChiMs,  8  C.  .fe  P.  345  ;  of  a  joint  adventure,  and  one  of  them  with 

Broune  v.  (Ubbins,  5  Bro.  P.  C.  491  (Dub-  the  view  pledges  his  credit  for  his  allotted 

lin  ed.),  3  Bro.  P.  C.  127.  contribution  to  the  joint  capital,  he  only 

(w)  Such   was  the   case   of  Young   v.  can  be  made  liaV)le  upon  the  contract,  un- 

Huuter,  4  Taunt.    582.     Hunter  &  Ray-  less,  at  the  time  of  making  it,  the  partner- 

ney  had  purchased  goods  of  the  plaintiffs  ship  was  in  existence  and  capable  of  being 

and  other  persons,  which  they  intended  to  a  contracting  party.     And  hence,  if  by  the 

ship  for  tlie  Baltic  ;  and  the  defendants,  parties'   agreement  the   beginning  of  the 

Hotf  ham  &  Co.,  who  were  not  otherwise  partnership  appear  clearly  dependent  upon 

jtartners  of  Hunter  &  Co.,  were  afterwards  some  act  or  event  subsequent  to  the  making 

allowed  to  join  in  the  adventure,  and  to  of  the  contract  in  (juestion,  the  possibility 

have  a  fifth  share  upon  the  goods  being  of  tlie  firm's  'neing  liable  thereon  is  at  once 

put  on  board.     The  plaintiffs  knew  noth-  excluded.     This  proposition  is  illustrated 

ing  of  Hoff  ham  &  Co.,  but  sold  the  goods  by  the  case  of  Saville  i'.  Robertson,  4  T.  R. 

to  Hunter  &  Co.  only.     It  was  held  that  720.     In   that   case   Loi-d   Kenyon    said  : 

Hoff  ham  &  Co.  were  not  liable  to  pay  for  "  The  facts  of  the  case  are  shortl}'  these  : 

the  goods.     Heath,  J.  :  "  The  proposition  several  persons  who  had  no  general  part- 

of  the  plaintiffs,  that,  if  it  be  shown  that  nei'ship,    nor   any   connection   with    each 

at  any  one  period  of  the  transaction  there  other  in  trade,  formed  an  adventure  to  the 

was  a  [lartnership  subsisting,  it  was  there-  East  Indies.     The  outfit  of  the  vessel  was 

fore  to  be  inferred  that  there  had  been  a  a  joint  concern  of  all  the  partners  ;  and 

partnership   in   the    original  purchase    is  that  delivers  the  case  from  one  considera- 

whoUy  unfounded."  tion,   namely,    the    parcel    of    co]iper   for 

On    the   other   hand,    if    parties    have  sheathing  the  ship,  which  is  admitted  to 

agreed  to  be  partners  for  the  prosecutioji  be  a   partnership   concern.     But   beyond 


102 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


§  93.   Partner  by  holding  out.  —  We  have  already  seen  that  one 
may  be  liable  as  a  partner  who  is  not  so  in  fact,  if  he  suffers  him- 


that  I  see  no  partnership  between  the  par- 
ties till  all  the  parcels  of  the  cargo  were 
(ieiivered  on  board  ;  and  that  made  it  a 
combined  adventure  between  all  the  par- 
ties. I  cannot,  therefore,  see  how  it  can 
be  said  that  these  goods,  which  were  sold 
to  Pearce  only,  and  on  his  sole  credit  and 
account,  were  sold  and  delivered  on  the 
partnership  account.  Afterwards,  indeed, 
these  defendants  were  to  gain  or  lose  by 
the  joint  cargo :  when  the  other  goods 
were  brought  in,  the  partnership  arose  ; 
but  each  was  to  bring  in  his  own  particu- 
lar stock.  But  in  this  case  I  think  that 
the  question  stops  short  of  att'ecting  the 
defendants,  and  I  cannot  see  how  the  plain- 
tiff can  have  a  right  to  call  on  the  defend- 
ants, as  partners,  for  the  value  of  these 
goods,  on  a  supposed  contract,  when  the 
real  contract  between  the  buyer  and  seller 
was  consummated  before  the  joint  risk 
began."  The  case  of  Post  v.  Kimberh% 
9  Johns.  470,  is  somewhat  analogous  in 
its  facts,  and  exemplifies  the  same  piinci- 
ple.  See  Ward  v.  Thompson,  1  Newb, 
Adm.  95,  where,  however,  the  question 
arose  between  the  partners  :  Spalding  v. 
Hedges,  2  Barr,  240,  243  ;  Dunham  v. 
Rogers,  1  Barr,  2.'55.  On  the  other  hand, 
Gouthwaite  v.  Duckworth,  12  East,  421,  is 
a  case  in  which,  from  the  character  of  the 
agreement  between  the  parties,  the  part- 
nership was  tleemed  to  be  in  no  way 
dependent  for  its  beginning  upon  any 
commingling  of  the  several  partners'  con- 
tributions, nor  upon  any  other  appropria- 
tion thereof  to  the  joint  fund  ;  but  to  have 
been  in  existence  at  the  time  of  and  for  the 
purpose  of  the  purchase  of  such  contribu- 
tions. Lord  EUenborough,  C.  J.,  there 
said  :  "  It  comes  to  the  question,  whether, 
contemjiorary  with  the  purchase  of  the 
goods,  there  did  not  exist  a  joint  interest 
between  these  defendants.  The  goods  were 
to  be  purchased,  as  Duckworth  states  in 
his  examination,  for  tlie  adventure;  that 
was  the  agreement.  Then  what  was  this 
adventure  ?  Did  it  not  commence  with 
the  purchase  of  these  goods  for  the  pur- 
pose agreed  upon,  in  the  loss  and  profits 
of  which  the  defendants  were  to  share  ? 
The  case  of  Saville  v.  Robertson  does  in- 


deed approach  very  near  to  this  ;  but  the 
distinction  between  the  cases  is,  that  there 
each  party  brought  his  separate  parcel  of 
goods,  which  were  afterwanls  to  be  mixed 
in  the  conmion  adventure  on  board  the 
ship,  and  till  that  admixture  the  partner- 
ship in  the  goods  did  not  arise.  But  here 
the  goods  in  question  were  purchased,  in 
pursuance  of  the  agreement  for  the  adven- 
ture, of  which  it  had  been  before  settled 
that  Duckwoith  was  to  have  a  moiety. 
.  .  .  If  all  agree  to  share  in  goods  to  be 
purchased,  ami  in  consequence  of  that 
agreement  one  of  them  go  into  the  market 
and  make  the  puichase,  it  is  the  same,  for 
this  jJUiT^'^'"'  *^^  if  ^^^  the  names  had  been 
announced  to  the  seller,  and  therefore  all 
are  liable  for  the  value  of  them."  So  in 
Everitt  v.  Chapman,  6  Conn.  347.  There 
A.,  B.,  &  C.  were  in  ])artnership  in  the 
business  of  tanning  hides,  under  an  agree- 
ment by  which  A.  was  to  furnish  hides  for 
one-half  of  the  stock,  and  was  to  receive 
and  make  market  for  one-half  of  the 
leather,  and  B.  k  C.  were  to  furnish  the 
other  half  of  the  stock,  and  to  make  mar- 
ket for  the  other  half  of  the  leather  ;  each 
of  the  partners  to  purchase  on  his  own 
separate  credit.  B.  bought  hides  of  the 
plaintiff,  wOnch  were  charged  to  him  indi- 
vidually. But,  afterwards  discovering  the 
partnei-ship,  the  ])laintiff  brought  his  ac- 
tion against  A.,  B.,  &  C.  It  was  held, 
that  the  firm  were  liable  for  the  value  of 
the  hides.  The  court  cited  Gouthwaite  v. 
Duckworth,  supra,  and,  commenting  on 
Saville  v.  Robertson,  referred  to  by  the 
defendants,  said:  "This  authority,  then, 
is  so  far  from  justifying  the  defence,  that 
it  vindicates  the  claim  of  the  plaintiff; 
for  these  defendants  were  in  partnership 
when  the  hides  were  purchased  — they  were 
boiight  for  the  concern  —  they  were  deliv- 
ered into  their  tannery — they  went  to 
their  joint  benefit,  having  been  purchased 
by  H.  P.  Mott,  without  disclosing  the 
names  of  his  copartners."  See  also,  to  the 
same  effect,  a  dicttim  of  Gibbs,  J.,  iu 
Young  V.  Hunter,  4  Taunt.  583  ;  Brooke 
V.  Evans,  5  Watts,  196  ;  Griffith  v.  Buffum, 
22  Vt.'  181.  In  Wilson  v.  Whitehead, 
Ackerman  &  Carleton,   10  -M.  &  W.   503, 


§  93]       WHO    ARE   LIABLE   AS    PARTNERS    AS   TO    THIRD    PARTIES.     103 


self  to  be  held  out  to  the  world  as  a  partner.^  The  reason  is 
obvious.  Any  person  may  lend  his  credit  to  another,  as  he  may 
lend  his  money  or  property;  and  if  he  chooses  to  lend  his  credit 


the  action  was  assumpsit  lor  goods  sold 
and  delivered  to  the  defendant,  White- 
head, to  be  used  in  printing  the  ''Sporting 
Review."  To  establish  the  joint  liability 
with  liini  of  Aekerinan  &  Carleton,  a  ver- 
bal agreement  between  the  tliree  was  i)roved 
that  they  should  bring  out  and  be  jointly 
interested  in  the  "  S[)orting  Review  ; " 
Aokerrnan  was  to  be  the  publisher,  and  to 
make  and  receive  general  payments.  Carle- 
ton  to  be  the  editor,  and  Whitehead  the 
printer ;  and,  after  payment  of  all  ex- 
penses, the  three  were  to  share  the  profits 
of  tile  publication  eijually.  Whitehead 
was  to  furnish  the  pa[)er  for  the  work,  and 
to  charge  it  to  the  account  at  cost  price, 
and  was  also  to  charge  the  printing  at 
"master's  [)rices."  On  this  evidence  the 
conrt  directed  a  nonsuit,  on  the  ground 
tliat  the  other  defendants  were  not  jointly 
liable  with  Whitehead  in  this  action,  giv- 
ing the  plaintiffs  leave  to  move  to  enter  a 
verdict  for  tlie  admitted  value  of  the  paper. 
On  the  hearing  of  the  motion,  Parke,  B., 
said  :  "  The  question  is.  Did  the  other  de- 
fendants authorize  Whitehead  to  purchase 


the  paper  on  their  account,  or  on  his  own  ? 
It  appears  to  nie,  on  tlie  true  construction 
of  tlie  contract,  that  the  latter  was  the 
case.  Wlien  tlie  paper  was  in  his  posses- 
sion, he  was  at  liberty  to  have  appropriated 
It  to  any  other  purpose  than  to  tlie  '  Sport- 
ing Review.'  "  That  is,  from  the  nature  of 
the  agreement  between  the  parties,  it  was 
apparent  that,  contemporary  with  the  pur- 
chase of  the  goods  in  (question,  there  was 
no  joint  interest  in  them  on  the  part  of  the 
defendants  ;  but  their  joint  interest  therein 
arose  subse(|uent  to  the  contract  of  sale, 
and  only  after  some  act  had  been  per- 
formed by  Whitehead  by  which  the  paper 
was  appropriated  to  the  use  of  the  partner- 
ship." See  Barton  v.  Hansom,  2  Taunt. 
49  ;  Aspinwall  i-.  Williams,  1  Ohio,  38  ; 
Austin  V.  Williams,  1  Ohio,  282.  Of 
course  the  same  considerations  are  appli- 
cable where,  in  pursuance  of  an  agreement 
to  prosecute  an  adventure  in  companj', 
one  or  more  of  the  partners,  on  his  own 
credit,  borrows  money,  and  puts  it  into 
the  firm  as  his  contribution  to  the  joint 
fund.     Smith  v.  Craven,  1  Cr.  &  J.  500. 


1  Ex  parte  Broome,  1  Rose,  69  ;  De  Berkom  v.  Smith,  1  Esp.  29;  Goode  t?.  Harrison, 
5  B.  &  Aid.  147  ;  Baird  v.  Planque,  1  F.  &  F.  344  ;  Edmundson  v.  Thompson,  2  F.  & 
F.  564  ;  Kirkwood  v.  Cheethani,  2  F.  &  F.  798;  Gurney  v.  Evans,  3  H.  &  N.  122  ; 
Martyn  v.  Gray,  14  C.  B.  N.  s.  824  :  Donbleday  v.  Mnskett,  7  Bing.  110  ;  Lake  v. 
Argyll,  6  Q.  B.  477  ;  Collingwood  v.  Berkeley,  15  C.  B.  N.  s.  145  ;  Maildiek  v. 
Marshall,  16  C.  B.  N.  s.  387,  17  C.  B.  N.  s.  829  ;  Buckingham  v.  Burgess,  3  McLean, 
364;  In  re  Jewett,  15  N.  B.  R.  126  ;  In  re  Krueger,  2  Low.  66  ;  Schlapbaek  v.  Long, 
90  Ala.  525,  8  So.  113  ;  Bowie  v.  Maddox,  29  Ga.  285  ;  Carmichael  i>.  Greer.  55  Ga. 
116  ;  Fisher  v.  Bowles,  20  111.  396  ;  Sherrod  v.  Lnng.lon,  21  la.  518  ;  Walrath  v.  Viley, 
2  Bush,  478  ;  Palmer  v.  Pinkham,  33  Me.  32  ;  Potter  v.  Greene,  9  Gray,  309  ;  Rice  v. 
Barrett,  116  Mass.  312  ;  Mershon  v.  Hohensack,  2  Zab.  372  ;  McStea  v.  Matthews,  50 
N.  Y.  166  ;  Reber  ■;;.  Col.  Machine  M'f'g  Co.,  12  Oh.  St.  175  ;  Speer  v.  Bishop,  2  I  Oh. 
St.  598  ;  Drennen  v.  House,  41  Pa.  30  ;  Furber  v.  Carter,  11  Humph.  271  ;  Gushing  r. 
Smith,  43  Tex.  261  ;  Hnris  v.  Crary,  67  Tex.  383,  3  S.  W.  316  ;  Stearns  v.  Haven, 
14  Vt.  540  ;  Mathews  v.  Felch,  25  Vt.  536  ;  Wait  v.  Brewster,  31  Vt.  516. 

This  princi]ile  is  a]iplicable  where  one  represents  himself  to  be  partner  in  a  business. 
Brugman  v.  M.Guire,  32  Ark.  733  ;  Dailey  v.  Coons,  64  Ind.  545  ;  Dodd  v.  Bishop,  30 
La.  Ann.  1178  ;  Baldey  v.  Brackenridse,  39  La.  Ann.  660,  2  So.  410;  Cirkel  v  Cros- 
well,  36  Minn.  323,  31  N.  W.  513  ;  Shaferu.  Randolph,  99  Pa.  2.i0  ;  Walker  v.  Brown, 
66  Tex.  556  ;  Coi'nhauser  v.  Roberts,  75  Wis.  554,  44  N.  W.  744. 

It  is  equally  applicable  where  one  allows  himself  to  be  held  out  as  partner  by  another  ; 
lint  his  eoiisent  to  tlie  holding  out  must  be  proved.  Humes  v.  O'Bryan,  74  Ala.  64  ; 
Alabama  Fertilizer  Co.  v.  Reynolds,  79  Ala.  497  :  Kritzer  v.  Sweet,  57  Mich.  617,  24 
N.  W.  764  ;  Seabury  r.  P.olles,  51  X   J.  103,  16  All.  54. 


104  THE    LAW    OF    PARTNERSHIP.  [CH.    VI. 

or  responsibility,  he  must  of  coui'se  abide  by  the  consequences  of 
any  contracts  made  on  the  faith  of  it.  Most  cases  of  this  kind 
occur  where  a  partner  retires  from  a  firm,  and  his  retirement  is 
unknown,  either  through  his  wish  or  his  negligence.  These 
we  propose  to  consider  together  in  reference  to  the  duties  and 
liabilities  of  a  retiring  partner. 

It  has  been  said,  holding  out  one's  self  as  partner  to  the  world 
"  is  not  a  wise  expression ;  "  and  the  question  should  be, "  whether 
he  so  held  himself  to  the  plaintiff,  or  under  such  circumstances  of 
publicity  as  to  satisfy  a  jury  that  the  plaintiff  knew  of  it  and 
believed  him  to  be  a  partner."  {y)  But  to  hold  one's  self  out  "  to 
the  world  "  means,  precisely,  so  to  hold  one's  self  out  as  to  justify 
anybody  and  everybody  in  believing  him  a  partner  ;  and  it  seems 
to  be  a  very  good  expression  for  this  purpose.  It  is  a  different 
case,  when  the  plaintiff  relies  upon  tiie  fact  that  the  party  sought 
to  be  charged  so  held  himself  out  specifically  to  the  individual 
charging  him. 

[One  who  is  held  liable  as  a  partner  because  he  has  been  so  held 
out  is  called  a  nominal  or  quasi  partner. 

This  liability  because  of  holding  out  rests  upon  the  doctrine  of 
estoppel,  because  the  defendant,  having  represented  himself  to  be 
a  partner,  cannot  afterwards  by  showing  the  falsehood  of  the 
representations  defraud  those  who  have  acted  upon  them.  It  does 
not  make  him  an  actual  partner.^  Therefore  he  is  held  liable  only 
to  one  who  knew  of  the  holding  out  at  the  time  he  acted,  and  acted 
in  reliance  upon  it.^J 

(y)  So  said,  by  Parke,  J.,  in  Dickinson  v.  A'alpy,   10  B.   &  C.   140. 

1  Grabenheiraer  v.  P.indskotf,  64  Tex.  49. 

2  A^ice  V.  Anson,  7  B.  &  C.  409  ;  Dickinson  v.  Valpy,  10  B.  &  C.  128,  140  ;  Carter 
XK  Whalley,  1  B.  &  Ad.  11  ;  Pott  v.  Eyton,  3  C.  B.  32  ;  Edmundson  v.  Thompson,  31 
L.  J.  Ex.  207;  Thompson  v.  First  Nat.  Bank  of  Toledo,  111  U.  S.  529  ;  Benedict  v. 
Davis,  2  McLean,  347;  In  re  Murray,  13  F.  R.  550  ;  Marble  v.  Lypes,  82  Ala.  322, 
2  So.  701  ;  Tanner  &  Delaney  Engine  Co.  v.  Hall,  86  Ala.  305,  5  So.  584  ;  Levy  v. 
Alexander,  (Ala.)  10 So.  394;  Alexander t;.  Haiidley,  (Ala.)  11  So.  390;  Bowie i;.  Maddox, 
29 Ga.  285;  Hefner  v.  Palmer,  67  111.  161 ;  Brown  r.  Rains,  53  la.  81,  4  N.  W.  867;  Mark- 
ham  V.  Jones,  7  B.  ilon.  456  ;  Wood  v.  Pennell,  51  Jle.  52  ;  Fitch  v.  Harrington,  13 
Gray,  468  ;  Partridge  v.  Kingman,  130  Mass.  476;  Brown  v.  Grant,  39  Minn.  404,  40 
N.  W.  268  ;  Rime]  v.  Hayes,  83  Mo.  200  ;  Hahlo  v.  Mayer,  102  Mo.  93,  13  S.  W.  804  ; 
Parchen  v.  Anderson,  5  Mont.  438,  5  Pac.  588;  Seabury  v.  Bolles,  51  N.  J.  103, 16  Atl. 
54;  Burnett  y.  Snyder,  76  N.  Y.  344,  81  N.  Y.  550  ;  Cook  v.  Penrhyn  Slate  Co.,  36  Oh. 
St.  135  ;  Denithorne  v.  Hook,  112  Pa.  240,  3  Atl.  777  ;  Walker  v.  Brown,  66  Tex.  556, 
1  S.  W.  797.  See  also  Buckingham  v.  Burgess,  3  McLean,  364,  549  ;  Hicks  v.  Cram, 
17  Vt.  449. 

One  or  two  cases  contra  cannot  be  considered  as  law.  Young  v.  Axtell,  2  H.  Bl. 
242  ;  Poillon  v.  Secor,  61  N.  Y.   456. 

So  where  one,  who  had  held  himself  out  as  a  partner,  informed  the  agent  of  the 


§  94.]       WHO    ARE   LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.    105 

Much  the  greater  number  of  cases  relating  to  the  liability  of 
one  hold  out  as  a  ])artner  turn  upon  the  rights  and  duties  of  a 
retiring  partner,  and  will  be  considered  when  treating  of  that 
subject. 

§  94.  What  constitutes  holding  out.  —  Persons  may  come  under 
a  general  liability  by  merely  having  the  same  firm  name,  provided 
tiiey  do  business  in  such  a  way  as  to  lead  to  the  inference  sug- 
gested by  the  name,  of  an  identity  of  interest,  (a)  So,  too,  if  one 
is  a  partner  m  a  house  for  some  business,  and  the  other  partners 
carry  on  another  business  in  which  he  has  no  interest,  if  nothing 
is  done  or  said  and  no  circumstances  exist  to  indicate  his  want  of 
community  in  this  last  l)usiness,  so  that  those  dealing  with  the 
other  partners  are  justified  in  believing  that  they  are  dealing 
with  him  also,  he  is  then  liable  as  a  partner,  {b) 

(«)  James  Spencer  carried  on  business  James,    and    became     liable    accordingly. 

in   Manchester   under  the  firm  of  James  Spencer  v.  Billing,  3  Camp.  310.     And  two 

Spencer  &  Co.;  and  William  Spencer,  in  firms  will  be  held  to  be  one,   if  they  as- 

London,  under  the  style  of  Sjiencer  &  Co.  sume  to  constitute  one.    Beall  v.  Lowndes, 

It  was  held,  that  William  Spencer,  having  4  S.  C.  258. 

been  in  the  habit,   personally,  or  by  his  (b)   Wood  &  Payne  were  in  partnership 

clerk,  of  accepting  bills  drawn  upon  James  as  wholesale   grocers.       Wood,    Payne,  & 

Spencer  &  Co.,  and  addressed  to  William  Steele  were  partnei-s  in  buying  and  selling 

Spencer's  place  of  business  in  London,  had  cotton  ;  this  last  business  being  carried  on 

thereby  held  himself  out  as  a  partner  of  at  Wood  &  Payne's  counting-house,  and  in 

plaintiff  at  the  time  of  making  the  contract  on  which  suit  was  brought  that  he  was  not 
a  partner,  he  could  not  be  held  as  partner.  Willis  v.  Rector,  50  F.  K.  684.  And  so 
where  the  plaintiff  from  any  cause  had  notice.  Alabama  Fertilizer  Co.  v.  Reynolds,  85 
Ala.  19,  4  So.  639.  See  Alderson  v.  Pope,  1  Camp.  404  n.;  Entwisle  v.  Mulligan, 
(Pa.)  12  Atl.  766  (semb^e). 

Where  the  representation  was  not  that  the  party  was,  but  that  he  was  about  to 
become,  a  partner,  he  cannot  be  held  as  a  nominal  partner,  since  an  estoppel  cannot  be 
founiled  upon  a  representation  as  to  the  future.  Bourne  v.  Freeth,  9  B.  &  C  632  ; 
Reynell  v.  Lewis,  15  M.  &  W.  517.  And  so  a  representation  after  the  contract  is  made 
will  not  make  one  a  nominal  partner.     Ridgway  v.  Philip,  1  C.  M.  &  R.  415. 

If  the  plaintiff,  at  the  time  of  dealing  with  a  firm,  had  been  led  by  the  defendant  to 
believe  the  latter  a  partner,  and  therefore  dealt  with  the  firm  believing  defendant  to  be 
bound,  the  defendant  is  liable,  although  no  special  reliance  was  placed  on  his  credit. 
Strecker  v.  Conn,  90  Ind.  469  ;  Lieb  (;.  Craddock,  87  Ky.  525,  9  S.  W.  838. 

It  has  been  held  in  North  Dakota  that  if  the  holding  out  as  partner  continues  for  a 
long  time,  the  plaintiff  need  not  show  that  he  relied  upon  the  representation  ;  for  such 
reliance  will  be  presumed.  Braithwaite  v.  Power,  1  N.  D.  455,  48  N.  W.  354.  And 
in  Rizer  v.  James,  26  Kas.  221,  it  was  held  that  even  in  the  absence  of  evidence  that 
the  plaintiff  was  misled  by  the  holding  out,  the  reputed  partner  would  be  liable  as 
nominal  partner. 

A  plaintiff  may  prove  that  the  defendant  was  held  out  as  partner  with  his  own  con- 
sent by  showing  such  holdings  out,  though  they  did  not  come  to  the  plaintiff's  knowl- 
edge ;  and  may  then  show  that  he  relied  upon  the  defendant's  partnership  hy  showing 
a  holding  out  to  him,  though  not  by  consent  of  the  defendant.  Fletcher  v  Pullen,  7.0 
Md.  205,  16  Atl.  887. 


106 


THE   LAW   OP   PARTNERSHIP. 


[CH.    VI. 


The  rule,  then,  is  that  every  one  who  authorizes  another  to 
believe  him  a  partner,  is,  as  to  the  person  so  authorized,  a  part- 
ner ;  but  it  must  also  be  true  that  this  authorization  must  be  such 
as  would  be  so  regarded  by  a  reasonable  and  fair  man  ;  and  a 
mere  conjecture  that  a  man  is  a  partner,  even  from  circumstances 
tending  that  way,  is  not  sufficient  to  hold  him  as  such,  (e) 

Usually,  the  question  whether  one  is  liable  as  a  partner  because 
so  held  out  by  himself,  or  with  his  consent,  turns  upon  the  force 
and  meaning  of  his  acts.     If  his  name  is  advertised,  (q)  or  is  on 


the  name  of  Wood  &  Paj'iie.  Steele,  how- 
ever, had  no  concern  in  the  grocery  busi- 
ness, nor  did  he  take  an  active  part  in  the 
cotton  business  ;  nor  was  lie  known  as  a 
2)artner  therein,  either  to  the  plaintiffs  or 
to  the  woild.  Wood  &  Payne  bought 
groceries  of  the  plaintiffs  ;  for  which  they 
gave  a  bill  of  exchange  I'eceived  by  Wood 
&  Payne,  as  cotton  dealers,  for  cotton  sold 
to  the  drawer,  and  in  which  Steele  was 
interested.  This  bill  was  payable  to  the 
defendants  or  order,  and  was  indorsed  by 
either  Wood  or  Payne,  by  the  name  of  the 
firm  of  Wood  &  Payne.  It  was  held  that 
Steele  was  liable  as  partner  on  such  indorse- 
ment. Swan  V.  Steele,  7  East,  210.  See 
Miner  v.  Downer,  19  Vt.  14.  Assumpsit 
on  a  bill  of  exchange  by  the  indorsees 
against  the  defendant  as  one  of  the 
drawers,  the  other  drawer  having  become 
bankrupt.  The  bill  was  drawn  in  the 
name  of  "James  King  &  Co.,"  under 
which  firm  the  defendant  and  his  partners 
had  traded.  It  also  appeared  that  there 
were  other  partnerships  carried  on  under 
the  firm  of  "James  King  &  Co.,"  in 
which  the  other  drawers  were  concerned, 
but  in  which  the  defendant  had  no  share. 
The  defendant  offered  to  show  that  this 
bill  was  not  drawn  on  account  of  the  part- 
nership in  which  he  was  concerned,  but  on 
account  of  one  of  the  others,  and  that  he 
knew  nothing  of  it.  Lord  Kenyon  was  of 
opinion  that  the  defendant  was  neverthe- 
less liable  ;  he  had  traded  with  the  other 
partners  under  that  firm,  and  persons  tak- 
ing bills  under  it,  though  without  his 
knowledge,  had  a  right  to  look  to  him  for 
payment.  Baker  v.  Charlton,  Peake,  80. 
See  Fleming  t\  McNair,  cited  in  1  Mon- 
tagu on  Part.  37,  note  (c);  and  in  3  Dow, 
229.  In  Baker  I'.  Nappier,  19  Ga.  520,  it 
appeared  that  Kilgrow  &   Price  were  in 


partneiship  in  the  hotel  business,  and 
Kilgi'ow  &  Patillo  in  the  grocery  business. 
From  the  evidence,  also,  it  was  doubtful 
whether  each  firm  did  not  sometimes  use 
or  recognize  the  name  of  E.  W.  Kilgrow  & 
Co.  as  its  own.  For  goods  bought  of  Kil- 
grow, in  the  name  E.  W.  Kilgrow  &  Co., 
the  plaintiifs  sought  to  hold  the  firm  of 
Kilgrow  &  Price.  The  court  held,  that  the 
jury  should  be  instructed,  "  that,  if  Baker 
&  Hart  (the  plaintiffs),  after  taking  reason- 
able care  to  find  out  which  firm  Kilgrow 
was  dealing  for,  really  thought  he  was 
dealing  for  that  in  which  Mrs.  Price. was  a 
member,  and  so  sold  him  the  goods,  in- 
tending them  for  that  firm,  and  if  the 
goods  were  adapted  to  the  business  of  that 
firm,  —  then  that  firm  was  liable  to  pay 
for  the  goods,  although  Kilgrow,  in  truth, 
intended  them  for  the  other  firm,  and 
although  they  went  into  the  other  firm." 

(e)  This  is  well  illustrated  by  the  lan- 
guage of  the  court  in  Baker  v.  Kappier,  19 
Ga.  520,  which  has  just  been  cited.  In 
the  course  of  its  opinion  in  that  case  the 
court  said  :  "A  merchant,  in  dealing  with 
a  i)erson  known  to  him  to  be  a  member  of 
two  different  firms,  and  in  resi)ect  to  goods 
suitable  to  either  firm,  would  in  general 
be  in  the  exercise  of  no  more  than  ordi- 
nary care,  if  he  called  on  that  person  to 
know  which  was  the  firm  he  was  dealing 
for.  And  if,  without  making  any  such 
inquiry,  the  merchant  should  sell  the  per- 
son the  goods,  thinking  him  to  be  acting 
for  one  firm  when  he  was  acting  for  the 
other,  the  merchant  could,  in  general,  hold 
only  the  firm  for  which  the  person  was 
really  acting,  liable." 

[q)  In  Ex  parte  Matthews,  3  Yes.  &  B. 
125,  the  petitioner  prayed  that  the  joint 
commission  against  himself  and  John  Mat- 
thews as  partners  might  be  superseded : 


§  95.]      WHO    ARE   LIABLE    AS    PARTNERS    AS   TO    THIRD   PARTIES.     107 

the  painted  signs  over  the  door,  (r)  on  the  shop-bills  or  cards,  (s) 
and  he  knows  this  and  makes  no  objection,  he  is  bound. 

§  95.  Consent  must  be  Shown.  —  But  a  person  cannot  be  made 
liable  as  j)artner  because  so  held  out,  unless  the  holding  out  is 
})roved  to  have  been  with  his  concurrence.  Hence  the  declaration 
or  acts  of  A.,  implicating  B.  as  his  partner,  wliile  they  bind  the 
former,  cannot  affect  the  latter,  without  some  confirmation  by 
him.  (t)     As  to  public  acts  of  this  kind,  there  is  some  presump- 


and  stated  that  he,  the  petitioner,  never 
was  a  partner,  nor  interested  with  John 
Matthews  nominally  or  really  in  the  prop- 
erty or  profits  of  his  trade,  or  any  other 
trade  ;  that  he  was  merely  the  sliopman  to 
John  j\[atthews,  and  not  a  trader ;  and 
that  there  was  no  pretence  for  supposing 
him  a  partner  with  John  Matthews,  ex- 
cept an  advertisement  in  the  "Gazette," 
declaiing  the  partnership  between  them 
dissolved  ;  which  advertisement  was  In- 
serted for  the  purpose  of  counteracting  a 
report  that  they  were  partners.  The  Lord 
Chancellor  held,  that  upon  the  affidavits 
he  could  not  possil)ly  decide  that  there  was 
no  partnership  ;  and,  accordingly,  that  an 
issue  must  be  directed  to  try  that  question. 

{))  Williams  v.  Keats,  2  Stark.  290  ; 
Dolman  v.  Prichard,  2  C.  &  P.  104. 

(s)  Young  V.  Axtell,  2  H.  Bl.  242  ; 
Gill  V.  Kuhn.  6  S.  &  R.  338  ;  Benedict  v. 
Davis,  2  McLean,  348.  See  further,  for 
illustrations  of  the  methods  by  which  per- 
sons may  exhibit  themselves  as  partners. 
Ex  parte  Langdale,  18  Ves.  300  ;  s.  c. 
2  Rose,  444  ;  Bond  v.  Pittard,  3  M.  &  W. 
357  ;  Guidon  v.  Robson,  2  Camp.  302  ; 
Geddes  v.  Wallace,  2  Bligh,  296  ;  Stearns 
V.  Haven,  14  Vt.  540  ;  Hicks  v.  Cram,  17 
Vt.  449  ;  Cottrill  v.  Vanduzen,  22  Vt. 
511  ;  Matthews  v.  Felch,  25  Vt.  536  ; 
Perry  v.  Randolph,  6  Sm.  &  M.  335  ; 
Chapman  v.  Wilson,  1  Rob.  (Va.)  267; 
Mershon  v.  Hobensack,  2  N.  J.  372:  Smith 
V.  Smith,  27  N.  H.  244  ;  Holmes  v.  Por- 
ter, 39  Me.  157  ;  Barnett  v.  Smith,  17  111. 
565  ;  Mi'Mnllan  v.  Mackenzie,  2  Greene 
(la.),  368  ;  Chidney  r.  Porter,  21  Pa.  390. 
If  A.,  wishing  to  get  bills  discounted,  in- 
troduces B.,  as  his  partner,  to  0.,  but  the 
only  connection  between  A.  and  B.  is  in 
discounting  bills,  B.  is  not  hereby  so  held 
out  as  a  general  partner  with  A.  as  to  be 


liable  for  goods  afterwards  bought  by  A. 
of  a  person  who  had  been  informed  bj'  C. 
that  A.  and  B.  were  partners.  Berkom  v. 
Smith,  1  Esp.  29.  See  Ridgway  v.  Philip, 
5  Tyrw.  131.  A  person  is  not  liable  as 
partner  because  so  held  out,  who  has  signed 
his  name  to  an  instrument  importing  that 
the  subscribers  intend,  upon  the  fulfilment 
of  certain  conditions,  to  cairy  on  business 
ill  ])artnership.  He  has  not  thereby  held 
himself  out  to  the  world  as  a  partner  in 
a  company  already  formed.  Bourne  v. 
Freeth,  9  B.  &  C.  632.  Nor  is  one  who 
has  retired  from  a  firm,  and  given  due 
notice  thereof,  liable  as  a  partner  to  third 
persons  for  goods  supplied  to  a  ship,  be- 
cause, having  before  retirement  defectively 
conveyed  his  interest  as  a  partner  therein, 
his  name  appears  on  the  ship's  register 
down  to  a  i)eriod  subsequent  to  the  deliv- 
ery of  the  goods,  when  he  joins  with  the 
assignees  of  the  other  partners  in  making 
a  good  title  thereto  to  their  vendee.  M'lver 
V.  Humble,  16  East,  169.  See  Hoare  v. 
Dawes,  1  Doug.  371. 

(0  Whitney  v.  Ferris,  10  Johns.  66  ; 
McPherson  v.  Rathbone,  7  Wend.  216  ; 
Jennings  v.  Estes,  16  Me.  323  ;  Thornton 
V.  Kerr,  6  Ala.  823;  Tuttle  v.  Cooper, 
5  Pick.  414  ;  Anderson  v.  Levan,  1  W.  & 
S.  334  ;  Taylor  v.  Henderson,  1 7  S.  &  R. 
453.  See  Matthews  v.  Felch,  25  Vt.  536  ; 
McBride  v.  Protection  Ins.  Co.,  22  Conn. 
248,  259.  "  The  holding  one's  self  out  to 
the  world  as  a  partner,  as  contradistin- 
guished from  the  actual  relation  of  part- 
nership, imports  at  least  the  voluntary  act 
of  the  party  so  holding  himself  out.  It 
imydies  the  lending  of  his  name  to  the 
partnership  ;  and  is  altogether  incompati- 
ble with  the  want  of  knowledge  that  his 
name  has  been  so  used.  Thus,  in  the  or- 
dinary instances  of  its  occurrence,  when  a 


108 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


tion  that  he  knows  and  permits  them  ;  and  he  can  escape  the 
liability  only  by  proving  his  want  of  knowledge  and  consent,  (u) 

If  he  knew,  and  neither  consented  nor  refused,  nor  took  any 
steps  in  relation  to  it,  then  he  would  be  held  as  consenting ;  for 
he  is  in  fault,  and  he  should  suffer  rather  than  the  wholly  inno- 
cent persons  whom  he  permits  to  be  deceived.  And  if  he  does 
something  in  the  way  of  objecting,  the  question  then  is,  What 
and  how  much  ?  (v)  and  we  take  the  only  rule  to  be,  that  if  he  is 
held  out  as  partner,  and  knows  it,  he  is  chargeable  as  one,  unless 
he  docs  all  that  a  reasonable  and  honest  man  should  do,  under 
similar  circumstances,  to  assert  and  manifest  his  refusal,  and 
thereby  prevent  innocent  parties  from  being  misled.  If  he  does 
anything  which  might  fairly  produce  the  impression  that  he  is  a 
partner,  or,  when  another  does  this,  fails  to  do  what  he  should  to 
remove  or  prevent  this  impression,  then  he  is  as  much  liable  as 
if  he  calls  himself  a  partner. 

§  96.  Nominal  Partner  as  Party  in  Suit.  —  If  one  is  chargeable 
as  partner  because  so  held  out,  he  may  be  treated  as  one,  not 
only  by  being  made  responsible,  but  by  being  joined  with  the 
partners  in  a  suit  against  them,  {w)     Where  there  is  a  partner- 


person  allows  Lis  name  to  remain  in  a  firm, 
either  exposed  to  the  public  over  a  shop 
door,  or  to  be  used  in  printed  invoices  or 
bills  of  parcels,  or  to  be  published  in  adver- 
tisements, the  knowledge  of  the  j>arty  that 
his  name  is  used,  and  his  consent  thereto, 
is  the  very  ground  upon  which  he  is  es- 
topped from  disjinting  his  liability  as  part- 
ner."    Fox  V.  Clifton,  6  Bing.  776. 

(k)  See  cases  cited  in  preceding  notes. 
[Where  general  reputation  of  a  partner- 
ship was  so  widespread  that  it  must  have 
come  to  the  knowledge  of  the  parties  af- 
fected, who  did  not  deny  it,  this  is  a  suf- 
ficient holdding  out.  Tanner  &  Delaney 
Engine  Co.  v.  Hall,  86  Ala.  305,  5  So. 
584.] 

(v)  As  in  the  case  of  a  retiring  partner, 
who,  it  seems  to  be  settled,  must  notify 
the  dissolution  to  the  public  by  proper 
advertisements,  and,  perhaps,  to  custom- 
ers by  a  particular  notice.  Newsonie  v. 
Coles,  2  Camp.  617.  See  Leavitt  v.  Peck, 
3  Conn.  124.     See  also  post,  §  315  et  seq. 

(?/')  That  a  nominal  partner  may  be 
joined  in  a  suit  against  the  other  partners 
is  shown  by  almost  every  case  in  which 
this  liability  of  a  nominal  partner  is  tested. 


See  Goode  v.  Harrison,  5  B.  &  Aid.  156. 
That  one  lield  out  as  partner  may  be  a 
co-plaintiff  in  a  suit  with  the  other  part- 
ners, see  Guidon  v.  Robson,  2  Camp. 
302  ;  Kell  v.  Nainby,  10  B.  &  C.  20.  In 
Smith  V.  Sherwood,  10  Jiir.  214,  A.  filed  a 
bill  for  an  account  against  B.  &  C,  alleg- 
ing himself  a  partner  with  them.  B.  & 
C,  in  their  answer,  denied  the  existence 
of  the  partnership,  and  stated  that  the 
plaintiff  was  their  foreman,  whom  they 
had  contemplated  taking  into  partner- 
ship, and  whom,  therefore,  they  had  al- 
lowed to  hold  himself  out  as  their  partner 
in  many  ways.  They  admitted  that  the 
accounts  had  been  made  out  in  the  name 
of  B.,  C,  &  A.  ;  that,  in  a  certain  specifi- 
cation of  buildings  required  by  them,  the 
buildings  had  been  described  as  the  prop- 
erty of  B.,  C,  &  A.  ;  and  also  that  they 
had  served  A.  with  a  notice  to  dissolve 
partnership.  The  Vice-Chancellor  held, 
that  there  was  sufficient  proof  of  the  exist- 
ence of  a  partnership  between  B.,  C,  &  A. 
Such  a  partner  may  also  be  made  a  bank- 
rupt as  a  member  of  the  firm.  Jle  Krueger, 
2  Low.  66.  [1)1  re  Rowland,  L.  R.  1  Ch. 
421.1 


§  97.]      WHO    ARE    LIABLE    AS   PARTNERS    AS   TO   THIRD   PARTIES.      109 

ship  as  to  third  parties,  the  law  presumes  a  partnership  as 
between  themselves,  (y) 

[And  indeed  it  is  usually  impossible  for  the  plaintiff  to  know, 
before  bringing  suit,  that  the  nominal  partner  is  not  a  true 
partner. 

But  since  the  nominal  partner  is  not  a  partner  in  fact,  nor  inter- 
ested in  the  property  of  the  partnership,  he  should  not  be  joined 
as  plaintiff  in  an  action  on  a  simj^lc  contract  of  the  firm,  (jjy)  ^ 
But  if  the  nominal  partner  is  named  as  a  party  to  a  bill  or  note 
he  must  of  course  be  joined  in  any  action  brought  upon  it ;  since 
an  action  on  mercantile  paper  must  be  brought  by  or  against  the 
parlies  to  it.^] 

§  97.  Firm  Name.  —  Every  partnership  sliould  have  its  proper 
name  or  style.  It  may  be  whatever  name  the  partnership  chooses  ; 
(j^e')  and  this  name  need  not  be  prescribed  in  the  articles,  or 
determined  upon  by  express  agreement.  It  may  grow  out  of  the 
custom  of  the  firm,  and  the  manner  in  which  it  carries  on  its 
transactions.  (/)     If  it  have  no  name,  and  even  if  it  avoid  having 


(y)  Lord  EUenborough  in  Peacock   v.  to  have  no  interest  whatever  in  the  con- 
Peacock,  2  Camp.  4.5.  cern.     Parsons    v.   Crosby,    5    Esp.    199  ; 

{ijjj)  A  nominal  partner  need  not  join  Davenport  v.   Rackstrow,  1  C   &  P.  89; 

as  a   coplaintitf  in   an   action  on   a  con-  Kell  v,  Nainby,   10  B.  &  C.  20  ;  Glossop 

ract  made  by  the  firm.     Ex  jjarte  Alex-  v.  Colman,  1  Stark.  25  ;  Teed  v.  Elworthy, 

ander,    1    Glyn    &  J.    409  ;   Atkinson    v.  14  East,  210. 

Laing,  1  Dow.  &  R.  16  ;  Bernard  v.  Wil-  {ce)  Crawford  v.  Collins,  45  Barb.  269. 

COY,    2  Johns.    Cas.  374.      See    Allen    v.  (/)  In  Le  Roy  v.  Johnson,  2  Pet.  186, 

White,  Minor,  365.     On  the  other  hand,  Hoffman  &  Johnson  had  entered  into  arti- 

the   nominal   partner   may  be   a   witness  cles  of  copartnei'ship,  and  one  of  the  ques- 

for  the  plaintiff,  if  he  be  clearly  shown  tions  in  the  case  was,  what  the  firm-name 


1  Kell  V.  Nainby,  10  B.  &  C.  20  ;  Cox  v.  Hubbard,  4  C.  B.  317  ;  Spnrr  v.  Cass, 
L.  R.  5  Q.  B.  656  ;  Bishop  v.  Hall,  9  Gray,  430.  See  also  Teed  v.  Elworthy,  14  East, 
210  ;  Parsons  v.  Crosby,  5  Esp.  199  ;  Davenport  v.  Rackstrow,  1  C.  &  P.  89  ;  Harrison 
V.  Fitzhenry,  3  Esp.  238  ;  Glossop  v.  Colman,  1  Stark.  25  ;  Ex  parte  Watson,  19  Ves. 
461  ;  Kieran  v.  Sandars,  6  Ad.  &  El.  515  ;  Allen  v.  White,  Minor,  365. 

2  Guidon  v.  Robson,  2  Camp.  302.  In  that  case  the  action  was  brought  by  Guidon 
alone  against  Robson,  upon  a  bill  of  exchange,  drawn  in  the  name  of  Guidon  &  Hughes 
upon  Robson,  and  by  him  accepted.  Hughes  was  simply  a  clerk  of  Guidon.  Lord 
EUenborough  said  :  "There  being  such  a  person  as  Hughes,  I  am  clearly  of  opinion 
that  he  ought  to  have  been  joined  as  a  partner.  He  is  to  be  considered  in  all  respects 
a  partner  as  between  himself  and  the  rest  of  the  world.  Persons  in  trade  had  better  be 
very  cautious  how  they  add  a  fictitious  name  to  their  firm,  for  the  purpose  of  gaining 
credit.  But  where  the  name  of  a  real  person  is  inserted,  with  his  own  consent,  it  mat- 
ters not  what  agreement  there  may  be  between  him  and  those  who  share  the  profit  and 
loss.  They  are  equally  responsible,  and  the  contract  of  one  is  the  contract  of  all.  In 
this  case,  the  declaration  states  that  the  defendant  promised  to  ])ay  the  money  specified 
in  the  bill,  to  the  plaintiff  only,  whereas  she  promised  to  pay  it  to  the  plaintiff  jointly 
with  another  person.     The  variance  is  fatal." 


110 


THE    LAW   OF   PARTNERSHIP, 


[CH.    VI. 


one,  the  responsibilities  of  those  who  can  be  shown  to  be  actually 
partners  will  not  be  prevented  or  lessened.  (</)  [Any  name  may 
be  adoj)ted  as  the  firm  name,  even  though  of  a  form  appropriate 
for  a  corporation.]* 

But,  when  there  is  an  adopted  and  recognized  style,  nothing 
else,  as  such,  binds  the  partnership.^  But  though  a  partnership 
style  has  been  agreed  on  in  the  articles  or  otherwise,  and  has 
been  used  accordingly,  proof  that  another  name  is  also  custom- 


was.  Washington,  J.,  said  :  "  It  is  quite 
clear  that  the  name  of  this  firm  is  novvliere 
designated  in  tlie  articles  of  copartnership 
which  have  been  referred  to.  The  mode 
in  which  a  paiticular  branch  of  their  busi- 
ness was  to  be  conducted  cannot  reason  a- 
bl)'^  be  construed  to  give  a  name  to  the 
firm.  It  manifestly  had  no  allusion  to 
that  subject.  The  stipulation  that  the 
funds  necessary  for  the  purposes  of  the 
concern  should  be  raised  upon  the  paper 
of  Johnson,  to  be  indorsed  by  Hoffman, 
or  in  such  other  shape  as  might  be  found 
most  suitable  to  the  object  of  the  {larties, 
no  more  designated  Jacob  Hoflfman  than  it 
did  George  Johnson  as  the  name  of  the 
copartnership.  It  is  unnecessary  to  decide 
whether  the  omission  to  agree  upon  a  part- 
nership name  in  the  body  of  the  instru- 
ment was  or  was  not  supplied  by  the 
signatures  of  the  contracting  parties  to 
it ;  because  it  was  in  full  and  uncontra- 
dicted proof  that,  after  the  concern  went 
into  operation  under  the  articles,  their 
books  were  kept,  and  the  bills  and  ac- 
counts relating  to  their  business  were  made 
out  at  their  warehouse,  in  the  joint  names 
of  Hoffman  &  Johnson,  by  which  name 
the  firm  was  generally  known  in  Alexan- 
dria, and  in  which  they  acted  in  relation 
to  the  business  of  the  concern,  and  adver- 
tised in  the  newspapers.  Xow,  it  cannot 
be  questioned  but  that  a  name  thus  as- 
sumed, recognized,  and  publicly  used,  be- 
came the  legitimate  name  and  style  of  the 


firm,  not  less  so  than  if  it  had  been  adoi>ted 
by  the  articles  of  copartnership."  W.  G. 
&  C.  agreed  to  enter  into  partnership  ;  but 
the  articles  were  silent  as  to  tlie  name  of 
the  firm.  C.  bought  merchandise  on  joint 
account,  and  executed  a  note  therefor, 
signed  in  the  name  of  himself  &  Co.  It 
was  held,  that,  in  the  silence  of  the  arti- 
cles on  tlie  subject,  the  fair  presumption 
was  that  the  style  adopted  by  C.  was  that 
agreed  upon  by  the  parties  as  the  name  of 
the  firm.  Aspinwall  v.  Williams,  1  Ohio, 
38  ;  Drake  v.  Elwyn,  1  Gaines,  184.  In 
Kipley  v.  Colby,  23  N.  H.  443,  the  court 
said:  "Was  the  evidence  competent  to 
show  that  the  plaintiffs  constituted  the 
firm  of  S.  F.  Ripley  &  Co.  The  evidence 
was  direct  that  the  plaintiffs  agreed  to 
hire  a  stable  for  their  common  use  ;  that 
they  afterwards  occupied  this  stable  ac- 
cording to  this  agreement  ;  that  they  fur- 
nished mone)' in  the  stipulated  proportions 
to  pay  their  hostler,  and  to  pay  the  rent. 
They  made  these  repairs  on  the  building 
while  tliey  so  occupied  it.  Tiiey  entered 
and  held  under  a  lease  made  by  the  de- 
fendants to  S.  F.  Ripley  &  Co.  This 
must  be  hehl  competent  and  (juite  satis- 
factory evidence  that  the  plaintiflfs  were 
partners  under  the  firm  of  S.  F.  Ripley  & 
Co.,  and,  as  such,  made  the  repairs  in 
question." 

(g)  See   Bank   of    Rochester  v.    Mou- 
teath,  1  Den.  402. 


1  Carico  v.  Moore  (Ind.),  29  N.  E.  928  ;  Holbrook  v.  Insurance  Co.,  25  Minn.  229. 

•■2  Kirk  V.  Blurton,  9  M.  &  W.  284  ;  Faith  v.  Richmon<l,  11  A.  &  E.  339  ;  Norton 
V,  Thatcher,  8  Neb.  186.  See  also  Norton  v.  Seymour,  3  C.  B.  792  ;  Maclae  i;.  Suth- 
erland, 3  E.  &  B.  1  ;  Drake  v.  Elwyn,  1  Gaines,  184  ;  Michael  v.  Workman,  5  W.  Va. 
391. 

There  is  one  exception  to  the  general  rule  that  a  partner  can  bind  his  firm  by  the 
issue  of  commercial  paper  only  when  he  makes  use  of  the  firm  name.     At  common 


§  97.]      WHO    ARE    LIABLE    AS   PARTNERS    AS   TO    THIRD   PARTIES.     Ill 

aril}'  employed  in  the  dealings  of  the  firm,  with  the  concurrence 
of  all  the  partners,  or  even  of  the  managing  partner  alone,  will 
sultice  to  make  that  name  one  by  which  the  partnership  will  be 
bound.  (A)  [And  a  change  in  the  name  of  a  firm  without  any 
change  in  membership,  does  not  change  the  partnership  itself.]^ 
If  the  style  be  A.,  B.,&  Co.,  the  Co.  being  C,  a  note  signed  A., 
13.,  &  C,  in  which  they  jointly  and  severally  promise  to  pay,  is 
not  a  partnership  note.  («)  Neither  would  a  note  signed  "  A.  & 
B."  be  the  note  of  the  firm.  In  either  case,  or  almost  any  other, 
upon  proof  that  the  partnership  was  really  the  party  in  interest 


(/i)  Williamson  v.  Johnson,  1  B.  &  C. 
146.  Abbott,  C.  J.:  "It  appears  from 
the  evidence  tliat  Hopgootl,  Uixon,  and  a 
person  named  Lye,  carrying  on  business 
in  partnership  together,  were  known  by 
the  description  ot  Hopgood  &  Co.  All 
their  transactions  of  buying  and  selling 
were  carried  on  in  that  name  ;  but  Dixon, 
who  was  proved  to  be  the  manager  of  the 
whole  business,  was  also  in  the  habit  of 
indorsing  bills  in  the  name  of  Hopgood  & 
Fowler,  by  procuration,  for  the  purpose  of 
getting  them  discounted.  The  question 
then  is,  whether  that  sufficiently  proves 
the  existence  of  persons  using,  for  the 
purposes  of  business,  the  style  and  firm 
of  Ho[igood  &  Fowler  ?  At  the  trial  I  was 
at  first  inclined  to  yield  to  the  objections 
but  afterwards  altered  my  0[)inion.  I  still 
think  that,  as  between  third  persons,  there 
was  sufficient  evidence  of  an  imlorsement, 
by  persons  using  the  style  and  firm  of 
Hopgood  &  Fowler  ;  inasmuch  as  Dixon, 
the  managing  partner  in  the  firm  of  Hop- 
good  &  Co.,  was  in  the  habit  of  issuing 
bills  into  the  world,  indorsed  under  the 
former  designation."  [Wright  u.  Hooker, 
10  X.  Y.  :,1  ;  Moffat  v.  McKissick,  SBaxt. 
517.]    See   Faith  v.  Richmond,  11   A.   & 


E.  339  ;  Rogers  v.  Coit,  6  Hill,  322 ; 
Mifflin  V.  Smith,  17  S.  &  R  165  ;  Pal- 
iner  v.  Stephens,  1  Denio,  471  ;  Tarns  v. 
Hetner,  9  Fa.  411  ;  Le  Roy  v.  Johnson,  2 
Pet.  186. 

(i)  Perringf.  Hone,  4  Bing.  32  ;  Crouch 
V.  Bowman,  3  Humph.  209.  See  Marshall 
V.  Colman,  2  Jac.  &  W.  266  ;  Kendrick  v. 
Tarbell,  27  Vt.  512 ;  In  re  Warren,  1 
Ware  (Daveis),  320;  Filley  v.  Phelps, 
18  Conn.  294.  In  Lord  Galway  v.  Mat- 
thew &  Smithson,  1  Camp.  403,  where  the 
action  was  against  the  defendants  as  sur- 
viving partners,  Lord  Ellenborough  held, 
that  a  note  made  in  the  following  manner 
was  sufficient  on  the  face  of  it  to  bind  the 
whole  firm  •  "  Sixty  days  after  date,  I 
pay  Lord  V^iscount  Galway,  or  order,  2001. 
value  received.  For  J.  Matthew,  T.  Whit- 
smith,  and  T.  Smithson,  J.  Matthew." 
But  this  must  of  course  proceed  on  the 
presumption  that  the  names  of  all  the 
partners,  as  subscribed  by  the  partner 
acting  for  the  firm,  were  to  be  considered 
the  style  of  the  fimi  until  the  contrary 
•was  proved.  Caldwell  v.  Sithens,  5  Blackf. 
99.  In  Norton  v.  Seymour,  3  C.  B.  792, 
the  action  was  upon  a  note  drawn  in  the 
following  form  :   "  Two  months  after  date, 


law  a  parol  acceptance  of  a  bill  of  exchange  is  good  ;  therefore  where  a  partner  accepts 
a  firm  bill  by  signing  his  own  name,  this  charges  the  firm,  the  true  reason  being  that 
there  is  a  valid  parol  acceptance.  Mason  v.  Rumsey,  1  Camp.  384  ;  Jenkins  v.  lAIorris, 
16  M.  &  W.  877  ;  Lindus  v.  Bradwell,  5  C.  B.  583  ;  Jlay  v  Hewitt,  33  Ala.  161  ; 
Dougal  i;.  Cowles,  5  Day,  511  ;  Beach  v.  State  Bank,  2  Ind.  488  ;  Tolman  v.  Hanrahan, 
44  Wis.  133.     Contra,  Taber  v.  Cannon,  8  Met.  456. 

But  where  an  acceptance  is  required  by  statute  (e.  g.  19  &  20  Vict.  c.  57,  §  6)  to  be 
signed  by  the  party  charged,  the  signature  of  one  party  does  not  bind  the  firm. 
Heenan  v.  Na.sh,  8  ^linn.  407. 

1  Gill  V.  Ferri.s,  82  Mo.  156. 


112 


THE    LAW   OF   PARTNERSHIP. 


[CH.    VI. 


and  under  obligation,  and  that  another  style  than  that  of  the 
partnership  was  used  through  inadvertence  or  fraud,  the  partner- 
ship would  be  held  liable  ',  {j  )  but  no  signature  other  than  their 
own  would  hold  them  as  their  signature,  {k)  ^ 


we  promise  to  pay,"  &c.,  and  signed, 
"  Thomas  Seymour,  Sai'ali  Ayres,"  in  the 
liandwriting  of  Seymour.  The  defendant 
Ayres  had  formerly  carried  on  business  at 
tlie  place  at  which  the  goods,  in  respect  of 
which  the  above  note  had  been  given,  had 
been  su]iplied,  and  had  admitted  that  she 
was  in  partnership  with  Seymour.  A 
circular  and  invoice  issued  by  Seymour 
were  also  in  evidence  ;  the  circular  stating 
that  the  business  would  in  future  be  car- 
ried on  in  the  names  of  Seymour  &  Ayres, 
and  the  invoice  being  headed  Sej'mour  & 
Ayres.  It  was  objected,  on  the  part  of 
the  defendant  Ayres,  that,  assuming  the 
existence  of  a  partnership  between  herself 
and  Seymour,  the  latter  had  no  authority 
to  bind  her  by  a  bill  or  note  signed  other- 
wise than  with  the  name  of  the  firm.  On 
motion  for  a  new  trial  of  the  case,  Maule, 
J.,  said.  "  As  to  the  form  of  the  note,  it 
is  to  be  observed  that  it  is  signed  by  .Sey- 
mour in  the  name  of  himself  and  the  other 
member  of  the  firm.  Suppose  there  was 
no  authority  so  to  sign  it,  other  than  the 
general  authority  conferred  by  the  part- 
nership, I  should  hesitate  to  say  that  one 
of  two  partners  could  not  bind  the  other 
by  signing  the  true  names  of  both,  instead 
of  the  fictitious  name.  That,  however,  is 
not  the  question  here.  The  circular  states 
that  the  business  will  in  future  be  carried 
on  in  the  names  of  Seymour  &  Ayres ; 
that  is,  in  the  names  of  the  two  persons 
mentioned,  whatever  those  names  may  be. 
Thomas  Seymour  is  the  name  of  the  one, 
and  Sarah  Ayres  that  of  the  other.  There 
is,  therefore,  sufficient  evidence  of  a  spe- 
cial authority  to  sign  the  note  in  those 
names,  if  such  special  authority  were 
necessary." 

(j)  kinsman  v.  Dallam,  5  Monr.  382  ; 
Crozier  v.  Kirker,  4  Tex.  252.  In  Faith  v. 
Richmond,  11  Ad.  &  Ell.  339,  Richmond, 
Barbour,  &  Hannay  were  in  ])artnership, 
under   the   stvle   of  "The   Newcastle    & 


Sunderland  Wall's  End  Coal  Company." 
j\  promissory  note  was  made  by  Rich- 
mond, signed  as  follows  :  "  For  the  New- 
castle Coal  Company,  William  Richmond, 
manager.  At  the  London  and  Westminster 
Bank."  It  was  objected  that,  admitting 
Richmond  to  be  entitled,  as  a  partner,  to 
make  promissory  notes  on  behalf  of  The 
Newcastle  k  Sunderland  Wall's  End 
Coal  Company,  yet  this  was  not  a  note 
drawn  in  their  behalf,  and  could  not  bind 
them;  "The  Newcastle  Coal  Company" 
not  being  their  firm,  nor  the  London  & 
Westminster  Bank  one  with  which  they 
dealt.  The  Lord  Chief  Justice,  in  sum- 
ming up,  observed,  that  the  three  defend- 
ants were  partners,  and  Richmond  might 
draw  bills  or  notes  as  their  agent ;  and 
that  if  he  had  done  so  in  the  name  of  The 
Newcastle  &  Sunderland  Wall's  End  Coal 
Company,  or  if  the  plaintiff  had  been 
used  to  deal  with  them  as  the  Newcastle 
Coal  Company,  the  defendants  would  have 
been  bound  ;  but  he  left  it  to  the  jury 
to  say,  whether,  on  the  evidence,  the  note 
in  question  was  one  which  Richmond,  as 
a  partner  in  the  first-mentioned  firm,  had 
authority  to  draw.  A  verdict  being  found 
for  the  defendants,  the  Court  of  Queen's 
Bench  refused  a  rule  for  a  new  trial,  on 
the  ground  of  misdirection. 

(k)  "If,  in  the  body  of  a  promissory 
note,  made  by  one  partner,  the  language 
be,  'I  promise  to  pay,'  &c.,  but  the  note 
be  signed  with  the  copartnership  name, 
such  note  is  binding  on  the  firm,  and  not 
alone  on  the  partner  who  executed  it." 
Doty  V.  Bates,  11  Johns.  544.  But  if  an 
obligation  on  its  face  purports  to  be  the 
act  of  one  partner,  and  to  be  made  to  se- 
cure a  debt  due  from  him  individually, 
the  mere  fact  that  the  partnership  name 
is  signed  to  this  instrument  is  not  suffi- 
cient to  bind  the  firm  thereby.  Scott  v. 
Dansley,  12  Ala.  714.  If  a  note  be  made 
as  follows  :  "I  promise  to  pay,"  &c.,  and 


1  The  same  partners  sometimes  carry  on  business  in  different  ydaces  at  tlie  same 
time  ;  and  it  becomes  a  question  whether  there  is  more  than  one  partnership.     If  the 


§  98]       A^HO    ARE   LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.     113 

§  98.  Business  done  in  Name  of  single  Partner.  —  Questions  of 
this  kind  sunietiiues  arise  wliere  partners  in  business  do  not 
advertise  or  in  any  public  way  make  known  the  fact  of  partner- 
ship, but  transact  their  business  under  the  name  of  one  of  their 
partners  only.  (I)  When  parties  agree  to  transact  business  jointly, 
or  under  an  agreement  to  share  in  the  profits,  the  name  or  firm 
which  they  use  is  arbitrary  and  conventional.  Tliey  may  use  the 
name  of  both,  or  of  one  of  them  alone,  or  any  distinct  designation, 
by  which  all  will  be  included  and  bouud,  as  if  their  names  were 
used.  (7n)  But  though  the  business  of  a  C(^partnership  may  be 
transacted  in  the  name  of  one  partner,  that  partner  alone  cannot 
bring  an  action  for  the  price  of  goods  sold  by  the  house.  The 
otlujr  acting  and  ostensible  partners  must  Ije  co-plaintitfs.  {n) 
And  in  assumpsit  by  a  co-i)artnership,  the  plaintiffs  must  prove 
who  compose  the  firm,  (nw)  These  questions  are  much  compli- 
cated when  this  partner  docs  lousiness  on  his  own  account  also, 
for  then  the  signature  may  do  nothing  toward  determining  whether 

be   signed  "For  A.,  B.,  C,  &    D.,  A."  or  Crafts,  9  Met.  392.     And  where  the  name 

"  I3y  A.,"  it  seems  that  the  whole  firm  is  of   one  partner  is  the  style  of   the   firm, 

liable  thereon.    Galway  v.  Smith,  1  Camp,  that  partner's  7iame,  with  the  addition  of 

403  ;    Hall  v.  Smith,  1  B.  &  C.  407  ;    Ex  "&  Co."  will  not  operate  as  the  signature 

parte    Buckley,  14  M.  &  W.   469.     Whe-  of  the  partnership.     As  where  J.  B.  &  V. 

tlier  upon  such  a  note  there  is  a  separate  H.,  carrying  on  business  as  partners  un- 

right  of  action  against  the  executing  {)art-  der  the  name  of  J.  B.  &  C.  H.,  made  and 

iier,  see  post.  indorsed  a  bill  of  exchange  in  the  name 

(/)  The  style  of  a  copartnership  may  of  "J.  B.  &  Co.,"  it  was  held,  that  J.  B. 

be  the  name  of  one  of  its  members.  Ex  was  not  bound  thereby.     Kirk  v.  Blurton, 

pnr/e,  Bolitho,  1  Buck,  100  ;    South  Caro-  9  M.  &  W.  284.     See  Maclae  v.  Suther- 

liiia  Bank  v.  Case,  8  B.  &  C.  427  ;   Palmer  land,  3  E.  &  B.  34,  35 ;  Forbes  v.  Marshall, 

V  Stephens,  1  Denio,  471  ;  or  of  one  who  11  Exch.  176,  180. 
is   not  a   partner.   Bank  of  Rochester  v.  (n)  Wilson  r.  Wallace,  8  S.  &  R.  53. 

Monteath,   1  Denio,  402  ;  Williamson   v.  (im)  Patten  v.  Whitehead,  13  Rich.  L. 

Johnson,  1  B.  k  C.  146.  150.     See  Pursley  v.  Rimsey,  31  Ga.  403  ; 

(?;i)  Per   Shaw,    C.    J.,    in    Baring  v.  Tilford  v.  Ramsey,  37  Mo.  563. 

same  business  is  carried  on  simultaneouslj'  in  several  places  under  the  same  name, 
there  is  of  course  but  one  partnership.  The  fact  that  the  name  under  which  the  busi- 
ness is  carried  on  is  varied  would  not  of  itself  make  a  difference.  Where  the  same 
business  is  carried  on  by  the  same  parties  there  is  ordinarily  but  one  partnership, 
though  the  business  is  conducted  under  different  firm  names  in  the  difi'erent  places. 
Campbell  v.  Colorado  Coal  &  Iron  Co.,  9  Col.  60,  10  Pac.  248.  But  where  the  same 
partners  carry  on  different  lines  of  business  under  different  names,  there  are  distinct  pai-t- 
nersliips.  Second  Nat.  Bank  v.  Burt,  93  N.  Y.  233.  And  where  a  firm  is  dissolved 
without  assets,  and  the  same  partners  afterwards  unite  to  carry  on  again  the  satne 
business,  the  firms  are  distinct.  In  re  Nims,  16  Blatch.  439.  In  fact,  it  is  a  question 
neither  of  name,  time,  nor  place  ;  but  of  the  intention  of  the  parties  to  form  or  not  to 
form  a  new  association.  Where  A.  &  B.  do  business  as  A.  &  Co.,  and  A.  does  busi- 
ness in  another  place  under  the  same  name,  the  creditors  of  A.  in  connection  with  the 
latter  business  are  his  separate  creditors.     Loeb  v.  Morton,  63  Miss.  280. 


114  THE   LAW   OF   PARTNERSHIP.  [CH.    VI. 

a  i)iirchasc  was  made,  or  a  bill  accepted,  or  a  note  given  by  tliat 
individual  alone,  or  by  a  partnership  of  which  he  was  a  member. 
All  questions  of  this  kind  are  questions  of  fact  rather  than  of  law. 
Nothing  better  can  be  said,  perhaps,  than  that  they  must  be 
answered  accordingly  as  the  evidence  brings  them  under  this  or 
that  general  principle  of  the  law  of  partnership.  If,  for  example, 
the  character  of  the  goods  imrchased,  the  circumstances  of  the 
purchase,  the  use  made  of  them,  or  the  circumstances  attending 
the  giving  of  the  paper,  or  any  or  all  of  these,  sufficiently  indicate 
that  the  transaction  was  in  fact  on  account  of  the  partnership,  it 
will  be  held  as  the  transaction  of  the  partnership.^ 

1  Where  the  name  of  one  partner  is  used  as  the  tirin  name  it  will  be  presumed  that 
the  name  is  used  on  behalf  of  the  firm.  "  When  a  name  is  common  to  a  firm  and  to  an 
individual  member  of  that  iirm,  and  the  individual  member  carries  on  no  business  .se})a- 
rate  from  that  of  the  firm,  there  is  a  presumption  that  a  bill  of  excdiange  drawn,  accepted, 
or  indorsed  in  the  common  name  is  a  bill  drawn,  accepted,  or  indorsed  for  the  partner- 
ship, and  for  which  the  partnership  is  liable."  Yorkshire  Banking  Co.  v.  Beatsoii, 
5  C.  P.  D.  109,  116.  See  to  the  same  effect  South  Carolina  Bank  c.  Case,  8  B.  &  C. 
427  ;  Furze  v.  Sharwood,  2  Q.  B.  388  ;  Winship  v.  Bank  of  U.  S.,  5  Pet.  529  ;  Scott 
V.  Colmesnil,  7  J.  .1.  Marsh.  416  ;  Piank  of  Rochester  v.  Monteath,  1  Den.  402  ;  Ontario 
Bank  r.  Hennessey,  48  N.  Y.  545  ;  Oliphant  v.  Mathews.  "16  Barb.  608  ;  Graeff  v. 
Hitchman,  5  Watts,  454  :  Mifflin  v.  Smith,  17  S.  &  R.  165  Where,  however,  the 
ostensible  partner  does  other  busine.ss  on  his  own  account,  there  is  no  presumption  that 
the  name  is  used  as  the  firm  name ;  and  one  attempting  to  charge  the  firm  must  show 
that  it  w.as  so  used  as  to  bind  the  firm.  U.  S.  Bank  v.  Binney,  5  Mason,  176  ;  Buckner 
V.  Lee,  8  Ga.  285  ;  Mercantile  Bank  v.  Cox,  38  Me.  500  ;  Manuf.  &  Mech.  Bhuk  ?'.  Win- 
shiji,  5  Pick.  11  ;  Etheridge  v.  Binney,  9  Pick.  272;  Hastings  Nat.  Bank  v.  Hibbard, 
48  Mich.  452,  12  X.  W.  651  ;  Fosdick  v.  Van  Horn,  40  Oh.  St.  459.  See  Beakes  v.  Da 
Cnnha,  126  N.  Y.  293,  27  N.  E.  251.  In  that  case,  however,  it  is  enough  to  show  that 
the  name  was  in  fact  used  as  the  firm  name,  either  by  the  circumstances  at  the  time  or 
by  the  statement  at  the  time  of  the  ostensible  partner.  Ei:  parte  Bolitho,  1  Buck,  100; 
Trueman  v.  Loder,  11  A.  &  E.  589  ;  Etheridge  r.  Binney,  9  Pick.  272  ;  Gernon  v.  Hoyt, 
90  N.  Y.  681.  Thus  in  United  States  Bank  v.  Binney,  5  Mason.  189,  where  the  two 
Binneys  and  John  Win.ship  were  in  partnership,  under  the  firm  and  style  of  "John 
Winship,"  and  the  action  was  against  all  the  ])artners,  as  indorsers  upon  promissoiy 
notes  imloised  in  the  name  of  John  Winship,  Story,  J.,  said  :  "  The  notes  are  all 
indorsed  in  the  name  of  'John  Winship.'  For  aught,  therefore,  that  appears  on  the 
face  of  them,  they  were  notes  only  binding  him  personally.  The  plaintiffs  must,  then, 
go  farther  and  show,  either  expressly  or  by  implication,  that  these  notes  were  ottered 
by  Winsliip  as  notes  binding  the  firm,  and  not  merely  himself  ])er.s()nally,  as  that  the 
discounts  were  made  for  the  benefit  and  in  the  course  of  the  business  of  the  firm.  It  is 
not  sufficient  for  the  plaintiffs  to  prove  that  the  bank,  in  discounting  these  notes,  acted 
upon  the  belief  that  they  bound  the  fii-m,  and  were  for  the  benefit  and  business  of  the 
Iirm.  They  must  go  farther,  and  prove  that  that  belief  was  known  to  and  sanctioned 
by  Winship  him.self  in  offering  notes,  and  that  he  intentionally  held  out  to  them  that 
the  discounts  were  for  the  credit  and  on  the  account  of  the  firm,  and  that  his  indorse- 
ment was  the  indorsement  of  the  firm  and  to  bind  them  ;  and  that  the  bank  discounted 
the  notes  upon  the  faith  of  such  acts  and  representations  of  Win.ship.  The  jury  will 
judge,  from  the  whole  evidence,  how  the  case  stands  in  these  respects.  The  mere  fact 
that  the  discounts  so  procured  were  applied  to  the  use  of  the  firm  is  not,  of  itself,  suffi- 
cient to  prove  that  the  discounts  were  ]irocured  on  account  of  the  firm.  It  is  a  strong 
circumstance,  entitled  to  weight,  but  not  decisive." 


§  99.]     WHO    ARE   LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.      115 

In  all  such  cases,  it  must  be  remembered  that  the  individual 
partner  whose  name  is  used,  has,  by  law,  full  authority  to  repre- 
sent and  act  for  the  rest,  and  use  his  own  name  as  the  name  of 
the  firm  ;  and  his  representations  in  a  matter  of  business  which 
mi<^ht  be  theirs  bind  them  all,  however  fraudulent  on  his  part. 
If,  therefore,  when  he  purchases  goods,  or  gives  a  note,  or  offers 
a  note  for  discount  with  his  indorsement,  he  rei)resents  that  he 
acts  for  the  partnership,  and  the  person  with  whom  he  deals 
believes  honestly  and  rationally  that  he  does  so  act,  the  partner- 
ship, and  of  course  all  the  partners,  are  bound,  although  no  name 
but  that  of  the  individual  was  used  in  the  transaction. 

The  use  of  such  a  name  as  usually  indicates  partnership,  even 
though  it  may  be  primd  facie  evidence  of  partnership,  is  slight  and 
easily  rebuttable.^ 

§  99.  Ostensible  Partners  pass  Property.  —  [Where  there  is  a 
secret  partner,  any  dealing  with  the  firm  property  by  the  osten- 
sible partnere  would  seem  to  bind  the  secret  partners.  So  where 
one  is  an  ostensible  sole  trader,  a  pledge  of  the  property  for  his 
private  debt  is  binding  upon  the  secret  partner.''  So  where  the 
firm  appears  to  consist  of  A.  &  B.,  who  transfer  firm  property 
in  payment  of  their  joint  debt,  this  gives  the  creditor  a  valid 
title  as  agaiiiijt  a  secret  partner.'^     On  the  other  hand,  where  a 

1  Charman  v.  Heiishaw,  15  Gray,  293.  Thp  use  of  sucli  a  name  gives  rise  to  no  pre- 
sumption of  partnership.  Brenuan  v.  Pardridge,  67  Mich.  449,35  X.  W.  85.  Where  a 
statute  provides  that  action  may  be  brought  against  a  partnership  where  it  does  busi- 
ui'ss,  it  has  therefore  been  hekl  that  a  sole  trader  who  in  doing  business  added  "  &  Co." 
to  his  name  could  not  be  sued  where  he  did  business.  Stilling  t'.  Heintzman,  42  Mich. 
449,  4  N.  \V.  165.  The  opposite  conclusion  was  reached  iu  Rosenbaum  v.  Hayden,  22 
Neb.  744,  36  N.  W.  147,  on  the  ground  of  estoppel  ;  but  th*  defect  being  jurisdictional, 
it  would  seem  that  it  could  not  be  so  cured. 

2  Raba  v.  Eyland,  Gow,  132;  Cammack  v.  Johnson,  1  Green  Ch.  163;  Motley?;. 
Frank,  87  Va.  432,  13  S.  E.  26.     See  Coidiran  v.  Anderson  Co.  Bank,  83  Ky.  36. 

*  Tupper  V.  Haythorne,  Gow,  135,  n.  ;  Reid  v.  HoUinshead,  4  B.  &  C.  867  ;  Locke 
V.  Lewis,  124  Mass.  1.  See  Edmunds  v.  Bushell,  L.  R,  1  Q.  B.  97  ;  Dean  v.  Plankett, 
136  Mass.  195.  It  has  been  said  (e.  g.,  2  Bates  Part.  1046)  that  Locke  v.  Lewis  is 
opposed  to  the  doctrine  stated  above,  that  if  an  individual  creditor  of  a  partner  takes 
firm  pro^ierty  in  payment  of  his  private  debt  the  creditor  cannot  hold  it  even  if  he  was 
ignorant  that  the  pioperty  was  firm  property.  Ante,  §  90,  n.  1.  That  the  case  is  not 
opposed  to  that  doctrine  will  appear  from  an  examination  of  the  opinion.  It  was  an 
action  of  re])levin  for  three  carriages.  The  plaintiff  had  been  in  partnership  with  I.  L. 
and  D.  C.  Robinson  in  the  business  of  manufacturing  carriages  ;  but  the  firm  was  dis- 
solvetl,  and  plaintiff^  convej-ed  his  share  of  the  business  to  the  Robinsons,  and  received 
in  return  a  note  signed  by  them.  He  afterwards  accepted  from  them,  in  payment  of 
the  note,  the  three  carriages  in  question,  for  which  they  gave  him  a  bill  receipted  in 
the  name  of  the  firm.  Meanwhile,  however,  they  had  formed  a  special  jiartnership 
with  three  others  ;  but  this  new  partnership  was  unknown  to  the  plaintiff",  and  the 
business  was  continued  as  before.  Tlie  new  firm  attached  the  carriages,  and  this  action 
was  brought  against  the  attaching  sheriff.     In  the  course  of  the  opinion,  Gray,  C.  J., 


116  THE   LAW   OF   PARTNERSHIP.  [CH.    VI. 

partner  so  deals  with  his  property  as  to  make  it  apparently 
partnership  proi)erty,  one  who  buys  it  from  the  other  partner 
gets  a  valid  title. ^] 

§  100.  Liability  for  Tort  of  a  Partner.  —  Partners  are  liable  in 
solido  for  the  tort  of  one,  if  that  tort  were  committed  by  him  as  a 
])artner,  and  in  the  course  of  the  business  of  the  partnership.  This 
principle  is  frequently  illustrated  by  cases  in  which  a  partnership 
is  held  liable  for  injury  caused  to  third  persons  by  their  having 
acted  upon  the  false  and  deceitful  representations  made  to  them 
by  one  partner.  (J) 

(b)  Patten  r.  Garney,  17  Mass.  182  ;  assumpsit  to  recover  the  value  of  the 
DoieniusD.  McCormick,  7  Gill,  49  ;  Locke  goods  sold,  or  in  an  action  on  the  case  to 
V.  Stearns,  1  Met.  560  ;  National  Ex-  recover  damages  for  the  deceit  practised, 
change  Co.  v.  Drew,  2  Macq.  103;  Blair  Hawkins  v.  Ajipleby,  2  Sandf.  421.  In 
V.  Bromlej',  5  Hare,  542,  2  Phillips,  354.  one  case  (Willettu.  Chambers,  Cowp.  814), 
See  Brydges  v.  BranfiU,  12  Sim.  369;  i)articiilar  circumstances  were  held  to  make 
Coomer  v.  Bromley,  5  De  G.  &  S.  532  ;  a  partner  liable  for  a  fi-aud  committed  by 
Chester  v.  Dickerson,  51  Barb.  349.  As  his  copartner  before  the  beginning  of  their 
wiiere  the  plaintiffs  were  induced  to  take  ])artnership.  The  facts  were  these  :  Prior 
the  note  of  a  third  party  in  payment  for  to  any  partnership  between  the  defendant 
goods  sold  upon  the  representation  of  one  and  Dudley,  an  attorney  and  conveyancer, 
of  the  defendants,  who  were  partners,  that  the  latter,  in  the  year  1771,  received  of  a 
it  was  good,  when,  in  fact,  the  defendants  Mr.  Bindley  the  sum  of  350^.,  to  be  laid 
knew  the  makers  were  insolvent,  and  the  out  on  real  security.  Dudley  accordingly 
note  worthless  ;  it  was  held,  that  the  defen-  furnished  him  with  a  mortgage  from  a  Mr. 
dants  were  liable,  either  in  an  action  of  Hughes  to  that  amount,  which,  as  it  after- 
said  :  "If  the  private  creditor  has  no  knowledge  that  tlie  property  belongs  to  the  part- 
nership, and  tlie  partnership  has  entrusted  its  property  to  one  partner  in  such  a  manner 
as  to  enable  him  to  deal  with  it  as  his  own,  and  to  induce  the  public  to  believe  it  to  be 
his,  then  the  other  partners  fall  within  the  rule  that  when  one  of  two  innocent  pei'sons 
nmst  suffer,  that  one  must  suffer  who  bj'  his  acts  or  conduct  has  afforded  tlie  means  of 
committing  the  fraud.  To  hold  a  sale  or  a  contract  by  the  ostensible  partners  to  be 
absolutel)'  void,  for  abuse  of  authority  by  them,  so  as  to  confer  no  title  and  no  rights 
upon  a  person  dealing  with  them  in  good  faith,  within  the  apparent  scope  of  their 
authority  and  right,  with  no  knowledge  of  any  abuse  thereof,  would  be  to  apply  to 
partners,  having  both  title  and  authority  amjde  for  the  purpose,  a  stricter  and  narrower 
rule  than  is  applied  to  an  ordinary  agent  exercising  a  bare  authority  without  interest. 
.  .  .  The  case  upon  which  the  defendant  principally  relies  is  Rogers  v.  Batchelor,  12 
Pi't.  221.  But  nothing  was  adjudged  in  that  case  inconsistent  with  the  views  above 
stated.  .  .  .  "We  would  not  be  understood  to  affirm  that  the  mere  belief  of  the 
separate  creditor  that  the  property  which  he  receives  does  not  belong  to  the  partner- 
ship will  of  itself  be  sufficient  to  entitle  him  to  hold  it,  if  there  has  been  nothing  in 
the  acts  or  conduct  of  the  other  partners  to  induce  the  belief  that  the  partners  with 
whom  he  dealt  were  the  sole  owners.  Chazournes  v.  Edwanls,  3  Pick.  11 ;  Gordon  v. 
Ellis,  2C.  B.  825,  829.  .  .  .  If  the  plaintiff,  by  the  manner  in  which  the  general  partners 
dealt,  and  had  been  allowed  by  the  special  ]>artners  to  deal,  with  the  property  sold  to 
him,  was  induced  to  believe  that  it  was  the  property  of  the  general  partners  only,  and, 
acting  on  such  belief,  bought  it  in  good  faith,  and  with  no  notice  or  knowledge  that 
the  .s]>eri,al  partners,  or  any  other  person  than  the  general  partners,  had  any  interest 
therein,  he  was  entitled  to  maintain  this  action." 

I-  Birks  V.  French,  21  Kas.  238 ;  Taylor  v.  Wilson,  58  X.  H.  465  {semble). 


§  101  ]     WHO    ARE    LIABLE    AS    PARTNERS    AS    TO    THIRD    PARTIES.    117 

§  101.  Notice  to  one  Partner.  —  [Upon  a  similar  principle,  notice 
of  a  certain  state  of  facts,  if  proved  as  to  one  partner  in  the  course 


ward    appeared,  Dudley  had  forged.      In 
1776,  Dudley  and  Chambers  entered  into 
partnership,  shortly  after  which    Bindley 
wanted  to  call  in  his  money.     The  pre- 
tended mortgagor  was  represented  at  the 
same  time  to  want  a  further  sum  of  150/., 
which,  added  to   the   original    mortgage- 
money,    made  together  the  sum  of  500Z. 
The  plaintiff,  Willett,  was  read}' to  advance 
this   sum.     And,   in  consideration  of  his 
doing  so,  an  assignment  was  made  to  him 
of   the   false   mortgage,    before    made    to 
Bindley.     As  to  180/.  imrt  of  this  sum  of 
500/.,  Willett  paid  it  into  Dudley's  office 
to  Chambers  ;  who  gave  for  it  his  separate 
receipt,  Dudley  not  being  at  home.     He 
subsequently  called  at  the  office,  and  paid 
the  residue  to  Dudley,  who  gave  therefor 
his  separate  receipt.     It  was  admitted  that 
Chambers  was  in  no  respect  privy  to  the 
forgery.     Upon  these  facts,  the  jury  hav- 
ing found  for  the  plaintiff,   the  Court  of 
King's  Bench  held,  that  the  verdict  should 
stand  ;    Lord    Jlansfield     saying:     "The 
defendant  suffers  by  the  rascality  of  a  man 
who  had  a  ver}'  good  character.     I  am  very 
sorry  for  the  defendant ;  but,    upon  this 
evidence,  I  cannot  say  liut  that  it  is  a  part- 
nership transaction."     See,  in  illustration 
of    the    general    principle    of    the    text, 
Brydges  v.  Branfill,  6  Jur.  310,  s.  c.   12 
Sim.   369  ;  M'Farland  v.    Crary,   8  Cow. 
258  ;  Lowell   v.    Hicks,    2   Younge  &    C. 
481  ;    Blight   i;.    Tobin,    7    Monroe,    617  ; 
Hadfield  V.  Jameson,  2  Munf.  53  ;  Simms 
V.   Brutton,  5  Exch.  802  ;  State  v.   Neal, 
27  N.  H.   131.     In  this  last  case  it  was 
held,  that  if  one  of  two  persons  unlawfully 
sell  spirituous  liquors  in  pursuance  of  an 
agreement   between   them,    and   for  their 
joint  account  and  benefit,  the  other  party 
may  be  liable  in  an  indictment  for  the  sale. 
State    V.    Bierman,    1  Strobh.    256.      See 
Townsend   v.    Bogart,    11    Abb.    Pr.    355 
(doubted  in  Stewart  v.  Levy,  36  Cal.  159)  ; 
Gray  v.  Cropper,  1   Allen,  337  ;  Taylor  v. 
Jones,  42  N.  H.  25;  McKnight  v.  Ratcliffe, 
44  Pa.  156.    "  If  one  partner  of  a  firm  col- 
ludes with  one  of  another  firm,  in  a  trans- 
action connected  with  the  partnership,  the 
partners  of   the  person    so   colluding  are 
liable  for  damages  to  the  injured  firm,  by 


reason  of  that  partner's  misconduct."     Per 
Lord  Tenterden  in  Longman    v.    Pole,  1 
Dawson  &  Lloyd,  126,  1  Mood.  &  Malk. 
223.       In   that    case,    the   facts   were    as 
follows  :  The  plaintiffs,  Longman  &  Co., 
bankers,  with  the  defendants,  Pole  &  Co., 
and    Hunt,    a   partner  in    the    house    of 
Longman  h  Co.,  sent  the  cashier  to  the 
defendants   with    cash   to    take    up   bills 
accepted  by  him  in  the  name  of  the  firm 
and  coming  due  the  next  day.     He  accor- 
dingly took  uj)  the  bills,  but  by  Hunt's 
order  did  not  enter  them  in  the  plaintiff's 
books.     About  the  same  time,  Downes,  a 
partner  in  Pole  &   Co.,    told  one  of  the 
defendants'  clerks  that  a  bill  of  Longman's 
would  come  in  on  such  a  daj',  which  he 
was   to   pay  and  give  to  him   (Downes), 
debiting  Hunt  with  it  in  the  note-book, 
so  that  it  might  not  go  into  the  ledger. 
Downes  afterwards  gave  similar  directions 
resjiecting  another  bill.     Both  these  bills, 
which  were  acceptances  b}^  Hunt  in   the 
name  of  the  firm,  were  paid  and  entered  in 
the  note-book  to   the  debit  of  Hunt  indi- 
vidually ;  and  the  cash  payments  made  by 
Hunt  to  provide  for  these  bills  were  also 
entered  in  the  same  book  to  his  credit,  so 
that  no  trace  of  these  proceedings  appeared 
in  the  pass-book  of  the  defendants  or  the 
check-book  of  the  jilaintiffs.     The  cashier 
who  gave  the  above  statement  also  admitted 
that  there  were   bills  on   Hunt's   private 
account  to  a  large  amount,  which  appeared 
in  the  pass-book  (which  the  plaintiffs  were 
not  in  the  habit  of  examining),  but  not  in 
their  check-book.     It  also  appeared,  that, 
at  the  time  of  these  transactions,  Hunt  had 
a  large  private  acccmnt  with  the  defend- 
ant.    Upon  this  state  of  facts.  Lord  Ten- 
terden held  the  action  as  brought  clearly 
maintainable.     But  the  jury  found  a  ver- 
dict for  the  defendants,  the  collusion  of 
Downes  not  being  established  with  suffi- 
cient certainty.     The  rule  respecting  the 
liability  of  partners  for  each  other's  torts 
is,  as  we  have  seen,  confined  to  such  torts 
as  a  partner  commits  in  that  character, 
and  in  the  course  of  the  jmrtnership  busi- 
ness.     Hence,  where  three  partners  were 
sued  in  an  action  of  trespass,  on  account  of 
the  wrongful  ejectment  by  one  partner  of 


118  THE   LAW   OF   PARTNERSHIP.  [CH.    VT. 

of  the  business,  will  charge  all.^  Thus  in  an  action  upon  a  prom- 
issory note,  the  firm  in  order  to  show  bona  fides  must  show  it  as  to 
each  partner ;  ^  and  where  a  firm  takes  a  conveyance  or  mortgage 
of  land,  notice  to  one  partner  of  a  defect  in  the  title  is  notice  to 
the  firm.-"^  So  notice  of  dishonor  of  commercial  paper  to  one 
partner  is  notice  to  the  firm.^ 

Notice  to  a  partner  before  he  entered  into  the  partnership  is 
clearly  not  chargeable  to  the  firm,  unless  there  is  some  connec- 
tion between  the  notice  and  the  final  transaction.^  And  it  has  even 
been  held  that  notice  to  one  partner  prior  to  the  dealings  by  the 
firm,  where  the  business  was  done  entirely  by  the  other  partner, 
is  not  notice  to  the  firm."     It  would  seem  clear,  at  any  rate,  tliat 

the  tenant  of  a  house,  it  was  ruled  that  tort,  not  done  in  the  interests  of  the  part- 
one  partner  could  not  involve  his  copart-  nership,  will  not  render  the  partnership 
ners  in  such  a  wrong  ;  though  there  might  liable.  Wilson  v.  Turnnian,  6  M.  &  G. 
he  exceptions  to  the  rule,  as  where  the  236  ;  Grund  v.  Van  Vlack,  69  111.  478. 
tres])ass  was  in  the  nature  of  a  taking  In  Pierce  v.  Jackson,  6  ]\Iass.  245,  Parsons, 
which  was  available  to  the  partnership,  C.  J.,  saj's  :  "  A  fraud  committed  by  one 
and  they  afterwaids  concurred  in  it  and  of  the  jjartners  shall  not  charge,  the  part- 
received  the  benefit  of  it  ;  or  where,  before  nership."  And  in  Sherwood  i;.  Marwick, 
the  trespass,  they  all  joined  in  ordering  it.  5  Rle.  295,  it  seems  to  have  been  held, 
Petrie  v.  Lamont,  1  Car.  &  M.  9.3.  So  an  that  one  partner  cannot  be  made  liable  for 
innocent  j)artner  is  not  liable  for  a  deceit  the  fraud  of  another,  without  proof  of 
practised  by  one  of  the  partners  upon  a  actual  participation.  But  in  Locke  v. 
third  person,  by  the  sale  to  him  of  such  Stearns,  1  Met.  564,  where  all  tlie  partners 
partner's  interest  in  the  firm.  Schwa-  were  held  liable  for  the  deceit  of  one, 
backer  v.  Rid<lle,  84  111.  517.  ['i'herefore  Shaw,  C.  J.,  cites  and  explains  both  the 
where  tlie  guilty  partner  took  a  note  from  above  cases.  He  considers  them  to  have 
the  jiurchaser  for  the  purchase-money,  and  been  decided  on  their  special  facts,  and  to 
transferred  it  for  value  to  an  innocent  be  not  inconsistent  with  the  general  prin- 
partner,  the  latter  can  enforce  j)ayment  of  ciple  of  law  under  discussion.  See  Atkin- 
the  note.  Liddell  r.  Grain,  53  Tex.  549.]  son  v.  Mackreth,  L.  R.  2  Eq.  570,  and 
Mere  subsequent  approval  of  a  partner's  Linton  v.   Hurley,  14  Gray,   191. 

1  Steele  v.  Stuart,  L.  R.  2  Eq.  84  ;  In  re  Worcester  Corn  Exchange  Co.,  3  De  G. 
M.  &  G.  180  ;  Merchants'  Bank  v.  Rudolf,  5  Neb.  527  ;  State  v.  Linaweaver,  3  Head, 
51.  So  where  action  is  brought  for  injury  caused  by  the  falling  of  a  gate  belonging 
to  the  partnership,  knowledge  of  its  dangerous  condition  brought  home  to  one  partner, 
charges  the  firm.  Newall  v.  Bartlett,  114  N.  Y.  399,  21  IST.  E.  990.  So  where  a  statute 
allowed  double  damages  in  case  timber  was  knoivingly  cut  on  the  land  of  a  third  person, 
knowledge  of  one  member  of  a  firm  responsible  for  the  wrongful  cutting  of  timber  makes 
all  the  firm  liable  to  the  statutory  damages.    Tucker  v.  Cole,  54  Wis.  539,  11  N.  W.  703. 

2  Frank  v.  Blake,  58  la.  750,  13  N.  W.  50  ;  Smith  v.  Hall,  5  Bosw.  319. 

3  Overall  v.  Taylor,  (Ala.)  11  So.  738  ;  Watson  i'.  Wells,  5  Conn.  468  ;  Sanders  v. 
Ruddle,  2  T.  B.  Mon.  139.  So  of  a  lack  of  authority  to  convey  personal  property. 
Gray  v.  Church,  84  Ga.  125,  10  S.  E.  539;  Ruckman  v.  Decker,  23  N.  J.  Eq.  283; 
Williams  V.  Roberts,  6  Gobi.  493.  But  see  Ringo  v.  Wing,  49  Ark.  457,  5  S.  W.  787, 
where  the  point  was  not  taken. 

*  See  post  §  1 46. 

6  Williamson  v.  Barbour,  9  Ch.  D.  529  (semble). 

6  Baldwin  v.  Leonard,  39  Vt.  260. 


§  102.]     WHO    ARE   LIABLE    AS    PARTNERS    AS   TO   THIRD    PARTIES.     119 

notice  to  a  mere  stockholder  in  a  joint-stock  bank  would  not  be 
notice  to  the  bank  so  as  to  affect  a  transaction  conducted  for  tlie 
bank  entirely  by  the  directors.  And  such  is  the  rule  in  England.^ 
It  IS  otherwise  held  in  Pennsylvania.^] 

§  102,  Malice  or  Fraud  of  one  Partner.  —  [The  same  principle 
applies  when  a  specific  state  of  mind  is  required  for  an  action  of  tort. 
Thus  whore  a  writing  published  by  a  firm  is  privileged  unless  there 
was  malice,  the  malice  of  one  partner  renders  all  the  partners 
liable,^  and  where  a  firm  had  obtained  a  discharge  in  bankruptcy, 
the  whole  firm  is  liable  for  a  debt  fraudulently  contracted  l)efore 
bankruptcy  by  t)ne  j)artner.'*  Ikit  the  innocent  partner  cannot  be 
declared  guilty  of  actual  fraud. ^  One  partner  may  be  sul)jected 
to  exemplary  damages  because  of  the  fraud  of  his  copartner.*'] 

It  is  not  always  easy  to  draw  the  line  between  such  cases  and 
those  in  which  the  partners  are  not  liable.  The  fact  that  money 
})rocured  by  a  fraud  becomes  j)artnership  stock  does  not  render 
them  liable  without  their  participation  in  or  consent  to  the  fraud. 
At  the  same  time,  if  money  be  raised  in  the  course  of  partnership 
business,  by  the  fraud  of  one  of  the  partners,  the  other  partners 
will  not  be  relieved  from  their  liability  for  the  fraud,  merely  by 
the  want  of  evidence  that  the  money  so  raised  was  applied  to  the 
use  or  benefit  of  the  firm,  (c) 

(e)  Compare  iMamif.  &  iMech.  Rank  v.  in    an  action  to  recover  dainajifes  for  the 

Gore  &  (jraftoii,  15  Mass   75,  with   Boai-ti-  deceit,    the    injured    part}',    not   knowing 

man  v.  Gore,  1.5  Mass.  331.     The  firm  is  the   other   jiarties,    need    not  join    them, 

liable  for  frauds  or  torts  practised  by  one  Leslie  v.  Wiley,  47  N.    V^.  649.     See  also 

of  the  partners  in  the   partnership  busi-  Dart  v.  Walker,  3  Daly,   136.     The  firm 

ness,  though  the  act  was  unknown  to  the  is  not  liable   lor  a    tort  by  one  partner, 

other  partners.     Chester  v.   Diekeison,  52  when  the  act  is  known,  by  the  party  m- 

Barb.  349  ;  Stewart  v   Levy,  36  Cal.  159  ;  jured,    to  be  in   violation   of  law.     Leslie 

Wolf  V.  Mills,  56  111.  360;    Chambers  v.  v.  Wiley,  47  N.  Y.  649.     See  also  Dart  v. 

Clearwater,  1  Abb.  Ajip.  341  ;  -lackson  v.  Walker,  3  Daly,  136. 
Todd,  56  Ind.   406,   75  Lid.   472.     But, 

1  Sp-  Richmond  Ry.  &  Electric  Co.  v.  Dick,  52  F.  R.  879;  Powles  v.  Page,  3 
C.  B.  16. 

2  Mci'lurkan  v.  Byers,  74  Pa.  405. 

3  Lothrop  V.  Adams,  133  Mass.  471. 

*  Cooper  V.  Prichard,  11  Q.  B.  D.  351  (C.  A.)  So  each  member  of  a  firm  is  civilly 
liable  for  a  violation  of  the  revenue  laws  by  a  copartner,  whether  with  oi  without 
the  knowledge  of  the  others      United  States  v   Thomasson,  4  Biss.  99. 

5  Stewart  v.  Levy,  36  Cal.  159.  Therefore  when  one  partner  has  obtained  credit 
for  gooils  sold  the  firm  by  false  ivpresentations,  the  innocent  partner  cannot  be  arrested 
on  civil  process,  under  a  statute  authorizing  arrest  in  case  of  fraud  only.  McNeeiy  v. 
Hayne.s,  76  M.  V.  122.  And  one  partner  cannot  be  punished  undci  a  statute  punish- 
ing fraudulent  delifors,  because  of  fraudulent  coiicealiiieut  by  his  copartner.  ■  Watson 
V.  Hincbuian,  42  Mich.  27,  3  N.  W.  236. 

'^  Robinson  c    Goings,  63  Miss.  500  ;  Peckhain  Iron  Co.  v.  Harper,  41  Oh.  St.  100. 


120 


THE   LAW    OF   PARTNERSHIP. 


[CH.  VI. 


§  103.  Wrongful  dealing  with  Money. —  If  a  partner  steals  moiie}', 
and  deposits  it  to  partnersliip  account,  innocent  partners  would  not 
be  liable  for  tlie  tort,  althougb  assumpsit  for  money  had  and 
received  might  lie.  {d) 


(d)  Rapp  V.  Latham,  2  B.  &  Aid.  795. 
Latham  &  Parry  were  in  paituership  as 
wine  merchants.  Parry,  being  the  man- 
aging jmrtuer,  in  January,  1812,  wrote  to 
the  ]ilaintitl'  tliat  he  had  an  opportunity 
of  [jurchasiiig  si.\ty-one  pipes  of  port,  at 
65/.  per  ]iipe,  and  he  desired  the  plaintiff 
to  remit  the  monej'  to  pay  the  price  of 
such  wine  and  the  duties  thereon.  The 
plaintiff  accordingly  remitted  the  money, 
and  Parry  represented  that  he  made  the 
pui'chase,  and  afterward,  in  the  name  of  the 
firm,  transmitted  an  account  to  the  i)lain- 
tiff,  stating  that  thirty  of  these  sixty-one 
pipes  have  been  resold  at  the  price  of  8-t/. 
per  pipe,  and  i)aid  the  [)roceeds  of  such 
pretended  sale  to  the  plaintiff".  Other 
similar  tiansactions  took  place,  running 
througli  a  period  of  about  one  year.  Each 
transaction  formed  the  subject  of  a  separ- 
ate account,  and  all  the  purchases  were 
described  as  being  made  at  a  certain  speci- 
fied rate  per  pipe.  The  plaintiff  conceived 
that  Parry  was  in  fact  laying  out  his 
money  in  bona  fide  jnirchases  of  wine, 
and  that  he  actually  resold  part  of  such 
wine  as  he  represented.  But,  the  defend- 
ants failirig,  ii  appeared  that  the  transac- 
tions were  wholly  fictitious,  though  the 
defendant,  Latham,  did  not  know  that 
they  were  so.  Upon  the  whole  account, 
the  plaintiff  had  received  from  the  sup- 
posed resales  more  Ujoney  than  he  had 
advanced  ;  but  he  contended  that  he  had  a 
right,  to  take  each  transaction  separately, 
and  to  charge  the  defendants  with  the 
amount  of  the  money  advanced  to  them  for 
the  purchase  of  every  ])ipe  of  wine  not 
accounted  for.  It  was  held,  that  the 
plaintiff  Iiaii  such  right ;  that  Latham 
could  not  say  that  those  transactions  were 
fictitious  wliich  Parry  had  represented  to 
be  real  ;  ami  that,  beside  retaining  all  the 
money  tliat  had  been  paid  to  him  on  ac- 
count of  those  fictitious  transactions,  the 
plaintiff  was  also  entitled  to  recover  back 
the  sums  advanced  for  the  other  supposed 
purchases,  as  money  advanced  by  him 
upon  a  consideration  not  performed,  and 


as,  therefore,  had  and  received  by  the 
defendant  to  his  use.  In  Kilby  v.  Wil- 
son, Ryan  &  M.  178,  it  was  held,  that  no 
l)roperty  could  be  vested  in  a  i)artnership 
by  the  fiaud  of  one  i)artner  to  which  the 
rest  were  not  privy.  Tliere  the  action 
was  trover  for  divers  bales  of  cotton, 
under  the  following  circumstances  :  The 
plaintiffs,  who  were  brokers,  being  em- 
jiloyed  by  T.  &  Co  to  purchase  cotton, 
bought  it  of  R,,  for  the  use  of  T.  &  Co. 
The  plaintiffs  paid  R.  for  the  goods,  de- 
livered East  India  Company  warrants  for 
them  to  T.  &  Co.,  and  received,  in  return, 
their  check  for  the  cost  of  the  cotton  and 
the  charges.  T.  immediately  jdedged  the 
warrants  to  the  defendant,  to  cover  his 
acceptances  for  two  bills  given  to  T.  &  Co. 
But  the  check  taken  by  the  plaintiffs  for  the 
cotton  was  dishonored ;  it  afterwards  appear- 
ing thatthe  only  object  of  T.,in  the  transac- 
tion, was  to  raise  money,  and  abscond 
which  he  accordingly  did  on  the  same  day 
that  he  received  and  pledged  the  wariants. 
Payne,  T.'s  partner,  who  drew  the  check, 
was  altogetlier  unconcerned  in  the  frauds 
of  the  latter.  The  defendant's  acceptan- 
ces were  subsequently  recovered  from  T., 
and  were  deliveied  to  the  defendant  by 
the  as.signees  of  T.  &  Co.,  which  firm  had 
been  declared  bankrupt.  Abbott,  Ld.  C. 
J.,  left  it  to  the  jury  to  say  whether  or 
not  T.  obtained  the  goods  from  the  plain- 
tiffs with  a  preconceived  design  to  raise 
money  upon  them  and  then  abscond, 
without  ever  paying  the  plaintiffs ;  if  he 
did,  they  should  find  for  the  plaintiffs  ; 
otherwise,  if  T.  conceived  the  jdan  of 
defrauding  the  plaintiffs  after  he  had  ob- 
tained jiossession  of  the  cotton.  See 
Snaith  v,  Burridge,  4  Taunt.  684.  See 
cases  cited  in  last  note.  Where  one  mem- 
ber of  a  firm  uses  trust  funds  in  speculation 
in  stocks,  contrary  to  the  copartneiship 
article,  and  without  the  knowledge  of  the 
other,  the  latter  is  not  liable.  Guilliou  v. 
Peterson,  9  Phila.  225.  If  a  partner, 
who  has  knowingly  received  stolen  goods, 
after  discovery  pays  for  them  out  of  the 


§  103.] 


WHO    ARE   LIABLE   AS   PARTNERS   AS   TO    THIRD    PARTIES.     121 


But  if  it  was  the  business  of  a  firm  to  receive  property  on 
deposit  and  for  safe-keeping,  and  one  of  the  partners  stole  and 
sold  something  so  deposited,  and  spent  the  money,  the  partnership 
would  be  liable.  This  rule,  or  rather  the  principle  on  which  it 
'  asts,  has  been  applied  to  trustees,  one  of  whom  forged  the  names 
of  his  cotrustees,  to  a  power  authorizing  his  copartners  to  sell.  (<i)^ 


funds  of  the  firm,  to  avoid  iiroai-cution, 
the  money  so  paid  cannot  be  recovered 
back  in  a  suit  in  the  name  of  the  firm, 
even  if  the  otlier  partner  is  innocent,  and 
tlie  goods  did  not  go  to  the  use  of  the 
firm.     Johnson  v.  Byerly,  3  Head,  194. 

(e)  Stone  v.  Marsh,  6  B.  &  C.  551. 
The  plaintiffs,  Fauntleroy  and  others,  lield 
stock  as  trustees ;  and  the  defendants,  of 
whom  Fauntleroy  was  also  one,  were  in 
partnership  as  bankers.  Fauntleroy  exe- 
cuted a  letter  of  attorney,  authorizing  his 
copartners  to  sell  the  .said  stock,  and  forged 
thereto  the  names  of  his  cotrustees.  The 
stock  was  accordingly  sold  and  transferred 
by  the  partners  of  Fauntleroy  to  the  credit 
of  the  purchasers  in  the  books  of  the  Bank 
of  England.  The  consideration-money 
thereof  was  ]>aid  into  the  bank  of  the 
defendants'  agents,  to  the  credit  of  the 
defendants,  according  to  the  usual  prac- 
tice on  the  sale  of  stock  for  the  defend- 
ants. Fauntleroy  was  permitted  by  his 
partners  to  conduct  the  greater  part  of  the 
business  of  the  house  without  their  inter- 
ference, and  drew  upon  the  account  at 
]\Iartin,  Stone,  &  Co.'s,  in  the  partner- 
ship name  (as  he  thought  fit),  without 
the  knowledge,  and  in  fraud  of  his  part- 
ners, more  than  the  amount  of  the  said 
sums  so  paid  in.  The  defendants  became 
bankrupt.     Fauntleroy  was  tried  for  for- 


ging a  similar  instrument,  convicted,  and 
executed.  The  plaintiffs  then  presented  a 
petition  in  bankruptcy,  to  be  allowed  to 
prove  the  amount  of  stock  sold,  against 
the  joint  estate  of  the  bankrupts.  There- 
upon the  Lord  Chancellor  directed  an  issue 
to  try  whether  the  defendants  and  Fa~iint- 
leroy  were,  at  the  date,  &c.,  indebted  to 
the  plaintiffs  and  Fauntleroy  in  any  and 
what  sum  of  money,  it  being  also  ordered 
that  no  objection  should  be  taken  on  the 
ground  that  Fauntleroy  was  interested  as 
a  trustee  jointly  with  the  plaintiffs,  and 
also  as  a  partner  with  the  defendants.  Hx 
parte  Bolland,  Mont.  &  i\L  315  ;  Stone  v. 
Marsh,  Ryan  &  M.  364.  The  Court  of 
King's  Bench  held,  that  the  money  re- 
ceived by  the  banking-house  of  the  defend- 
ants constituted  a  debt  due  from  them  to 
the  trustees.  Lord  Tenterden :  ""Upon 
this  state  of  facts,  it  cannot  be  doubted 
that  it  was  the  duty  of  the  house  to  place 
the  money  to  the  credit  of  the  trustees, 
and  retain  it  for  their  u.se,  and  subject 
to  their  order;  and  that  no  ignorance  on 
the  part  of  any  of  them,  even  sujjposing 
all  but  one  to  have  been  ignorant  of  the 
facts  (which,  however,  cannot  have  been), 
nor  any  neglect  on  the  part  of  the  hou.se, 
arising  from  a  misplaced  confidence  re- 
posed by  them  in  one  of  themselves,  or 
otherwise,  to  which  the  plaintiffs  were  no 


1  If  it  is  i)art  of  the  business  of  the  firm  to  receive  deposits,  or  if  all  the  partners 
have  knowledge  of  a  deposit,  the  firm  is  liable  where  one  partner  receives  a  deposit  on 
the  firm  account,  and  afterwards  converts  it  or  ap])lies  it  to  the  general  purposes  of  the 
firm.  Cleather  v.  Twi.sden,  28  Ch.  D.  340  (C.  A.)  ;  Moore  v.  Knight,  [1891]  1  Ch.  547  ; 
Til  re  Ketchum,  1  F.  R.  815.  So  where  a  firm  of  solicitors  took  money  to  inve.st,  and 
on-  partner  without  the  knowledge  of  the  others  invested  it  in  an  inadequate  mortgacre, 
all  tiie  ])artners  were  liable  for  the  misapplication.  Blyth  v.  Fladgate  [1891],  1  Ch, 
337.  Where  one  of  a  firm  of  attorneys  collected  money  for  a  client  and  misused  it  the 
other  partners  were  held  liable.  Porter  v.  Vance,  14  Lea,  629.  And  where  goods  werd 
intrusted  to  one  partner  to  sell  on  commission,  such  being  the  business  of  the  partner- 
ship, and  the  partner  misapplied  the  pioceeds,  all  the  partners  were  liable.  Todd 
V.  Jackson,  75  Ind.  272.  Where  one  of  a  firm  of  attorneys  who  had  negotiated  a  mort- 
gage took  money  to  use  in  insuring  the  property,  but  failed  to  do  so,  the  firm  was  liable 
by  reason  of  the  failure.     CcUier  v.  McCall,  84  Ala.  190,  4  So.  367. 


122 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VI. 


§  104.    Breach   of   Trust  of   Partner. — If    one  of    a   firm,  being 
also  a  trustee,  applies  tlu;  trust  funds  to  the  use  of  the  partner- 


parties,  can  deprive  the  plaiiitills  of  their 
right  to  their  money."  The  piaintilfs  were 
accordingly  admitted  to  j)rove.  For  the 
defendants,  it  was  argued  at  the  trial  at 
)iisi  prias  (Ivvan  &  M.  368) .  First,  that  no 
debt  could  be  founded  on  and  arise  out  of 
a  felony  ;  and  that  it  was  against  the  jjolicy 
of  the  criminal  law  that  the  party  whose 
name  had  been  forged  should  be  allowed 
to  adopt  the  felony,  or  in  any  way  to  sanc- 
tion it,  or  turn  it  to  his  advantage.  Sec- 
ond, that,  inasmuch  as  the  transfer  under 
a  forged  power  worked  no  alteration  of 
property,  the  plaintiti's  had  not  lost  their 
property,  but  still  remained  owners  of  the 
stock,  and  might  call  upon  the  Bank  of 
England  to  account  for  both  the  principal 
and  dividends.  Third,  that  even  if  the 
defendants  were  fixed  by  the  payment  of 
the  money  to  their  agents,  Martin  &  Co., 
still  they  were  discharged  by  the  repayment 
of  it  to  Fauntleroy,  one  of  the  parties  whose 
property  it  was,  and  into  whose  hands  and 
use  it  appeared  by  the  evidence  to  have 
come.  In  answer  to  the  first  objection,  it 
was  held,  in  the  Court  of  King's  Bench 
(6  B.  &  C.  564),  and  by  Lord  Lyndhurst 
(Mont.  &  Mac.  397),  that  it  was  undoubt- 
edly a  [trinciple  of  law  that  a  man  should 
not  be  allowed  to  make  a  felony  the  foun- 
dation of  a  civil  action.  But  that  this 
rule  of  law  was  one  founded  on  public  pol- 
icy, which  requires  that  offenders  against 
the  law  shall  be  brought  to  justice,  and 
ceases  to  operate  when  the  reason  for  it 
fails  ;  and  that  no  such  ]iolicy  or  rule  was 
applicable  to  the  present  case,  the  offender 
having  already  suffered  the  extreine  pen- 
alty of  the  law  for  a  similar  offence. 
Further,  that  the  assertion  that  the  plain- 
tiffs were  seeking  to  ratify  a  felonious  act, 
and  were  making  that  act  the  ground  of 
their  demand,  was  incorrect.  That  the 
ground  of  their  demand  was  the  actual 
receipt  of  the  money  [)roduced  by  the  sale 
and  transfer  of  their  annuities.  That  the 
sale  was  not  a  felonious  act,  nor  the  trans- 
fer, nor  the  receipt  of  the  money.  That 
the  felonious  act  was  antecedent  to  all 
these,  and  complete  without  them  (.see  a 
similar  opinion  of  the  court  in  Boardman 
V.  Gore,  15  Mass.  331),     In  reply  to  the 


second  objection,  it  was  held,  in  the  .same 
courts,  that  whether  or  not  the  plaintifi's 
had  a  remedy  against  the  Bank  of  Eng- 
land, it  was  unnecessary  to  decide,  since 
their  remedy  against  the  defendants  was 
clear,  and,  generally  speaking,  when  an  in- 
jured party  has  different  remedies  against 
different  persons,  he  may  elect  wliich  he 
will  pursue.  Upon  the  third  objection, 
Lord  Tenterden  .said,  in  Kyan  &  M.  369: 
"  But  they  say,  also,  that  Fauntleroy  was 
one  of  the  persons  entitled,  and  that  he 
has  drawn  the  money  out,  and,  therefore, 
they  are  not  answerable.  Now,  if  two 
persons  give  a  power  of  attorney  to  bank- 
ers  to  sell  out  their  joint  stock,  tlie  bankers 
ought  to  place  the  proceeds  to  their  joint 
account,  and  both  ought  to  draw.  If  it  is 
meant  that  the  money  should  be  paid  to 
one,  an  authority  to  that  effect  ought  to 
be  given  to  the  bankers ;  that,  in  my  ex- 
perience, has  been  the  ordinaiy  juactice. 
If  you  are  of  o{)inion  that  this  is  the  usual 
mode  of  dealing,  then,  as  against  the  other 
two,  it  is  no  defence  that  the  payment  has 
been  made  to  one  only  of  several  who  are 
jointly  entitled  to  receive  it."  See,  to  the 
.same  point,  Ex  parte  Bolland,  1  jMont.& 
A.  570  ;  Keating  v.  Marsh,  1  Mont.  &  A  . 
582  ;  Marsh  v.  Keating,  1  Mont.  &  A.  592  ; 
s.  c.  2  CI.  &  Fin.  250.  In  Hume  ?■.  Bol- 
land, 1  C.  &  M.  130,  s.  c.  2  Tyr.  575,  a 
case  arising  out  of  the  same  bankruptcy, 
Marsh  &  Co.,  the  banking  firm  of  which 
Fauntleroy  was  a  member,  had  been  em- 
ployed by  the  trustees  of  stock,  standing 
in  their  names  on  the  books  of  the  Bank 
of  England,  to  receive  the  dividends 
thereon.  In  the  books  of  Marsh  &  Co., 
accordingly,  the  amount  of  the  dividends 
was  regularly  carried  to  the  credit  of  their 
employers,  and  was  by  them  drawn  for  and 
received.  But  it  afterwards  appeared  that 
none  of  the  above  dividends  had  in  jioint 
of  fact  been  received  by  Mai.sh  &  Co.  ; 
Fauntleroy  having  transferred  and  sold 
the  stock  by  means  of  forged  powers  of 
attorney,  and  having  caused  the  above 
entries  to  be  made  in  the  books  of  the 
firm  in  fraud  of  his  copartners,  the  money 
never  having  been  received  by  them. 
Upon  the  issuing  of  commissions  against 


§  104.]    WHO    ARK    LIABLE    AS    PARTNERS    AS   TO    THIRD    PARTIES.    123 


sliip,  with  the  knowledge  of  the  other  partners,  the  firm  will  be 
chargeable  with  the  amount,  and  held  as  debtors  to  the  trust 
therefor,  (y)  It  is  said  in  some  cases  that  the  firm  will  not  be 
liable  in  such  case,  unless  the  other  partners  have  knowledge  of 
the  trust  and  of  this  application  of  the  trust  funds,  {z)  But  it  has 
also  been  held,  that  if  a  member  of  a  firm,  holding  funds  as  an 
agent  of  a  third  party,  puts  that  money  into  the  business  of  the 
firm,  the  firm  is  liable  whether  the  other  partners  knew  that  the 
money  was  so  held  or  not.  {zz)  How  far  the  knowledge  and  con- 
sent of  the  other  partners  is  necessary  to  make  them  liable  is  not 
distinctly  settled  on  the  authorities. 

[The  true  principle  seems  to  be  recognized  in  the  case  of 
Guillou  V.  Peterson.^  There  a  partner  lent  to  his  firm  securities 
which  he  held  in  trust,  and  the  firm  used  them.     It  was  held  that 

Marsh  &  Co.,  a  case  being  sent  to  the 
Exchequer  to  try  the  ([uestion  whether 
the  bankru])ts  were  indebted  to  the  trus- 
tees, and  if  so  in  how  much,  it  was  held, 
that,  at  the  date  of  the  commissions,  the 
bankrupts  were  not  indebted  to  the  trus- 
tees for  the  balance  of  the  dividends  ap- 
pearing by  the  books  to  have  been  received. 
But  see  Hume  v.  Bolland,  Ryan  &  ^L  371; 
also  Keating  v.  Marsh,  supra,  subseijuently 
decided  in  the  House  of  Lords,  in  Sadler 
V.  Lee,  6  Beav.  324. 

(y)  Ex  parte  Watson,  2  Ves.  &  B.  414; 
Smith  V.  .Jameson,  6  T.  R.  601  ;  Board- 
man  V.  Mosman,  1  Bro.  C.  C.  68  ;  Jarjues 
V.  Marquand,  6  Cow.  497  ;  Hutchinson  v. 
Smith,  7  Paige,  26  ;  Richardson  v.  French, 
4  Met.  577.  [In  re  Jordan,  2  F.  R.  319  ; 
Rau  V.  Small,  144    Pa.  304,  22  Atl.  740.] 

(?)  E.v  parte  Heaton,  Buck,  386  ;  Ex 
2mrte  Apsey,  3  Bro.  C.  C.  265  ;  Guillou  v. 
Peterson,  9  Phila.  225  ;  Douncei'.  Parsons, 
45  N.  Y.  180.  But  see  Richardson  v. 
French,  4  Met.  577  ;  Whitaker  v.  Brown, 
16  Wend.  509  ;  Freeman  v.  Fairlie,  3 
]\Ieri.  44.  In  tliis  last  case,  it  seems  to  be 
held,  that,  if  the  other  partners  merely 
jiermit  one  partner  to  mix  his  accounts  as 
executor  with  those  of  the  firm,  the  part- 
ners may,  without  proof  of  further  knowl- 
eilge  on  their  part,  be  compelled  to  produce 
those  accounts  to  the  cestui  que  trust. 
And,  in  the  following  case,  the  fact,  that, 
during  the  continuation  in  a  firm  of  trust 
funds  by  a  breach  of  trust  on  the  part  of 
some  of  the  partners,  other  partners  en- 


tered and  retired  from  the  fiim,  seems  to 
have  ex(!mpted  the  latter  from  liability  for 
the  bleach  of  trust  of  their  copartners  to 
which  they  were  privy.  A.,  a  partner  in 
a  house  of  agency  in  India,  died,  having  by 
his  will  directed  his  estate  to  be  called  in, 
and  invested  on  certain  trusts,  and  ap- 
pointed two  of  his  copartners  his  executors. 
Tiiey,  however,  suffered  his  share  in  the 
partnership  to  lemain  in  the  liouse.  After 
A.'s  death,  B.  and  C.  were  admitted  as 
partners,  and  they  knew  that  A.'s  share 
was  remaining  in  the  house,  and  that  it 
was  subject  to  the  trusts  of  his  will.  They 
afterwards  retired,  and  other  partners 
were  admitted.  The  house  ultimately 
failed.  It  was  held,  that  B.  and  C.  were 
not  responsible  for  the  breach  of  trust  com- 
mitted by  their  copartners,  the  executors. 
Twyford  r.  Trail,  7  Sim.  92.  Where  trust 
money  is  put  into  trade  without  authority, 
the  cestui  que  trust  may  generally  elect  to 
take  from  the  trustees  either  a  share  of  the 
profits,  for  the  period  of  the  breach,  or 
interest  for  that  time.  There  may,  how- 
ever, be  circumstances  in  which  the  cestiii 
que  trust  will  have  a  right  to  divide  the 
period,  and  to  claim  interest  for  one  part 
and  a  share  of  the  profits  for  another. 
Heathcote  v.  Hulme,  1  Jac.  &  W.  722  ; 
Docker  v.  Somes,  2  Mylne  &  K.  656.  See 
Clayton's  Case,  1  ]\Ieri.  572  :  Hankej'  v. 
Garrett,  1  Ves.  236. 

(")  Floyd  V.  Wallace,  31  Ga.  688  ; 
[Cunningham  v.  Woodbridge,  76  Ga.  302.] 
And  see  Harper  v.  Lamping,  33  Cal.  641. 


1  89  Pa.  163. 


124 


THE   LAW   OF    PARTNERSHIP. 


[CH.    VI. 


all  the  partners  were  liable  for  the  value  of  the  securities,  even  if 
they  had  no  knowledge  of  the  trust.  It  was  admitted  that  where 
a  partner  lent  money  to  the  firm,  the  iimocent  partners  were  not 
liable  to  the  true  owner,  if  the  partner  had  misappropriated  it ; 
but  in  this  case  the  securities  had  been  used  by  the  firm  after  it 
had  received  them,  and  this  use  gave  cestui  que  trust  a  claim 
against  the  firm.] 

§  105.  Instances  of  Tort  of  Partner.  —  A  partnership  to  whom 
goods  were  consigned  for  sale  was  held  liable  for  the  pledge 
thereof  by  a  fraudulent  partner ;  (a)  so  was  a  firm  of  common 
carriers,  one  of  whom  lost  property  intrusted  to  them;  (h)  and 
partners  in  a  publishing  house,  one  of  whom  published  a  libel ;  (e) 
and  partners  in  the  stage-coach  business,  one  of  whom  caused  an 
injury  by  negligent  driving,  (c?) 

So  all  the  partners  are  liable  for  the  tort  of  an  agent,  although 
that  agent  were  appointed  by  one  partner  only,  jjrovided  he  had 
autiiority  to  make  the  appointment,  (e)  So  it  would  be  in  case  of 
a  breach  of  the  revenue  laws.  (/)  And  a  demand  upon  and  a 
refusal  by  one  partner  is  a  conversion  by  the  firm,  which  will 
sustain  trover,  (g)  ^ 

(n)  NinoU  u.  Glcnnie,  1  M.  &  S.  588.  Cotton    v.    Bettner,    1    Rosw.   430.      And 

(/))   Mitchell  V.  Tarbutt,  5  T.  K.  649.  the  action  may  be  brought  against  one  or 

(c)  Rex  V.  Almon,  5  Burr.  2686  ;  Rex  more  or  all  the  partners.  Roberts  v. 
V.  Pearoe,  Peake,  75  ;  Rex  v.  Toi)ham,   4  Johnson,  58  N.   Y.   613. 

T.  R.  126  ;  Rex  v.  Marsh,  2  B.  &  C.  723  ;  (/)  Attorney-General   v.    Strongforth, 

[Atlantic  Glass  Co.  v.  Paulk,  83  Ala.  404,  3  Bunb.   97  ;    Attorney-General  v.    Burges, 

So.  800.]  Bunb.  223  ;  Attorney-General  v.  Siddon, 

(d)  Moreton  v.  Hardern,  4  B.  &  C.  223.  1  Cr.  &  J.  220;  United  States  v.  Thomasou, 
(c)  As  where  several  persons  are   pro-  4  Biss.  99. 

priritors  of,  and  partners  in,  a  line  of  stage  (g)  Nishet  i'.  Patton,  4  Rawle,  120; 
coaches,  but  each  stocks,  and  employs  Hoi  brook  v.  Wight,  24  Wend.  169  ; 
drivers  for  his  own  particular  portion  of  Mitchell  v.  Williams,  4  Hill,  13.  The 
the  roatl ;  all  the  partners  are  liable  for  managing  jiartner,  who  conducted  the 
injuries  caused  by  the  misconduct  and  business  of  a  mine,  refused  to  deliver  up 
negligence  of  a  person  employed  on  any  ore  belonging  to  the  former  tenants  of  the 
portion  of  the  line,  thongli  such  wrong-  mine,  on  the  ground  that  it  was  partner- 
doer  is  hired  and  paid  by  only  one  partner,  ship  property,  and  there  was  subsequently 
Weylan  v.    Elkins,    Holt,    N.    P.    227;  1  a  notice,   by  the  attorney  for   the  defen- 


Stark.  272 ;  Bostwick  v.  Champion,  11 
Wend,  571,  18  Wend.  175;  Bayley,  J., 
in  Lnugher  v.  Pointer,  5  B.  &  C.  570. 
See  also  Dwight  r.  Brewster,  1   Pick.  50  ; 


dants,  offering  to  deliver  up  tools  that  were 
in  the  same  building  with  the  ore  ;  but 
the  notice  was  silent  as  to  the  ore.  Held, 
evidence  of  conversion  by  all  the  partneis. 


Cobb  V.  Abbott,  14  Pick.   289  ;  Stockton     Lloyd  v.  Bellis,  37   Eng.  L.   &  Eq.    545. 

See  Com.  Dig.  tit.  Trespass,  eh.  1  ;  NicoU 
V.  Glennie,  1  M.  &  S.  588  ;  Dore  v.  Wil- 


Frey,  4  Gill,  406  ;  Hadfield  v.  Jameson, 
2  Munf.    53  ;  Locke   v.   Stearns,    1    Met. 
560  ;    Roberts    v.    Totten,   8    Ark.    609  ;    kinson,  2  Stark.  287. 
National  Exch.  Co.  i*.  Drew,  2  Macq.  103  ; 

1  Where  one  partner  makes  false  representations  or  commits  fraud  in  the  course  of 
the  firm  business,  all  the  partners  are  liable  in  tort.     Strang  v.  Bradner,  114  U.  S, 


§  105.]     WHO    ARE    LIABLE    AS    PARTNERS    AS    TO    THIRD    PARTIES.    125 

But  even  if  the  tort  were  cominitted  by  a  partner  in  the  per- 
formance of  the  partnership  business,  it  might,  from  its  nature  or 
attendant  circumstances,  be  shown  to  be  only  a  several  act.  As 
if  two  physicians  were  in  partnership,  and  one  intentionally  mal- 
treated a  patient.^  So  if  two  were  partners  as  bankers  and  bill- 
brokers,  and  one  of  them  discounted  a  note  usuriously,  this  would 
be  his  own  act  only,  or  the  act  of  the  partnership,  according  to 
his  authority,  or  the  usage  of  the  firm,  or  other  circumstances.  (A) 

It  is  to  be  observed  that,  although  all  the  partners  may  be  liable 
for  a  tort,  and  all  may  be  sued  jointly,  they  may  also  be  sued 
severally  ,  for,  in  law,  all  torts,  however  joint,  and  whether  con- 
structive or  actual,  are  several.  It  is,  therefore,  no  answer  for  a 
defendant  sued  in  tort  to  say  that  others  were  guilty  with  him.  {i) 

(h)  When    one    partner,    without    the  put  on  their  papers  in  causes  in  their  office, 

knowledge  of  the  other,  borrows  money  at  either  of  them  is  liable  to  the  penalties  of 

usurious  interest,  and  executes  a  note  in  the  act  37  Geo.  3  for  practising  as  an  attor- 

the  name  of  the  firm  ;  and  afterwards  pays  ney  without  entering  his  certificate,  though 

the.usurious  interest,  and  the  other  part-  it  does  not  appear  that  one  of  them  had 

ner,  ignorant  of  the  payment  of  the  usury,  any  profit  or  advantage  from  the  suit  for 

executes  his  own  note  in  lien  of  the  other,  suing  in  which  the  action  in  qid  tarn  is 

he  cannot,  when  sued  upon  it,  set  up  as  a  brought.     1  Wms.  Saund.  291,  d  ;  Rich  v 

defence  the  payment  of  usury  by  his  part-  Pilkinton,  Carth.  171  ;  Sutton  v.  Clark,  6 

ner.     Jones  y.  Jackson,  14  Ala.  186.     See  Taunt.  29;  Edmondson  v.  Davis,  4  Esp. 

Hutchins  v.  Turner,  8  Humph.  415.  14  ;    Attorney-General   v.   Burges,   Bunb. 

(0   If  an    attorney    is   in    partnership  223  ;  Mitchell  v.   Tarbutt,  5  T.  R.   649  ; 

with  another,  and  they  carry  on  their  busi-  Stockton  v.  Frey,  4  Gill,  406.     As  all  the 

ness  together,  and  their  joint  names  are  partners  may  be  affected  by  the  tort  of 

555  ;  Stanhope  v.  Swafford,  80  la.  45,  45  N.  W.  403  ;  Bradner  v.  Strang,  89  N.  Y. 
299  ;  Peckham  Iron  Co.  v.  Harper,  41  Oh.  St.  100.  And  operates  by  way  of  estoppel  on 
all  the  partners.  In  re  Many,  17  X.  B.  R.  514;  French  v.  Rowe,  15  la.  563  ;  Cole- 
man V.  Pearce,  26  Minn.  123  ;  Henslee  v.  Cannefax,  49  Mo.  295  ;  Griswold  v.  Haven, 
25  N.  Y.  595.  So  all  the  partners  are  liable  in  tort  where  one  partner  makes  illegal 
charges.  Lockwood  v.  Bartlett,  130  N.  Y.  340,  29  N.  E.  257.  Or  in  the  course  of 
business  commits  a  trespass  on  chattels  of  another.  McClure  «.  Hill,  36  Ark.  268  ; 
Robinson  v.  Goings,  63  Miss.  500.  Or  converts  the  property  of  another.  In  ?'eKetch- 
um,  1  F.  R.  815.  Or  negligently  injures  property.  Bucki  v.  Cone,  25  Fla.  1,  6  So.  160. 
Or  injures  another  negligently.  Haley  v.  Case,  142  Mass.  316,  7  N.  E.  8/7  ;  Hyrne 
V.  Erwin,  23  S.  C.  226.  Or  libels  a  customer.  Woodling  v.  Knickerbocker,  31  Minn. 
268,  17  N.  W.  387.  Or  a  rival  firm.  Hauey  MTg  Co.  v.  Perkins,  78  Mich.  1,  43  N. 
AV.  1073.  Or  procures  a  wrongful  attachment  of  property  on  a  firm  claim.  Kuhn  v. 
"Weil,  73  Mo.  213.  Or  institutes  a  malicious  prosecution.  Mcllroy  v.  Adams,  32  Ark. 
315.  It  is  however  held  in  Rosenkrans  i-.  Barker,  115  111.  331,  3  X.  E.  93,  that  such  a 
wilful  lort  as  the  malicious  prosecution  of  a  firm  debtor  is  an  individual  act  of  the  part- 
ner who  institutes  it,  and  the  other  members  of  the  firm  are  not  lial>le  for  it.  In 
order  to  charge  the  firm  the  tort  must  be  shown  affirmatively  to  have  been  committed 
in  the  course  of  the  business.  So  in  an  action  of  trover  for  buying  goods  from  a  thief, 
the  true  owner  in  order  to  charge  a  firm  must  prove  that  they  were  bought  for  the  firm, 
not  for  the  individual  partner.    Paden  v.  Belleiiger,  87  Ala.  575,  6  So,  351. 

^  But  the  negligent  act  of  one  of  a  firm  of  physicians,  in  the  course  of  the  business,  has 
been  held  to  render  the  other  members  of  the  firm  liable.    Hyrne  v.  Erwin,  23  S.  C.  226. 


126 


THE   LAW   OF   PARTNERSHIP. 


[CH. 


VI. 


[Where  an  innocent  partner  is  compelled  after  dissolution,  to 
satisfy  a  judgment  obtained  for  the  tort  of  his  co-partner,  he  may 
maintain  an  action  for  compensation  against  the  actual  wrong- 
doer,^ since  the  parties  are  not  really  joint  wrong-doers  between 
whom  no  contribution  can  be  claimed.] 


one,  so  a  release  to  one  of  all  liability  in 
respect  of  the  tort  will  operate  as  a  release 
ami  discharge  of  all.  Co.  Litt.  232,  a  ; 
Bac.  Abridg.  Release  (G)  ;  Com.  Dig. 
Release,  B.  4;  id.  Pleader,  3  M.  12; 
Kiffiu  I'.  "Willis,  4  Mod.  379  ;  Williamson 
V.  AlcGiuiiis,  11  B.  Moil.  74.  Case  is  the 
j)roiier  action  against  partners  for  injuries 
caused  by  the  negligence  of  their  servant  ; 
and,  if  the  damage  be  effected  by  laches 
simply,  it  will  lie  against  them,  even 
though  one  partner  were  present,  per- 
sonally, and  acted  in  that  which  occa- 
sioned the  daniiige.  So,  where  one  partner 
is  a  wilful  wrong-doer,  if  under  the  circum- 


stances any  action  is  sustainable  against 
his  copartners,  case  is  still  the  proper  rem- 
edy. But,  as  against  the  malicious  part- 
ners solely,  trespass  is  the  proper  form  of 
action.  Mitchell  v.  Tarhutt,  5  T.  R.  649  ; 
Morley  v.  Gaisford,  2  H.  Bl.  442  ;  Huggett 
V.  Montgomery,  5  B.  «&  P.  446  ;  I.eame  v. 
Bray,  3  East,  593  ;  Ogle  v.  Barnes,  8  T. 
R.  188  ;  Rogers  v.  Inibleton,  5  B.  &  P. 
117  ;  Moreton  v.  Hardern,  4  B.  &  C.  223  ; 
Whiteman  v.  Smith,  12  Rich.  L.  595. 
[Since  the  partners  are  severally  liable, 
the  innocent  partner  may  be  sued  without 
joining  the  other.  Mode  t;.  Peuland,  93 
N.   C.  292.] 


1  Smith  V.  Ayrault,  71  Mich.  475,  39  N.  W.  724. 


§  106.]  RIGHTS    AND    DUTIES    Oi    lARrXERS.  127 


CHAPTER   VII. 

OF   THE   RIGHTS   AND    DUTIES   OF   PARTNERS    BETWEEN   THEMSELVES. 

SECTION    I. 
RIGHTS   AND    POWERS    OF    A    PARTNER. 

§  10(3.  Right  of  Choice  as  to  a  Partner.  — No  One  among  the 
rights  of  [)artuer.s  is  more  certain,  or  leads  to  more  important 
consequences,  tiian  that  to  which  we  have  already  referred  as 
implied  by  the  phrase  dilectus  personaruni.  Every  partnership 
must  be,  in  its  beginning,  voluntary,  and  the  result  of  the  choice 
and  wish  of  those  who  become  partners.^  Precisely  so,  as  to 
admission  of  new  partliers,  it  must  continue  to  be.  (a)  Hence, 
whatever  rights  a  partner  may  have  of  assigning  or  otlierwise 
disposing  of  his  share  of  the  stock  or  profits  (  a  subject  to  be 
presently  considered),  his  character  or  relation  of  partner  cannot 
be  assigned.  (6)     And  if  he  does  assign  it,  and  the  other  partners 

{a)  The  civilians  pushed  the  priueiple  (h)  R;i}-inou(rs    Case,     2    Rose,     255  ; 

of  dilectus  pcrsunarum  to  a  great,  and,  as  Kingman  v.  Spurr,  7  Pick.  235  ;  Gilmore 

Pothier  thinks,  to  an  unreasonable  extent ;  v.    Black,    11    Me.    488;      Moddewell    v. 

for  with  them,  even  a  sti[>ulation  between  Keever,  8  W.  &  S.  63  ;  Cowles  v.  Garrett, 

partners,   that   heirs  or  executors   should  30  Ala.  341  ;  Ketcham  v.  ( 'lark,  6  Johns, 

succeed   to   the   relation  of  partner,    was  144 ;   Murray  v.    Bogert,   14  Johns.    318. 

deemed  to  be  void.     Domat,  lib.  i.  tit.  8,  In  Marquand  v.  Xew  Yoik  Manuf.  Co.,  17 

§  2  ;  Pothier,  Traite  du  contrat  de  societe,  Johns.  525,  Fitch  assigiieil  his  interest  in 

ch.  8,  §  3  ;  Crawshay  v,  Maule,  1  Swanst.  a  paitnership,  by  the  articles  of  which  it 

509,  note.     The  doctrine  of  the   English  was  provided  that  it  should  continue  until 

and  American  Law  is  otherwise,  and  stipu-  two  of  the  partners  should  demand  a  dis- 

lations  for  the  admission  of  such  persons  solution.     The  other  partners  desired  the 

into  a  firm  upon  the  decease  of  a  partner  partnership  to  go  on  notwithstanding  the 

are   frequent,    and   are   always,   as   far  as  assignment.       But,    per  Woodworth,    J.  : 

possilile,    enforced    by   the    courts.       See  "  It  is  well  settled  in  England,  that  an  act 

Wrexham  v.  Hudleston,   1  Swanst.  514;  of  bankru[itcy  is  a  dissolution  of  ])artner- 

Balmain    v.    Shore,     9    Ves.    500  ;     War-  ship  ;  this  is  by  reason  of  the  assignment, 

ner  v.  Cunningham,    3  Dow.    76  ;    Gratz  which  severs  the  interest  of  the  bankrupt, 

V.  Bayard,    11    S.    &  R.    41;    Scholefield  by  o])eration  of  law.     An  assignment  made 

V.    Eichelberger,   7  Pet.    586  ;    Downs   v.  by  the  party  himself,  under  circumstances 

Collins,    6    Hare,   418;    Page  v.    Cox,   10  like  the  present,  produces  the  same  result  : 

Hare,  163.    See  Reynolds  v.  Hicks,  19  Ind.  in  both  cases,  they  give  rise  to  a  state  of 

113  ;  Buckingham  v.  Hanna,  20  Ind.  110.  things   altogether  incompatible  with   the 

^  Where  a  partner  grants  a  part  or  the  whole  of  his  profits  to  a  third  person,  the 
latter  does  not  tliereby  become  a  partner.     He  cannot  be  made  a  partner  without  the 


128 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


receive  the  assignee  among  them  and  into  the  partnershi}),  the  new 
partner  becomes  one,  altogether  by  their  reception  and  his  agree- 
ment with  them,  and  in  no  degree  by  the  assignment  or  transfer 
by  him  who  has  ceased  to  be  a  partner,  (c)     In  an  English  case,  a 


prosecution  of  a  {)ai'tnership  concern,  com- 
jiienced  and  [ireviously  conducted  by  the 
bankrupt  and  his  former  copartners.  It  is 
l)eifectly  clear  that  a  new  partner  cannot 
be  admitted  without  consent.  This,  ex  vi 
termini,  implies  that  even  consent  would 
be  nugatory,  unless  the  assignee  elected  to 
become  a  partner ;  when  he  does  not  so 
elect,  but  (as  in  the  present  case)  insists 
on  a  div'ision  of  the  property,  the  demand, 
according  to  acknowledged  general  prin- 
ciples, cannot  be  denied."  Mathewson  v. 
Clark,  (J  How.  122  ;  Putnam  v.  Wise,  1 
Hill,  238  ;  Channel  v.  Fassitt,  16  Ohio, 
166  ;  Mason  v.  Connell,  1  Whart.  381  ; 
Morton's  Appeal,  13  Pa.  67 ;  Bray  v. 
Fromont,  6  ]\ladd.  5.  In  Goddard  i'. 
Hodges,  1  C.  &  M.  33,  the  plaintiff  was 
the  solicitor  of  a  bridge  company,  and  on 
that  account,  not  desiring  to  appear  as  the 
owner  of  shares  in  a  company,  had  ino- 
cured  one  Fall  to  be  the  nominal  stock- 
holder of  a  certain  number  of  shares,  the 
])laintiff,  however,  being  the  real  owner, 
making  the  deposits,  and  paying  all  other 
expense  on  the  shares.  In  an  action  to 
recover  compensation  for  professional  ser- 


vices, the  i)laiutiff  cited  Bray  v.  Fromont, 
supra;  and  contended  that,  as  between 
himself  and  the  bridge  company,  he  was 
not  a  partner,  since  there  was  no  consent 
nor  agreement  of  the  company  to  receive 
him  as  such.  But  the  court  held  other- 
wise, and  a  non-suit  was  entered.  See 
Bradley  v.  Harkness,  26  Cal.   76. 

(c)  The  effect  of  an  assignment  by  a 
partner  of  his  interest  in  a  cojiartnership 
is  to  give  the  assignee  a  right  to  insist 
upon  an  account  of  the  joint  concern,  and 
to  claim  whatever  his  assignor  would  be 
entitled  to  upon  a  settlement  of  accounts, 
upon  satisfaction  of  the  claims  of  the 
otlier  partners.  NicoU  v.  Mumford,  4 
Jolins.  Ch.  522  ;  Rodriguez  v.  Heffernan, 
5  Johns.  Ch.  417 ;  Marquand  v.  New 
York  Manuf.  Co.,  17  Johns.  525  ;  King- 
man 17.  Spurr,  7  Pick.  235  ;  Bray  v.  Fro- 
mont, 6  Madd.  5  ;  Mathewson  v.  Clark,  6 
How.  122  ;  Moddewell  v.  Keever,  8  AV.  & 
S.  63.  In  this  last  case  it  was  held,  that 
an  acquittance  of  a  partnership  debt, 
given  by  the  assignee  of  one  partner's 
share,  could  not  have  the  effect  of  reliev- 
ing the  debtor  from  liabilit}'  to  the  firm 


consent  of  the  other  partners.  Ex  parte  Barrow,  2  Rose,  252  ;  Brown  v.  De  Tastet,  Jac. 
284  ;  Frost  v.  Moulton,  21  Beav.  596  ;  London  Assurance  Corp.  v.  Drennen,  116  U.  S. 
46]  ;  Bybee  v.  Hawkett,  12  F.  R.  649  ;  Meyer  v.  Krohn,  114  111.  574,  2  N.  E.  495  ; 
Revnolds  v.  Hicks,  19  Ind.  113  ;  Burnett  v.  Snyder,  76  N.  Y.  344,  81  N.  Y.  550  ; 
Rockafellow  r.  Miller,  107  N.  Y.  507,  14  N.  E.  433  ;  Setzer  v.  Beale,  19  W.  Va.  274  ; 
Riedeburg  v.  St^hmitt,  71  Wis.  644,  38  N.  W.  336.  But  it  is  otherwise  held  in  Mas- 
sachusetts, Baring  v.  Crafts,  9  Met.  380  ;  Fitch  v.  Harrington,  13  Gray,  468. 

For  the  same  reason  the  purchaser  of  the  interest  of  a  deceased  partner  does  not 
become  a  partner.  Noonan  r.  Nuuan,  76  Cal.  44,  18  Pac.  98.  And  where  the  interest 
of  a  partner  is  sold  on  execution,  the  purchaser  cannot  insist  upon  being  accepted  as  a 
partner.     Carter  v.  Roland,  53  Tex.  540. 

The  name  "sub-partner  "  is  sometimes  apjdied  to  the  assignee  of  an  interest  in  a 
partner's  profits.  Nirdlinger  v.  Bernheimer,  133  N.  Y.  45,  30  N.  E.  561.  The 
term  is  however  misleading,  for  he  is  a  partner  neither  with  the  firm  nor  with  his 
assignor. 

Since  one  partner  cannot  admit  a  new  member  to  a  firm,  his  representations  in  the 
course  of  an  attempt  so  to  do  cannot  bind  the  firm.  Thus  where  a  partner  agreed  with 
a  stranger  that  if  the  latter  should  buy  out  another  partner  he  would  get  a  third  interest 
in  the  business  free  from  all  liens,  this  did  not  bind  the  firm.  Love  v.  Payne,  73 
Ind.  80. 


§  107.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  129 

person  entering  into  business  was  guaranteed  to  the  firm  np  to  a 
certain  amount  by  liis  father,  and  in  consideration  thereof  con- 
tracted to  pay  to  his  father  a  certain  sum  out  of  the  profits. 
Afterwards  marrying,  he  made  a  marriage  settlement,  by  which 
he  transferred  all  the  jH'ofits  and  earnings  of  the  business  to  his 
father  and  another,  in  trust,  first  to  secure  the  father's  annuity, 
and  then  on  other  trusts.  It  was  held  by  the  Court  of  Common 
Pleas  that  the  father  became  a  partner  in  the  business  and  liable 
for  the  debts.  But  the  judgment  was  reversed  in  the  Exchequer 
Chamber,  (cc) 

So  if  a  partner  bequeaths  his  interest  in  a  firm  to  some  one, 
this  will  not  make  the  legatee  a  partner  ;  ((7)  nor  will  the  bequest 
have  this  effect  although  the  legacy  is  expressly  for  the  purpose 
of  making  him  a  partner,  and  is  said  to  be  a  legacy  of  all  the 
rights,  etc.,  of  a  partner;  for  this  character  of  partner  is  not  trans- 
ferable. But  one  who  represents  the  interest  of  a  former  partner, 
if  received  by  the  other  partners  and  treated  as  a  partner,  becomes 
a  partner  under  the  origmal  articles,  {dd}  Nor  is  the  dileetus 
personarum  a  right  of  the  old  partners  only.  It  belongs  just  as 
much  to  the  new  partner.  No  act  of  any  others  can,  of  itself, 
make  him  a  partner.  He  must  himself  give  his  consent,  and 
enter  into  the  firm  by  his  own  act.  If  a  transfer  of  a  partner's 
interests  and  rights  were  made  with  an  intent  on  the  part  of  the 
transferrer  that  the  transferee  should  thereby  be  made  a  partner, 
he  would  not  become  one  as  to  the  others,  without  their  and  his 
acquiescence.  (^) 

§  107.  Provisions  in  Articles  for  Transfer  of  Share.  —  It  is  per- 
haps possil)le  that  the  consent  of  the  former  partners  may  be 
given  beforehand,  and  the  consent  of  the  transferee  implied,  by 

for  the  same  debt.     Ex  parte   Barrow,  2  (d)  Nor  are  the  executors  of  a  deceased 

Rose,  2.52  ;  Brown  v.  De  Tastet,  Jac.  284  ;     partner,  nor  the  assignees  of  a  bankrupt 

2  Bell  Coinm.  636.     See  Newland  v.  Tale,     one,  partners  with    the  other  member  of 

3  Ired.  Eq.  226  ;  Cowles  v.  Garrett,  30  the  original  firm.  They  are  simply  en- 
Ala.  341.  The  transferee  of  a  portion  of  titled  to  an  account.  Pearce  v.  Chaniber- 
a  copartner's  interest  has  a  debt  which  he  lin,  2  Ves.  33  ;  Wilson  v.  Greenwood,  1 
may  prove  against  the  transferrer's  estate.  Swanst.  482  ;  Fox  v.  Hanbury,  Cowp. 
Ex  parte  Dodgson,  Mont.  &  M'A.  445.  445;  Hague  v.  Rolleston,  4  Burr.  2177; 
But  the  assignee  of  a  partner's  interest  Ex  parte  Williams,  11  Ves.  5  ;  Griswold 
cannot  withdraw  his  share  of  the  joint  v.  Waddington,  15  Johns.  82  ;  Manjuand 
effects.  They  must  remain  in  the  posses-  v.  New  York  Manuf.  Co.,  17  Johns.  535  ; 
sion  of  the  continuing  i>artner,  for  the  Kingman  r.  Spurr,  7  Pick.  238. 
purpose  of  winding  up  the  affairs  of  the  (dd)  Mealier  v.  Cox,  37  Ala.  201. 
partnership,  which  has  been  dissolved  by  (e)  See  Mar^uand  r.  New  York  Manuf. 
the  assignment.  Horton's  Ajipeal,  13  Pa.  Co.,  17  Johns.  529,  535,  and  other  cases 
67  ;  Meaher  v.  Cox,  37  Ala.  201.  cited  in  preceding  notes. 

{r.c)   Bullen  v.  Sharp,  18    C.  B.   N.  .s. 
614;  L.  R.  1  C.  P.  86. 

9 


130 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


the  reception  of  the  things  transferred.  If,  for  example,  a  joint 
stock  company,  which  is  a  kind  of  partnership,  provided  by  its 
rules  that  the  shares  should  be  regarded  and  treated  as  transfer- 
able, and  as  a  kind  of  scrip  ;  that  each  share  was  such  an  aliquot 
part  of  the  whole,  or  represented  a  certain  amount  of  money,  and 
one  man  might  hold  a  number  of  them  ;  and  if  it  was  farther 
provided  that  a  sale  of  a  share,  acknowledged  before  the  clerk, 
and  recorded,  with  a  delivery  of  the  former  certificate  and  the 
issue  of  a  new  one,  would  make  the  holder  of  the  new  certificate 
one  of  the  company  ;  in  such  case  the  transferee  becomes  at  once 
a  stockholder,  which  in  this  case  would  mean  a  partner,  by  the 
completion  of  the  transfer  according  to  the  rules  of  the  com- 
pany. (/)     And  it  is  possible,  also,  that  the  articles  of  a  private 


(/)  This  would  seem  to  be  a  legitimate 
conclusion  from  the  opinion  of  the  court 
in  Fox  V.  Clifton,  9  Biiig.  115,  6  Bing. 
776.  There  several  persons  were  sued  a.s 
partners  in  a  distillery  company.  It  was 
in  evidence  that,  such  a  company  being  in 
process  of  formation,  upon  payment  of  a 
deposit,  scrip  receipts  were  issued  to  the 
subscribers,  which  were  to  be  surrendered 
for  certificates  of  shares,  when  the  part- 
nership deed  was  prepared  and  signed  ; 
that  the  scrip  of  the  company  was  openly 
sold  in  the  market ;  the  persons  produc- 
ing that  scrip,  and  paying  the  instalments 
due,  were,  without  further  inquiry,  per- 
mitted to  sign  the  company's  deed  as 
partners ;  and  that  Levi,  one  of  the  de- 
fendants, had,  before  the  contract  was 
made  upon  which  the  present  suit  was 
brought,  sold  his  scrip.  C.  J.  Tindal  : 
"  The  present  case  appears  not  to  be  gov- 
erned by  reference  to  the  rules  which 
restrain  partners  from  parting  with  their 
shares  in  ordinary  cases,  without  each 
other's  consent ;  for,  in  this  case,  the 
power  of  transferring  the  scrip  to  any  one 
cannot  but  have  formed  a  part  of  the 
known  original  design."  Aft-er  adding  that 
at  the  time  the  contract  was  entered  into 
with  the  jilaintiff,  Levi  was  not  and  could 
not  be  a  partner;  "On  the  other  hand, 
the  man  who  had  purchased  his  scrip,  if 
he  was  willing  to  pay  up  the  second  in- 
stalment, would  have  been  entitled  and 
allowed  to  receive  a  certificate  of  his 
share,  and  to  execute  the  deed  without 
difficulty."     But  where,   as   supposed  in 


the  text,  the  articles  of  an  association 
prescribe  a  particular  method  of  transfer- 
ring shares,  that  mode  must  be  strictly 
followed  ;  for  the  formalities  of  transfer 
are  the  terms  or  conditions  upon  which 
the  members  of  the  company  give  their 
consent  to  the  admission  of  a  new  partner. 
Ness  V.  Angas,  3  Exch.  805,  814  ;  Dodg- 
son  V.  Bell,  5  Exch.  967  ;  Kingman  v. 
Spun-,  7  Pick.  235  ■  Cochran  v.  Perry,  8 
W.  &  S.  262.  In  Ex  parte  Wood,  Keene's 
Executors'  Case,  De  G.  JI.  &  G.  272,  a 
joint-stock  company  may,  by  long  acquies- 
cence in  the  neglect  of  its  directors  to 
carry  out  one  or  more  of  its  regulations 
respecting  the  transfer  of  shares,  and  the 
admission  of  new  shareholders,  be  pre- 
cluded from  taking  advantage  of  such  in- 
formality in  the  transfer  of  shares ;  and, 
further,  that  a  shareholder,  thus  irregu- 
larly introduced  into  a  coin])any,  if  he  has 
become  de  facto  a  shareholder,  is  debarred 
from  raising  an  objection  of  form  against 
the  company,  so  as  to  relieve  himself  from 
the  obligations  of  a  shareholder.  Bargate 
V.  Shortridge,  5  H.  L.  C.  297.  And 
though,  by  articles  of  copartnership,  it  is 
provided  that  any  partner  may  assign  his 
share  of  the  .stock  by  a  certificate  in  writ- 
ing, which,  when  lodged  with  the  clerk 
of  the  company,  shall  entitle  the  assignee 
to  all  the  ]irivileges,  and  subject  him  to 
all  the  liabilities,  of  an  original  partner, 
an  assignment  without  such  certificate 
will,  nevertheless,  transfer  the  property. 
Alvord  V.  Smith,  5  Pick.  232. 


108.] 


RIGHTS   AND    DUTIES   OP   PARTNERS. 


131 


partnership  might  contain  similar  provisions,  with  a  system  of 
transfer  to  carry  them  into  effect.  But  it  remains  true,  that  the 
consent  and  acquiescence  of  all  the  members  of  a  partnership  are 
necessary  to  its  becoming  a  partnership,  however  or  whenever 
this  consent  and  acquiescence  take  place,  or  may  be  proved, 
implied,  or  inferred.^ 

§  108.  Right  of  assigning  or  transferring  Property.  — The  right  of 
every  partner  to  sell,  assign,  or  transfer,  any  part  or  the  whole  of 
the  partnership  property,  in  the  way  of  the  regular  business  of  the 
partnership,  is  absolute  and  unquestioned,  (ff)  There  is  au 
exception  to  this  rule  in  reference  to  the  real  estate  of  a  partner- 
ship, (/^)  but  none  as  to  the  personal  property.  Suppose  a  part- 
nership dealt  in  buying  and  selling  cotton,  and  all  their  stock 
consisted  in  five  hundred  bales  stored  in  New  York  ;  there  is  no 
more  doubt  that  either  one  of  the  partners  might  sell,  and  give 
good  title  to  the  whole,  than  that  he  could  do  so  with  a  single 
bale.  (^)     This,  however,  must  be  done  in  the  regular  course  of 


(ff)  For  an  interesting  case  on  the 
question,  If  one  acting  as  a  partner  sells, 
without  the  consent  of  his  copartner, 
what  amounts  to  a  ratification  of  the  sale? 
see  Cheeseman  v.  Sturges,  9  Bosw.  246. 

(/(/)  See  post,  §  277. 

{(/)  The  absolute  jus  disponendi  of 
each  partner  over  the  effects  of  the  part- 
nership is  very  early  asserted  in  Lambert's 
Case,  Go<lb.  244.  See  Barton  v.  Williams, 
5  B.  &  Aid.  405,  per  Best,  J.;  Lyies  v. 
Styles,  2  Wash.  C.  C.  224  ;  Pearpoint  v. 
Graham,  4  Wash.  C.  C.  2-34  ;  Law  v.  Ford, 
2  Paige,  310;  Winship  v.  Bank  of  the  Unit- 
ed States,  5  Pet.  561 ;  Lamb  v.  Durant, 
12  JIass.  54  ;  Pierson  v.  Hooker,  3  Johns. 
70,  per  Kent,  C.  J. ;  M'Cullough  v.  Som- 
merville,  8  Leigh,  430  ;  Tapley  v.  Butter- 
field,  1  Met.  518  ;  Whitton  v.  Hulbert, 
Freeman,  Ch.  231  ;  Forkner  v.  Stuart,  6 
Gratt.  197  ;  Fronime  v.  Jones,  13  Iowa, 
474.  In  Anderson  v.  Tompkins,  1  Brock. 
456,  Chief  Justice  Marshall  affirms  this 
jiower  in  the  most  positive  terms.  Bos- 
well  V.  Green,  1  Dutch.  390;  [Ellis  v. 
Allen,  80  Ala.  515]  ;  McGregor  v.  Ellis,  2 


Dis.  (Supr.  Ct.  Ciii.)  286.  A  partner's 
jus  disjwnendi  extends  to  choses  in  action 
as  well  as  those  in  possession.  See  Swan 
V.  Steele,  7  East,  210  ;  Harrison  v.  Sterry, 
5  Cranch,  289,  300  ;  Quiner  v.  Mar- 
blehead  Social  Ins.  Co.,  10  Mass.  482  ; 
Mills  V.  Barber,  4  Day,  428  ;  Halstead  v. 
Shepard,  23  Ala.  558,  573.  [Fulton  v. 
Loughlin,  118  Ind.  286,  20  N.  E.  796; 
Clarke  v.  Hogeman,  13  W.  Va.  718  ;  see 
KuU  V.  Thompson,  38  Mich.  685.  So  a 
partner  may  assign  a  patent  right  belong- 
ing to  the  firm.  Christ  v.  Firestone,  (Pa.) 
11  Atl.  395.  So  he  may  indorse  commer- 
cial paper.  Fulton  i'.  Loughlin,  118  Ind. 
286,  20  N.  E.  796  ;  Walker  r.  Kee,  14  S.  C. 
142, 16  8.  C.  76.  Or  assign  a  chattel  mort- 
gage Most-s  V.  Hatfield, 27  S.  C  324,  3  S.  E. 
538.]  One  ]>artner  may  bind  his  firm  by 
assenting  to  the  transfer  of  a  debt  on  ac- 
count, due  from  the  firm,  from  one  banker 
to  another.  Beale  v.  Caddick,  2  H.  &  X. 
326.  This  right  is  in  no  way  affected  by 
a  secret  act  of  bankruptcy  previously  com- 
mitted by  another  partner.  Fox  v.  Hau- 
burj^   Cowp.   445.     Nor  by  the  fact  that 


^  A  voluntary  association  with  transferable  and  heritable  shares  is  valid  at  common 
law.  Ricker  v.  American  Loan  &  Trust  Co.,  140  Mass.  346,  5  N.  E.  284  ;  McFadden 
V.  Leeka,  48  Oh.  St.  513,  28  N.  E.  874  ;  McN.dsh  v.  Hulless  Oat  Co.,  57  Vt.  316. 
Some  of  its  aflfairs  are  frequently  regulated  by  statute.  Davison  v.  Holden,  55  Conn- 
103,  10  Atl.  575  ;  People  v.  Wemple,  117  X.  Y.  136,  22  N.  E.  1046.     See  post,  ch.  18. 


132 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


the  business  of  the  firm;  for  outside  of  this  he  has  no  such 
power.  (7i)  If  he  docs  this  in  fraud  of  tlic  other  partners,  —  that 
is,  if  he  sells  tlie  wliole,  or  any  part,  intending  to  run  off  with  the 
proceeds,  and  does  run  off  with  them,  —  this  has  no  effect  on  the 
title  of  the  purchaser,  unless  he  has  some  knowledge  of  the  fraud, 
or  would  have  had  some  knowledge  of  it  but  for  a  negligence  so 
gross  as  would  tend  to  imply  fraud,  (i)  ^ 

§109.  Eight  to  pledge  or  mortgage.  —  If,  however,  a  })artncr 
undertakes  not  to  sell  the  goods  or  property  of  the  partnership, 
but  to  assign  them,  by  way  of  pledge  or  mortgage  to  secure  the 
debts  of  the  firm,  or  in  any  unusual  way,  he  has  not  necessarily 
any  power  to  do  this.  Neither  do  we  consider  it  certain  that  he 
has  no  power  to  do  it.  On  the  one  hand,  such  a  transaction 
seldom  or  never  belongs  to  the  regular  business  of  a  firm,  (j)     If 


the  proceeds  ai'ising  from  a  transfer  of 
partnership  eflects  have  not  come  to  the 
use  nor  to  the  advantage  of  the  firm.  Ar- 
nold I'.  Brown,  24  Pick.  89.  Xor,  in  point 
of  principle,  is  there  any  ditference  be- 
tween so-called  general  partnerships  and 
those  for  a  special  adventure  as  to  the 
power  possessed  by  each  partner  of  dis- 
posing of  the  joint  proy)erty.  Livingston 
V.  Roosevelt,  4  Johns.  251,  205,  277.  See 
the  lang mge  of  Best,  J-,  in  Barton  v. 
■Williams,  .T  B.  &  Aid.  405.  [See  on  this 
subject  Ames,  Cas.  on  Part.,  572  n.]. 

\h)  2  Chan.  Cases,  temp.  Car.  2,  32, 
38.  Anon.,  16  Vin.  Abr.  242.  See  Liv- 
ingston V.  Roosevelt,  4  Johns.  266,  267, 
278  ;  Walden  v.  Sherburne,  15  Johns. 
422;  [AVilcox  v.  Jackson,  7  Coh  521.]  See 
the  remarks  of  Marshall,  C.  J.,  in  Ander- 
son V.  Tompkins,  1  Brock.  460  ;  Kogers  v. 
Batchelor,  12  Pet.  221.  See  farther,  as 
to  this  point,  section  3d,  subsection  2d,  of 
this  chapter,  on  the  general  extent  of  the 
power  of  a  partner  ;  and  see  Wells  v. 
March,  30  jST.  Y.  344 ;  Coope  v.  Bowles, 
42  Barb.  87;  Palmer  v.  Myers,  43  Barb. 
509. 


{))  So  it  was  said  by  Marshall,  C.  J., 
in  Auderson  v.  Tompkins,  1  Brock.  460. 
An  assignment  by  one  partner  of  jiartner- 
ship  assets  to  another,  to  be  applied  to  the 
individual  purposes  of  the  latter,  is  a 
breach  of  trust  in  both  assignor  and  as- 
signee, and  void  as  to  the  firm.  Wood  v. 
Shepherd,  2  Patt.  &  Heath,  442  ;  Rod- 
riguez V.  Hefl"ernan,  5  Johns.  Ch.  417  ; 
Halstead  v.  Shepard,  23  Ala.  558  ;  Clay- 
ton V.  Hardy,  27  Mo.  536  ;  Croughton  v. 
Forrest,  17  Mo.  131.  In  this  last  case, 
where  one  partner  fraudulently  disposed 
of  all  the  partnership  stock  and  effects, 
the  vendees,  who  had  received  the  prop- 
erty with  knowledge  of  the  fraud  or  with- 
out consideration,  were  held  to  be  trustees 
thereof  for  the  benefit  of  the  firm.  See 
Kirkpatrick  v.  Turnbull,  Addison,  259  ; 
Rogers  v.  Batchelor,  12  Pet.  221.  [Ellis 
V.  Allen,  80  Ala.  515  {scmhk)  ] 

(j)  In  Metcalf  v.  Royal  Exch.  Ass.  Co., 
Barnard.  343,  it  seems  to  be  implied  that 
a  pledge  of  partnership  effects,  in  the  ex- 
ercise of  a  power  which  belongs  to  the 
general  course  of  business  of  a  trading 
partnership,  is  valid.     See  the  remarks  of 


^  It  would  seem  that  a  partner  who  has  power  to  sell  part  of  the  firm  chattels,  — 
that  is,  the  chattels  kept  for  sale,  has  power  to  sell  them  all  for  cash.  Ellis  v.  Allen, 
80  Ala.  515,  2  So.  676  ;  Crites  v.  Wilkinson,  65  Cal.  559,  4  Pac.  567  ;  Coakley  v. 
Weil,  47  Md.  277  ;  Schneider  v.  Sansom,  62  Tex.  201.  But  it  seems  that  a  sale  not 
merely  of  the  goods  kept  for  sale  but  of  all  the  assets  of  the  business  is  not  within  the 
partnership  powers,  and  may  be  avoided  by  the  other  partner.  Drake  v.  Thyng,  37 
Ark.  228  ;  Wilcox  v.  Jackson,  7  Col.  521.  Such  a  sale  would  of  course  transfer  all  the 
interest  of  the  partner  who  made  the  sale.  Carrie  v.  Cloverdale  Banking  &  Commer- 
cial Co.,  90  Cal.  84,  27  Pac.  58. 


§  110.] 


RIGHTS    AND    DUTIES   OF   PARTNERS, 


133 


it  does,  of  course  he  has  this  power.  If  it  does  not,  it  may  still  be 
so  far  connected  with,  or  so  naturally  arise  out  of  or  promote,  their 
regular  business,  that  if  the  transaction  be  an  honest  one,  without 
bad  faith  on  the  part  of  any  party,  we  should  say  it  was  a  valid 
transaction,  which  the  law  would  enforce.  Perhaps  a  consider- 
ation of  the  authorities  and  of  the  reason  of  the  case  would  lead 
to  this  difference  between  the  selling  and  the  assigning  in  pledge 
of  partnership  property  by  one  partner.  If  the  sale  take  place  in 
the  course  of  business,  it  would  bind  the  other  partners,  as  we 
have  seen,  though  fraudulent  as  to  them  ;  but  an  assignment  in 
pledge  or  mortgage,  not  being  in  the  way  of  business,  would  bind 
the  other  partners,  if  it  were  done  in  good  faith  for  the  advantage 
of  the  firm,  and  was  reasonable  in  itself,  but  not  otherwise.  (^) 

§  110.    Right   to  assign   for   Benefit    of  Creditors.  —  One   partner 
may,  in  good  faith,  assign  a  part  of  the  propei'ty  to  pay  or  secure 


Shaw,  C.  J.,  in  Tapley  v.  Butterfidd,  1 
Met.  515,  where  a  mortgage  by  one  j)art- 
ner  of  the  whole  stock  iu  trade  of  a  part- 
nership, to  secure  a  creditor,  was  held 
valid.  Anderson  v.  Tompkins,  1  Brock. 
456 ;  Deckard  v.  Case,  5  Watts,  22.  See 
also  ililton  v.  Mosher,  7  Met.  244;  Brown- 
rigg  V.  Rae,  5  Exch.  489 ;  Sweetzer  v. 
Mead,  5  Mich.  107.  In  Ex  parte  Lloyd, 
1  Mont.  &  A.  494,  it  seems  to  have  been 
considered  that  the  peculiar  circumstances 
of  that  case  authorized  one  partner  to  bind 
his  firm  by  an  etpiitable  mortgage.  There, 
W.,  being  the  sole  owner  of  certain  free- 
hold premises,  entered  into  partnership 
with  0.,  and  W.  &  0.  thenceforth  occupied 
the  premises  as  cotton  spinners,  and  erected 
a  steam-engine,  kc,  for  the  purposes  of  their 
joint  trade.  The  firm  being  indebted  to 
their  bankers,  0.,  in  June,  1822,  deposited 
with  them  the  leases  of  certain  leasehold 
premises,  with  a  memorandum  setting  out 
a  list  of  the  title-deeds  deposited,  and  con- 
cluding thus:  "These  papers  are  placed 
in  the  hands  of  Messrs.  Jones,  Lloyd,  & 
Co.,  as  security  for  what  they  may  think  fit 
to  advance  to  0.  &  W."  In  August,  1822, 
"W.  also  deposited  with  them  a  lease  of  a 
freehold  piece  of  land,  on  which  was  situ- 
ated a  mill  and  other  buildings,  with  the 
following  memorandum:  "  These  deeds  of, 
&c.,  are  placed  in  the  hands  of  Messrs. 
Lloyd  &  Co.,  as  security  for  what  they  may 
think  proper  to  advance  to  0.  &  W.,  by 


W.  The  buildings  alone  are  insured  for 
upwards  of  2,  OOOZ. ;  machinery,  &c.,  2,000Z. 
more."  0.  k  W.  liaving  become  bankrupt, 
and  the  bankers  petitioning  to  be  declared 
equitable  mortgagees  of  the  premises,  the 
court  thought  that,  under  the  circum- 
stances, there  was  no  difficulty  in  finding 
that  the  one  partner  had  authority  to 
pledge  the  property,  in  order  to  obtain  an 
advance  of  money  for  partnership  pur- 
poses ;  and  that  W.  might  fairly  be  taken 
as  mortgaging,  for  himself,  his  own  free- 
hold interest  in  the  land  and  buildings, 
and  as  agent  for  the  firm,  mortgaging  the 
leasehold  interest  and  the  property  of  the 
firm  in  the  machinery. 

(^•)  In  the  three  following  cases,  where 
partnership  property  was  pledged  without 
any  fraud  or  collusion,  or  any  knowledge 
on  the  part  of  the  pledgee  of  the  interest 
of  the  firm  in  the  pledge,  the  contract  was 
held  to  bind  the  copartnership.  Raba  v. 
Ryland,  Gow,  132  ;  Tupper  v.  Haythorne, 
Gow,  135,  n.;  Reid  i;.  Hollinshead,  4  B.  & 
C.  867,  s.  c.  7  D.  &  R.  444.  On  the  other 
hand,  in  Ex  parte  Copeland,  2  Mont.  &  A. 
177,  s.  c.  3  Dea.  &  Ch.  199,  two  of  the 
judges  strongly  intimate  their  opinion  that, 
if  at  the  time  of  a  pledge  by  one  partner 
the  pledgee  is  conusant  of  the  joint  inter- 
est of  the  other  partners,  such  pledge  will 
not  be  valid  as  against  the  other  partners. 
See  Ex  parte  Gellar,  1  Rose,  297  ;  Snaith 
V.  Burridge,  4  Taunt.  684. 


134  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

an  existing  debt,  or  a  debt  to  be  contracted.  (Z)  ^  [There  is  some 
doubt,  however,  whether  he  has  power  to  assign  the  whole  prop- 
erty in  trust  for  all  the  creditors.  His  power  to  transfer  firm 
property  generally  is  within  the  scope  of  the  firm  business,  since 
the  object  of  the  business  is  to  dispose  of  such  property.  But  the 
assignment  of  all  the  property  in  trust  for  creditors  is  necessarily 
outside  the  scope  of  the  business,  since  it  puts  an  end  to  the  busi- 
ness. The  better  opinion  therefore  seems  to  be  that  in  the 
ordinary  case  one  partner  has  no  power  to  assign  all  the  assets  in 
trust  for  creditors  without  the  consent  of  the  other  partners.^    But 

It  a])pears,  from  the  above  cases,  that  deliver  specific  portions  of  partnership 
there  is  no  distinction  between  general  property  to  a  creditor  of  the  firm  in  pay- 
partnerships  and  those  for  a  particular  ment  of  a  debt ;  that,  inasmuch  as  it  is  in 
adventure,  as  to  the  power  in  each  partner  the  power  of  one  member  of  a  firm  to  pay 
to  pledge,  mortgage,  &i;.,  the  partnership  off  a  debt,  he  may  pay  it  in  a  si)ecific  cluit- 
effects.  tel  actually  delivered  to  the  creditor,  as 

(/)  See  McClelland  v.  Renisen,  14  Abb.  well  as  in  money."     Anderson   v.  Tomp- 

Prac.    332 ;    Young   v.    Keighly,  15  Ves.  kins,    1    Brock.   461  ;   Hodges   v.   Harris, 

557  ;  Mills  v.  Barber,  4  Day,  428  ;  Fox  v.  6  Pick.  360  ;  Tapley  v.  Butterfield,  1  Met. 

Hanbury,  Cowp.  445;  Harrison  v.  Sterry,  518;  Havens  i".  Hussey,  5  l'ai>;e,  31,  32; 

5  Cranch,  289  ;  Dana  v.  Lull,  17  Vt.  390.  Everet   v.    Strong,    5    Hill,   163,    7    Hill, 

In  Deming  v.  Colt,  3  Sandf.  290,  Oakley,  585  ;   Kirby  v.   IngersoU,  1  Hare  (Mich.), 

C.  J.,  speaking  of  the  law  of  New  York,  172,  s.  c.  1  Doug.  (Mich.)  477  ;  CuUum  v. 

says  that  it  is  settled  in  that  State,  "that  Bloodgood,  15  Ala.  34  ;  Boswell  v.  Green, 

one  partner  may,  from  time  to  time,  witli-  1  Dutch.  390.     See  McNutt  v.  Strayhorn, 

out  the  as.sent  of  his  copartner,  assign  and  39  Pa.  269. 

1  It  is  almost  universally  held  that  a  partner  has  authority  to  pledge  or  mortgage 
part  of  the  property  to  secure  a  firm  debt.  Gates  i\  Bennett,  33  Ark.  475  ;  Phillips  v. 
Trowbridge  Furniture  Co.,  86  Ga.  699,  13  S.  K.  19;  McCarthy;;.  Seisler,  130  Ind.  63,  29 
N.  E.  407  ;  Citizens'  Nat.  Bank  v.  Johnson,  79  la.  290,  44  N.  W.  551  ;  Schwanck  v. 
Davis,  25  Neb.  196,  41  N.  W.  141  ;  Hembree  v.  Blackburn,  16  Ore.  153,  19  Pac.  73  ; 
Woodniir  V.  King,  47  Wis.  261,  2  N.  W.  452  ;  Hage  v.  Campbell,  78  Wis.  572,  47 
N.  W.  179.  Contra,  Osborne  v.  Barge,  29  F.  R.  725.  Since  he  may  give  such  a  mortgage, 
he  may  consent  to  its  cancellation.  Phillips  v.  Trowbridge  Furniture  Co.,  86  Ga.  699, 
13  S.  E.  19.  It  would  seem  tliat  such  a  mortgage  is  good  if  it  covers  all  the  chattels  of 
the  firm.  Letts-Fletcher  Co.  v.  McMaster  (la.),  49  N.  W.  1035  ;  and  .see  the  cases  cited 
suprn.  But  see  Burbank  v.  Wiley,  79  N.  C.  501.  A  partner  has  also  authority  to 
pass  absolute  title  to  partnership  chattels  in  payment  of  a  firm  debt.  Hanchett  v. 
Gardner,  138  111.  571,  28  N.  E.  788  ;  Johnson  v.  Robinson,  68  Tex.  399,  4  S.  W.  625. 
"  We  can  conceive  of  no  partnership,  whether  commercial  or  non-trading,  which  may 
not,  in  the  line  of  the  partnership  business,  incur  debts.  .  .  .  We  regard  it  as  thor- 
oughly well-settled  law  that  a  partnership,  or  any  one  of  its  members,  without  express 
authority  from  his  co-partners,  may  transfer  a  part  of  the  partnership  property  in  pay- 
ment of  a  debt  of  the  firm,  and  this  wholly  regardless  of  the  non-trading  character  of 
the  concern."     McClellan,  J.,  in  Ullman  v.  Myrick,  93  Ala.  532,  536,  8  So.  410. 

2  Pearpoint  v.  Graham,  4  Wash.  C.  C.  232  ;  Adams  v.  Thornton,  82  Ala.  260,  3  So. 
20  ;  Loeb  V.  Pierjyoint,  58  la.  469,  12  N.  W.  544  ;  Hunter  v.  Wayiiick,  67  la.  555,  25 
N.  W.  776  ;  Shattuck  v.  Chandler,  40  Ka.s.  516,  20  Pac.  2-25,  Maughlin  v.  Tyler,  47  Md. 
545  ;  Kirby  v.  IngersoU,  1  Doug.  Mich.  477  ;  Stein  v.  La  Dow,  13  Minn.  412  ;  Hughes 
V.  Ellison,  5  Mo.  463  ;  Einer  v.  Beste,  32  Mo.  240,  39  Mo.  69  ;  Hook  v.  Stone,  34 


§  111.]  RIGHTS   AND    DUTIES   OF   PARTNERS.  135 

if  the  other  partners  are  absent  and  cannot  be  come  at  to  be  con- 
sulted, one  partner  who  is  thus  left  in  charge  of  the  business  may 
in  an  emergency  make  a  general  assignment.^] 

§  111.    Assignment  by  surviving  Partner.  —  If  a  partner  die,  the 

Mo.  329  ;  Steinhart  v.  Fyhiie,  5  Mont.  463,  6  Pac.  367  ;  Hitchcock  v.  St.  John,  Hoff. 
Ch.  511;  Haven.s  v.  Hu.ssey,  5  Paige,  30;  Fisher  v.  Murray,  1  E.  D.  Smith,  341; 
Deniing  v.  Colt,  3  Sandf.  284  ;  Hayes  v  Heyer,  3  Sandf.  293  ;  Holland  i'.  Drake,  29 
Oh.  St.  441;  Daniels,  Petitioner,  14  R.  I.  500;  Williams  v.  Roberts,  6  Cold.  493; 
Turner  o.  Dugla.ss,  77  Te.\.  619,  14  S.  W.  221;  Dana  v.  Lull,  17  Vt.  390  ;  Coleman  v. 
Darling,  66  Wis.  155,  28  N.  W.  367.  See  Wilco.x  v.  Jackson,  7  Col.  521  ;  Simmons 
V.  Curtis,  41  Me.  373  ;  Mabbett  v.  White,  12  N.  Y.  442  ;  Wetter  v.  Schlieper,  4  E.  D. 
Smith,  707  ;  McCuUough  v.  Somnierville,  8  Leigh,  415.  There  are  a  few  decisions 
which  uphold  the  power  of  a  single  partner  to  make  a  general  assignment.  Anderson 
V.  Tompkins,  1  Brock.  461  (scmbk)  ;  Hennessy  v.  Western  Bank,  6  W.  &  S.  300  ; 
Robinson  v.  Crowder,  4  McC.  519  ;  Graves  v.  Hall,  32  Tex.  665  ;  Gordon  v.  Cannon, 
18  Gratt.  387  ;  Scruggs  v.  Burruss,  25  W.  Va.  670.  If  one  partner  expressly  objects 
the  other  certainly  has  no  power  to  make  a  general  assignment.  Adams  v.  Thornton, 
82  Ala  260,  3  So.  20  ;  Williams  v.  Roberts,  6  Cold.  493.  If  the  other  partners  assent 
to  an  assignment  or  ratify  it  the  assignment  is  valid,  though  made  by  a  single  partner. 
Osborne  v.  Barge,  29  F.  R.  725  ;  Adee  v.  Cornell,  93  N.  Y.  572  ;  Klumpp  v.  Gardner, 
114  N.  Y.  153,  21  N.  E.  99  ;  Hooper  v.  Baillie,  118  N.  Y.  413,  23  N.  E.  569.  Such 
assent  must  be  made  to  appear  affirmatively.  Steinhart  v.  Fyhrie,  5  Mont.  463.  If 
the  assignment  is  without  authority  it  of  course  conveys  no  property  of  the  firm  ;  and 
though  a  ratification  by  the  other  partners  generally  makes  it  good  from  its  date, 
those  who  acquire  a  lien  on  the  property  meanwhile,  as,  for  instance,  attaching  firm 
creditors,  may  hold  in  spite  of  the  ratification.  Loeb  v.  Pierpoint,  58  la.  469,  12 
N.  W.  544;  Stein  v.  La  Dow,  13  Minn.  412  ;  Kittrell  v.  Blum,  77  Tex.  336,  14  S.  W. 
69  ;  Coleman  v.  Darling,  66  Wis.  155,  28  N.  W.  367.  But  see  Adee  i;.  Cornell,  93 
N.  Y.  572. 

1  Harrison  v.  Sterry,  5  Cranch,  289  ;  Andenson  v.  Tompkins,  1  Brock.  456  ;  Loeb 
V.  Pierpoint,  58  la.  469,  12  N.  W.  544  ;  Hunter  v.  Waynick,  67  la.  555,  25  X.  W. 
776  ;  Kirby  v.  IngersoU,  1  Doug.  Mich.  477  ;  Stein  v.  La  Dow,  13  Minn.  412  ;  Hol- 
land V.  Drake,  29  Oh.  St.  441  ;  Deckard  v.  Case,  5  W'atts,  22  ;  Daniels,  Petitioner, 
14  R.  I.  500  ;  Robinson  v.  Ciowder,  4  McCord,  519  :  Johnson  i'.  Robinson,  68  Tex. 
399,  4  S.  W.  625  (scinhic)  ;  McCullough  v.  Somnierville,  8  Leigh,  415;  Williams  v. 
Gillespie,  30  W.  Va.  586,  5  S.  E.  210  ;  First  Nat.  Bank  r.  Hackett,  61  Wis.  335,  21 
N.  W.  280  ;  Coleman  v.  Darling,  66  Wis.  155,  28  N.  W.  367.  In  Dickinson  v.  Legare, 
1  De-saus.  537,  the  earliest  case  upon  the  subject,  a  contrary  decision  was  made.  But,  in 
that  in.stance,  "  the  assignment,  being  made  by  a  citizen  of  one  of  the  United  States 
during  the  existence  of  a  war,  to  an  alien  enemy  and  in  an  enemy's  country,  was  {)rob- 
ably  void  by  the  laws  of  war,  so  far  at  least  as  to  prevent  its  being  carried  into  eff'ect 
by  any  of  the  courts  of  this  country."  Per  Chancellor  Walworth,  in  Egberts  v.  Wood, 
3  Paige,  517,  524.  And  in  effect  the  case  is  overruled  by  the  subsequent  case  of  Robin- 
sou  V.  Crowder,  4  McC.  519.     See  Kimball  v.   Hamilton  Fire  Ins.  Co.,  8  Bosw.  495. 

In  New  York,  however,  absence  of  one  partner  will  not  give  power  to  the  others  to 
make  a  general  assignment  in  trust  for  creditors.  Robinson  r.  Gregory,  30  N.  Y.  350 
(cited)  ;  Coope  v.  Bowles,  42  Barb.  87;  Palmer  v.  Myer.s,  43  Barb.  509  (see  earlier 
decisions,  however,  —  Deming  v.  Colt,  3  Sandf.  291  ;  Fisher  v.  Murray,  1  E.  D.  Smith, 
341  ;  Robinson  v.  Mcintosh,  3  E.  D.  Smith,  221  ;  Kemp  v.  Carnley,  3  Duer,  1).  But 
if  a  partner  absconds,  the  others  may  make  such  assignment.  Palmer  v.  Myers,  43 
Barb.  509. 

It  was  held  in  Stein  v.  La  Dow,  13  Minn.  412,  that  the  mere  temporary  absence  of 
one  partner  will  not  give  the  other  power  to  assign  in  trust  for  creditors. 


136 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII. 


surviving  partners  may  undoubtedly  a[)ply  the  effects  of  the  part- 
nership to  the  payment  of  its  debts,  without  consulting-  at  all  the 
representatives  of  the  deceased,  (p)  ^ 

§112.  Assigumeiit  of  individual  Share.  —  The  power  of  each 
partner  over  his  own  share  or  intciest  in  the  partnership  pruji- 
erty  stands  upon  an  entirely  different  footing  from  his  power  over 
the  partnershij)  property  generally.  It  is  certain  that  no  partner 
has  any  exclusive  right  to  any  one  or  more  things  of  the  jiartner- 
ship.  {q)     If,  in  the  case  supposed  before,  the  partnership  owning 


ip)  Egberts  v.  Wood,  3  Paige,  517  ; 
Wilson  t;.  Soper,  13  11  Mou.  411  ;  thougli, 
where  there  is  more  than  one  survivor,  one 
of  them  cannot  assign  the  whole  interest  in 
the  partnership  effects  to  trustees,  for  the 
benefit  of  preferred  creditors,  without  the 
concurrence  of  the  other.  Egberts  v. 
Wood,  supra.  The  remaining  partners 
have  the  same  rights  as  against  an  assignee 
of  all  one  partner's  interest.  Clark  v. 
Wilson,  19  Pa.  414.  As  to  whether,  when 
one  of  the  partners  is  dormant,  a  deed  of  as- 
signment of  all  the  partnershij)  pro]ierty,  by 
the  other  partner  or  partners,  for  the  benefit 
of  creditors,  is  valid  without  being  e.xecuted 
by  liim,  see  Egberts  n.  Wood,  supra  ;  Drake 
V,  Rogers,  6  Mo.  317.  Whether  the  gene- 
ral partners  in  a  limited  partnership  may 
make  a  general  assignment  of  the  joint 
funds,  witliout  the  consent  of  the  special 
partner,  was  doubted  in  Mills  v.  Argall,  6 
Paige,  577.     See)>os/,ch.  17- 

(q)  Hence  no  general  principle  of  the 
law  of  partnership  is  better  settled  than 
that  nothing  is  to  be  considered  the  share 


of  any  one  partner  but  his  projiortion  of 
the  residue  on  the  balancing  of  the  |>artner- 
ship  accounts.  Accordingly,  where  a 
member  of  a  copartnership  sold  and  as- 
signed to  another  "  all  his  interest  iu 
and  to  the  property,  goods,  wares,  and 
merchandise,  and  debts  belonging  to  the 
hrm,'  it  was  held  that  a  debt  owing  by 
himself  to  the  firm  did  not  pass  by  the 
assignment ;  the  interest  of  the  assignor 
being  only  what  remained  over  and  above 
the  amount  of  his  indebtedness  to  the  firm. 
Van  Scoter  v.  Letl'erts,  11  Barb.  140. 
[Painter  v.  Painter,  68  Cal.  395,  9  Pac. 
450;  Norman  v.  Hudleston,  64  111.  11; 
Over  V  Hetherington,  66  Ind.  365  ; 
Thompson  v.  Lowe,  111  Ind.  272,  12 
N.  E.  476;  Houk  v.  Walker,  (Ind.)  30 
N.  E.  1080  ;  Wiggin  v.  Goodwin,  63  Me. 
389  ;  Lambert  v.  Griffith,  50  Mich.  286, 
15  N.  W.  458;  Finley  v.  Fay,  17  Hun,  67.] 
See  further  Fox  v.  Hanbury,  Covvp.  445  ; 
Smith  V.  I)e  Silva,  Cowp.  469  ;  West  v. 
Skip,  1  Ves.  239  ;  Ex  parte  Ruffin,  6  Ves. 
119  ;  Ex  parte  Williams,  11  Ves.  5  ;  Taylor 


1  A  surviving  partner  may  pledge  or  mortgage  the  firm  assets  to  secure  firm 
debts.  Bradford  Commercial  Banking  Co.  v.  Cure,  31  Ch.  D.  324  ;  Bohler  u.  Tappan, 
1  F.  R.  469;  First  Nat.  Bank  v.  Parsons,  128  Ind.  147,  27  N.  E.  486.  Cuntra, 
Anderson  v.  Norton,  15  Lea,  14,  on  the  ground  that  a  surviving  partner  cannot 
give  preference  to  a  creditor.  So  a  surviving  partner  may  make  a  valid  assignment 
for  the  benefit  of  firm  creditors.  Enier.son  v.  Senter,  118  U.  S.  3;  Shattuck  v.  Chand- 
ler, 40  Kas.  516,  20  Pac.  225  (scmble)  ;  Atchison  v.  Jones,  (Ky.)  1  S.  W.  406  ;  Gable 
V.  Williams,  59  Md.  46  (scmble)  ;  Riley  v.  Carter  (Md.),  25  Atl.  667  ;  Hanson  ;;.  Met- 
calf,  46  Minn.  25,  48  N.  W.  441  ;  Haynes  v.  Brooks,  116  N.  Y.  487,  22  N.  E.  1083  ; 
Farmers'  Bank  v.  Ritter,  (Pa.)  12  Atl.  659.  According  to  the  better  view,  such  an 
assignment  is  good  even  if  one  creditor  is  preferred.  Williams  v.  Whedon,  109  N.  Y. 
333,  16  N.  E.  365  ;  Be.ste  v.  Burger,  HON.  Y.  644,  17  N.  E.  734  (overruling  Nelson 
t;.  Tenney,  36  Hun,  327);  Patton  v.  Leftwich,  86  Va.  421,  10  S.  E.  686.  And  see  Roach 
V.  Brannon,  57  Miss.  490  ;  Krueger  v.  Speith,  8  Mont.  482,  20  Pac.  664.  Contra,  Sals- 
bury  V.  Ellison,  7  Col.  167,  2  Pac.  906,  3  Pac.  485,  on  the  ground  that  a  surviving  part- 
ner is  a  trustee  for  creditors.      See^os^,  §  345. 


§  112.] 


RIGHTS    AND    DUTIES   OF   PARTNERS. 


137 


the  cotton  agreed  not  to  sell  it,  no  one  partner  could  separate  ten 
bales,  and  say  to  a  customer,  The  firm  will  sell  nothing;  but  I 
will  take  these  as  my  own,  and  will  sell  them  to  you.  Such  a  sale 
would  pass  no  title  whatever,  (r)  The  proj)erty  sold  would  be 
available  for  the  debts  of  the  partnership ;  and  so,  perhaps,  would 
any  property  into  which  it  was  converted,  so  long  as  that  could 
be  distinctly  traced  and  identified,  (s) 

Any  partnership  would  probably  consent  that  a  partner  might 
take  a  part  of  their  goods  on  his  own  account,  and  would  charge 
the  same  to  him.  But  without  such  consent,  express  or  implied, 
it  is  quite  clear  that  he  can  appropriate  nothing  to  himself. 
Every  partner  owns  the  whole  partncrshij)  property,  subject  to 
the  equal  ownership  of  every  other  partner  ;  and  no  one  partner 
can  make  his  own  ownership  of  any  part  absolute,  and  relieve  it 
from  the  encumbrance  of  the  ownership  of  the  others  without 
their  consent.     Because  each  partner  owns  the  property  of  the 


V.  Fields,  4  Ves.  396,  .559  ;  Holdenien  v. 
Sliackles,  8  B.  &  C.  612  ;  Eddie  v.  David- 
son, 3  Doug.  650  ;  Pierce  v.  Jackson,  6 
Mass.  243  ;  Fisk  v.  Herrick,  6  Mass. 
271  ;  Doner  v.  Stautfer,  1  Pen.  &  VV. 
198  ;  Church  v.  Knox,  2  Conn.  514,  518  ; 
Con  well  V.  Sandidge,  8  Dana,  278  ;  Hodges 
V.  Holenian,  1  Dana,  53;  Pierce  v.  Tiernan, 
16  Ci.  &  J.  253  ;  Commercial  Bank  v. 
Wilkins,  9  Me.  28  ;  Murray  v.  Murra\', 
5  Johns.  Ch.  70  ;  Nicoll  v.  Mum- 
ford,  4  Johns.  Ch.  522 ;  Rodriguez  v. 
Heffernan,  5  Johns.  Ch.  428  ;  Greene  v. 
Greene,  1  Ohio,  251;  Sumner  y.  Hampson, 
8  Ohio,  330 ;  Dyer  v.  Clark,  5  Met.  575  ; 
Lingen  v.  Simpson.  1  Sim.  k  St.  603.  We 
shall  he  obliged  to  consider  this  question 
of  the  interest  of  one  partner  in  partner- 
ship property  more  in  detail,  when  we 
treat  of  the  remedies  of  third  persons 
against  partners,  and  of  partners  intc?-  se. 
See  post;  §§  179,  255.  In  Lovejoy  v. 
Bowers,  11  N.  H.  404,  it  was  held  that 
one  partner  cannot  sell  or  mortgage  an  un- 
divided interest  in  a  specific  part  ;  the 
profierty  belonging  to  the  partnership. 
The  property  constitutes  a  fund  or  capital 
to  carry  on  the  business  of  the  partnership, 
and  to  pay  partnership  creditors  ;  and  the 
separate  interest  of  each  partner  is  an 
interest  in  the  surplus.  Morrison  v.  Blod- 
gett,  S  N.  H.  231. 

(r)  See  Rogers   v.   Batchelor,    12    Pet. 
221. 


(s)  Croft  V.  Pyke,  3  P.  Wms.  180.  lu 
West  V.  Skip,  1  Ves.  239,  Lord  Chancellor 
Hardwicke  asserted  the  general  principle, 
that  the  "partner's  lien"  (which  is 
nothing  but  the  right  of  the  partnership 
to  its  own  property)  is  not  appropriated  to 
the  original  stock  alone,  but  attaches  to 
whatever  is  substituted  in  its  place.  He 
said  that  a  partnership  lien  "  is  not  con- 
sidered as  appropriated  to  the  stock 
brought  in,  but  to  every  thing  coming 
in  lieu  duiing  the  continuance  or  after  the 
determination  of  the  partnership.  As  in 
Bucknal  v.  Roiston,  Pre.  Cli.  285,  where  a 
lien  was  held  to  be  on  those  goods  which 
were  the  produce  of  the  original  goods. 
So  in  Brown  v.  Heathcote,  Michael.  T. 
1749,  it  was  held  that  it  continued  on  what 
was  the  produce  by  way  of  barter  and  sale  ; 
and  that  holds  much  more  strongly  in  the 
case  of  a  partnership  trade  which  cannot 
otherwise  be  continued."  The  cases  ot 
Skii>  V.  Harwood,  2  Swanst.  586,  and  of 
Ridgley  v.  Carey,  4  Har.  &  M'H.  167, 
come  yet  nearer  to  the  proposition  of  the 
te.xt.  Of  course,  however,  this  doctrine  is 
not  pushed  to  the  extent  of  saying,  that 
what  at  any  time  during  the  partnership 
has  been  part  of  the  partnership  eil'ects 
sliall  in  all  future  time  remain  part  of  the 
partnership  effects,  notwithstanding  a  bond 
fide  transmutation.  Ex  parte  Ruffin,  6 
Ves.   119. 


138  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

firm,  it  has  been  held  that  one  of  two  partners  cannot  be  guilty  of 
burglary  or  larceny  as  to  a  house  or  propert}-  owned  by  the 
firm,  (ss) 

But  although  no  partner  owns  absolutely  any  part  of  the  prop- 
erty, he  has  his  own  interest  in  the  whole ;  which  interest  we 
have  defined  as  an  ownership  of  the  whole,  subject  to  the  owner- 
siiip  of  the  other  partners.  And  the  question  has  repeatedly 
arisen,  whether  he  can  sell  and  transfer  this  interest.  The 
answer,  in  general,  is  in  the  affirmative.  (0  But  a  court  of  equity 
will  not  foreclose  a  mortgage  made  by  a  partner  of  his  interest  in 
the  partnership  property  to  secure  his  individual  debt,  if  the  prop- 
erty of  the  partnership  will  not  more  than  pay  the  debts  of  the 
partnership,  {tt) 

It  may  be  added,  that  while  partners  may  own  the  partnership 
property  in  whatever  proportions  they  choose,  they  arc  presumed, 
in  the  absence  of  evidence,  to  have  equal  interests.  (^tW) 

This  power  of  sale  must,  however,  be  subject  to  many  qualifica- 
tions. It  is  plain,  from  what  was  said  in  the  preceding  section, 
that  he  cannot  make  his  transferee  a  partner  in  his  place,  without 
the  consent  of  the  others.  But,  if  he  can  transfer  his  interest  at 
all,  he  must  be  able  to  give  to  the  transferee  some  of  his  powers 
as  partner,  in  order  to  make  the  transfer  available.  Thus,  he 
must  give  to  him  the  i)Ower  of  requiring  an  account  and  settle- 
ment of  the  concern,  or,  at  least,  some  just  and  adequate 
ascertainment  and  setting  off  in  severalty  of  his  share,  (w) 

For  this  purpose,  the  transferee  must  go  into  equity  ;  for  it  is 
not  easy  to  see  how  he  could,  by  means  of  trover  or  replevin  or 
case  or  assumpsit,  find  a  full  and  sufficient  remedy.  But,  if  he 
goes  into  equity,  he  must  be  prepared  to  do  equity,  and  to  submit 
to  the  application  of  the  principles  of  equity  to  his  case.  If,  there- 
fore, tiie  articles  expressly  forbid  such  transfer  ;  or  if  they  provide 
for  a  continuance  for  a  time  certain,  or  by  any  other  provisions 
indirectly  negative  the  right  of  transfer,  or  affix  to  it,  as  in  the 
case  of  joint-stock  companies,  certain  conditions  and  requirements, 
which  have  been  disregarded ;  or  if  the   nature   of  the  business, 

(ss)  AlMe  V.  Wright,  17  Ohio,  238.  Bowden,  8  Rich.  9  ;  Armstrong  v.  Fahne- 

{t)  See  Raymond's  Ca.se,  2  Rose,  255  ;  stock,   19  Md.  59  ;  Norris  v.   Vernon,  19 

Kingman  v.  Spurr,  7  Pick.  255  ;  Gilmore  Md.  13. 

V.    Black,     11    Me.    488;     Modilewell    v.  («)  Jones  v.  Parsons,  25  Cal.  100. 

Keever,  8  W.  &  S.  63  ;  Ketcham  v.  Clark,  {ttf)  Moore  v.  Bare,  11  Iowa,  198. 

6  Johns.  144  ;  Manjuand  v.  N.  Y.  Manut'.  («)  See  preceding  notes,  and  Nicoli  v. 

Co.,  17  Johns.  525  ;  Mathewson  v.  Clark,  Mnmford,  4  Johns.   Ch.  522  ;    Rodriguez 

6  How.  122  ;  Horton's  Appeal,  13  Pa.  67  ;  v.  Hetfernan,  5  Johns.  Ch.  417  ;  Ex  parte 

Bray  o.  Fromont,  6  Mod.  5 ;  Wilson  v.  Barrow,  2  Rose,  252. 


§  113.]  RIGHTS    AND    DUTIES   OF   PARTNERS.  139 

the  especial  purpose  of  the  partnership,  the  method  of  transfer,  or 
any  of  the  circumstances  attending  it,  make  it  impossible  for  the 
transfer  to  be  enforced,  —  a  court  of  equity  would  probably  either 
refuse  to  sanction  the  transfer  at  all,  or  would  attach  to  their 
enforcement  of  it  conditions  and  provisions  which  would  prevent 
it  from  working  a  mischief.  Subject  to  these  qualifications,  every 
partner  has,  at  common  law,  an  unquestionable  right  of  divesting 
liimself,  in  good  faith,  of  his  interest  in  the  partnership,  in  favor 
of  a  third  party.  But,  taking  them  into  consideration,  we  think 
it  an  accurate  expression  of  the  rule  to  say  that  no  partner  has  a 
right  to  transfer  the  whole  of  his  interest  in  the  partnership  stock 
to  a  stranger,  unless  he  has  a  right  to  dissolve  the  partnership. 
Indeed,  as  we  shall  sec  in  a  subsequent  chapter,  such  a  transfer 
works  a  dissolution. 

§113.  Right  to  Purchase. —  As  with  sales  so  with  purchases: 
a  purchase  by  one  partner,  in  the  course  and  within  the  scope  of 
the  regular  business  of  the  firm,  binds  the  partnership,  (a)  ^ 


(ct)  The    principle   is  laid   down   in  a  430;  Dougal  v.  Cowles,  5  Day,  515  ;    per 

ease  as  early  as  1696,  Hyat  i?.  Hare,  Comb.  Spencer,  J.,  in  "Walden  v.  Sherburne,  15 

383.     See  Bond  v.  Gibson,  1  Camp.  185  ;  Johns.  422  ;   Braches  v.  Anderson,  14  Mo. 

Dyke   v.    Brewer,   2   C.   &  K.  828  ;    per  441  ;  Dubois's  Appeal,  38  Pa.  231. 
Brainerd,  J.,  in  Mills  v.   Barber,  4  Day, 


1  So  the  purchase  of  the  lease  of  a  brewerj'  by  one  of  a  firm  of  brewers  is  within 
the  scope  of  tlie  business,  and  one  partner  may  bind  the  firm  by  making  it.  Stillmau 
V.  Harvey,  47  Conn.  26. 

But  the  purchase  of  the  interest  of  a  partner  is  not  within  the  scope  of  the  part- 
nership busine>s  ;  and  one  partner  in  making  it  is  not  acting  for  the  firm.  Cassels 
V.  Stewart,  6  App.  Cas.  64  ;  Summerlot  v.  Hamilton,  121  Ind.  87,  22  N.  E.  973. 

Where  one  of  a  firm  of  brokers,  being  the  managing  partner,  agreed  with  a  pur- 
chaser of  bonds  on  behalf  of  the  firm  to  repurchase  the  bonds  at  any  time  for  the 
price  paid,  this  was  held  apparently  within  the  scope  of  the  partnership  business. 
Johnston  v.  Trask,  116  N.  Y.  136,  22  X.  E.  377. 

But  one  partner  cannot  without  consent  of  the  others  accept  in  pa}'ment  of  a  firm 
debt  shares  in  a  company  the  owner  of  which  becomes  liable  as  a  contributoi7. 
Niemann  v.  Niemann,  43  Ch.  D.  198  (C.  A.). 

A  purchase  by  one  partner,  though  in  fraud  of  the  partnership,  binds  the  copart- 
nership, if  made  bond  fide  and  without  gross  negligence  on  the  part  of  the  vendor. 
Bond  V.  Gibson,  1  Camp.  185  ;  Dixon  v.  Alexander,  7  Ired.  4.  See  "Walden  v.  Sher- 
burne, 15  Johns.  422,  423  ;  also,  ante,  §  84,  as  to  the  effect  of  stipulations  between 
partners  which  are  known  to  those  who  deal  with  them.  And  see  Salomons  v.  Xissen, 
2  T.  R.  674  ;  Treadwell  v.  Williams,  9  Bosw.  649  ;  Morrison  v.  Atwell,  9  Bosw.  503. 

So  tlie  partner  may  buy  land  for  the  firm  if  it  is  needed  for  the  firm  business. 
Davis  V.  Cook,  14  Nev.  265. 

But  the  goods  bought  must  be  in  the  line  of  the  firm  business,  unless  the  purchase 
is  ratified.  Porter  v.  Curry,  50  111.  319  ;  Biggs  v.  Huberts,  14  S.  C.  620  ;  Bankhead  v. 
Alloway,  6  Coldw.  56. 

The  firm  is  liable,  though  the  partner  who  bought  goods  on  account  of   the  firm 


140 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIL 


SECTION   II. 


EXTENT    OF    THE   POWER    OF    A    SINGLE    PARTNER. 


§  114.    Foundation     of    the     Power     of    a    Partner.  —  It    is    not 

iiiifrcqueutly  said  tliat  each  pai'tner  is  the  agent  of  all  the  rest, 
and  acts  for  them  by  possessing  their  authority,  (v)  It  is  however 


(y)  Such  is  almost  universally  the 
doctrine  of  the  authorities  upon  the  sub- 
ject. Watson,  the  earliest  writer  upon 
the  Law  of  Partnership,  in  stating  the 
principle  upon  which  one  partner's  acts 
bind  the  rest,  made  use  of  language  which 
has  been  quoted  with  approbation  by  all 
subsequent  text-writers  upon  the  same 
branch  of  law:  "It  may  be  laid  down 
that  partners  are  bound  by  what  is  done 
by  one  another  in  the  course  of  the  part- 
nership business.  Their  liability  under 
contracts  is  commensurate  and  coextensive 
with  their  rights.  Although  the  general 
rule  of  law  is,  that  no  one  is  liable  upon 
an}^  contract  except  such  as  are  privy  to  it, 
yet  this  is  not  contiavened  by  the  liability 
of  ]>artners,  as  they  may  be  imagined  vir- 
tually present  at  and  sanctioning  the  pro- 
ceedings they  singly  enter  into  in  the  course 
of  trade ;  or  as  each  vested  with  a  power 
enabling  them  to  act  at  once  as  principals 
and  as  the  authorized  agents  of  their  co- 
partners." Watson  on  Part.  p.  167.  So 
in  Hawken  v.  Bourne,  8  M.  &  W.  703, 
Parke,  B.,  says  :  "One  partner,  by  virtue 
of  that  relation,  is  constituted  a  general 
agent  for  another,  as  to  all  matters  within 
the  scope  of  the  partnership  dealings,  and 
has  conmiunicated  to  him  by  virtue  of 
that  relation,  all  authorities  necessary  for 
carrying  on  the  partnership,  and  all  such 
as  are  usually  exercised  by  partners  in 
that  business  in  which  they  are  engaged." 
Fox   v.  Clifton,  6  Bing.  792,  per  Tindal, 


C.  J.;  Walden  v.  Sherburne,  15  Johns. 
422  ;  Van  Keuren  v.  Parmelee,  2  N.  Y. 
525  ;  Western  Stage  Company  v.  W^alker, 
2  la.  512.  In  W^inship  v.  Bank  of  the 
United  States,  5  Pet.  561,  Chief  Justice 
Marshall  thus  declares  his  opinion  of  the 
basis  upon  which  the  power  of  one  partner 
rests:  "A  partner,  certainly  the  acting 
partner,  has  power  to  transact  the  whole 
business  of  the  tirm,  whatever  that  may 
be,  and  consequently  to  bind  his  partners 
in  such  transactions  as  entirely  as  himself. 
This  is  a  general  power,  essential  to  the 
well-conducting  of  business,  which  is  im- 
plied in  the  existence  of  a  partnership. 
When,  then,  a  partnership  is  formed  for  a 
particular  purpose,  it  is  understood  to  be 
in  itself  a  grant  of  poiver  to  the  acting 
members  of  the  company  to  transact  its 
business  in  the  usual  way.  If  that  busi- 
ness be  to  buy  and  sell,  then  the  individ- 
ual buys  and  sells  for  the  company,  and 
every  person  with  whom  he  trades  in  the 
way  of  its  business  has  a  right  to  consider 
him  as  the  company,  whoever  may  com- 
pose it.  It  is  usual  to  buy  and  sell  on 
credit  ;  and,  if  it  be  so,  the  partner  who 
purchases  on  credit,  in  the  name  of  the 
firm,  must  bind  the  firm.  This  is  a  gen- 
eral authority  held  out  to  the  world,  to 
which  the  world  has  a  right  to  trust."  In 
Greeley  v.  Wyeth,  10  N.  H.  16,  Parker, 
C.  J.,  says  :  "The  authority  of  a  partner 
is  much  more  extensive  than  that  of  a 
mere  agent." 


afterwards  misapplied  them.     Johnson  i'.  Barry,  95  111.  483  :    Kenney  v.  Altwater,  77 
Pa.  34  ;  Clark  v.  Johnson,  90  Pa.  442. 

Where  it  is  a  well-established  custom  for  one  firm  to  charge  to  the  account  of 
another  goods  furnished  to  a  customer  sent  to  the  former  by  the  latter,  the  managing 
partner  of  a  firm  has  authority  to  charge  it  with  the  price  of  goods  thus  furnished  to 
a  customer  sent  by  the  managing  partner  to  another  firm  to  buy  the  goods.  Cameron 
V.  Blackman,  39  Mich.  108. 


§  115.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  141 

more  exact  to  say  that  the  authority  of  each  partner  rests  on  prop- 
erty quite  as  much  as  on  agency,  and  arises  from  the  nature  and 
purpose  of  the  rehition  of  partners,  and  must  be  found  and  ilhis- 
trated  only  in  and  by  the  law  of  partnership.  This  distinction  is 
material ;  for  some  confusion  and  error  have  arisen  from  deriving 
the  definition  and  extent  of  the  power  too  exclusively  from  the 
law  of  agency.  We  take  the  true  theory  to  be,  that  as  the  com- 
mon law  recognizes  corporations,  as  peculiar  persons,  governed 
by  a  peculiar  but  very  complete  system  of  law,  so  the  law-mer- 
chant, which  is  now  a  part  of  the  common  law,  recognizes  part- 
nerships as  quasi  corporations.  They  are  something  between 
individuals  and  corporations,  and  are  not  governed  altogether  by 
the  laws  applicable  to  either,  but  by  their  own  law.  They  are 
like  individuals,  in  that  the  names  of  the  persons  composing  them 
are  to  be  used  in  court,  whether  they  be  plaintiffs  or  defendants. 
But  even  the  usual  addition,"  copartners  under  the  firm  and  style 
of,"  (fee,  indicates  the  point  wherein  a  partnership  resembles  a 
corporation,  in  being  an  aggregated  body  with  an  appellation 
which  is  proper  to  it,  which  is  indeed  its  mercantile  name,  under 
which  it  does  all  mercantile  business  and  signs  all  mercantile 
papers.  We  do  not  say  that  a  partnership  is  a  person  in  the 
sense  in  which  the  common  law  says  that  a  corporation  is  one. 
But  we  say  it  has  a  peculiar  kind  of  personality,  which  must  be 
understood  and  recognized  if  we  would  understand  and  apply 
aright  the  law  of  partnership.  And  we  consider  the  individual 
partner,  when  conducting  the  affairs  of  the  partnership,  not  so 
much  as  acting  for  himself  because  of  his  own  interest,  and  then 
for  the  rest  by  their  authority,  but  as  acting  for  and  representing 
this  commercial  personality.  For  it  is  one  of  the  principal  rules 
of  the  law  whicli  creates,  defines,  and  governs  this  personality, 
that  every  one  of  those  members  who  together  constitute  it  has 
full  power  to  represent  it  and  act  for  it  in  all  mercantile  transac- 
tions within  the  scope  of  its  business.  And  this  power  in  each 
member  is  coequal  with  the  power  of  every  other  member,  except- 
ing only  such  modification  as  may  be  derived  from  the  articles  of 
agreement  which  gave  existence  and  form  to  this  personality,  or 
some  subsequent  modification  of  them. 

§  115.  General  Extent  of  the  Power  of  a  Partner.  —  While  the 
power  of  one  partner  is  the  same  with  the  power  of  every  other, 
unless  qualified  by  the  articles,  the  power  of  every  partner  —  all 
being  alike  —  may  be  qualified  not  only  by  the  articles,  but  by  the 
nature  and  limitations  of  their  transactions,  or  the  general  usage 
of  merchants,  or  the  especial  usage  of  persons  engaged  in  that 


142 


THE   LAW    OF   PARTNERSHIP. 


[CH.    VII. 


business,  or  even  of  that  very  firm.  For  out  of  all  these  sources 
may  arise  what  might  be  called  implied  stipulations  with  each 
other. 

Hence,  this  power  of  each  partner  to  bind  the  firm  is  not  con- 
fined to  mere  selling  and  buying,  but  extends  over  all  contracts 
or  obligations  or  acts  fairly  within  the  business  of  the  firm,  (w) 
Numerous  and  various  are  the  questions  which  have  arisen  as  to 
the  application  of  this  principle,  as  well  as  the  cases  which 
answer  these  questions. 

§  116.  Power  to  Borrow  and  Pay.  —  The  general  principle  being, 
then,  that  one  partner  may  act  for  his  copartnership  in  all  trans- 

(w)    Anon.,  12  Mod.   446;    Smithy. 
Baily,  11  Mod.  401  ;  v.  Layfield,  1 


Salk.  292,  Holt,  434  ;  De  Tastet  v.  Carroll, 
1  Stark.  88  ;  Swan  v.  Steele,  7  East,  210; 
Sadler  v.  Lee,  6  Beav.  324 ;  Blair  v. 
Bromley,  2  Phillips,  354;  Lacy  t?.  M'Neile, 
4  Dow.  &  R.  7  ;  Winship  v.  Bank  of  the 
United  States,  5  Pet.  529,  661,  5  Mason, 
176  ;  Tapley  v.  Butterfield,  1  Met.  515  ; 
Brown  v.  Lawrence,  5  Conn.  397 ;  Beck 
V.  iMartin,  2  McMullaii,  260  ;  Hawken  v. 
Bourne,  8  M.  &  W.  703;  Hill  v.  Voorhies, 
22  Pa.  68.  And,  if  a  partnership  engages 
in  any  transaction  outside  of  its  regular 
business,  the  acts  and  declarations  of  one 
partner,  with  respect  to  that  transaction, 
bind  the  firm,  as  much  as  though  they 
were  nia<le  with  respect  to  some  matter  ih 
the  course  of  its  ordinary  and  customary 
business.  Sandilands  v.  Marsh,  2  B.  & 
Aid.  673.  See  Ex  parte  Gardom,  15  Ves. 
286.  So  where  the  proprietors  of  several 
mail-coaches  advertised  that  they  would 
not  be  accountable  for  any  parcels  above 
the  value  of  5^.,  except  upon  certain  con- 
ditions, and  A.,  one  of  the  co-proprietors, 
who  kept  the  coach-office,  made  a  special 
agreement  with  the  plaintiff,  with  respect 
to  one  coach,  by  which  those  conditions 
were  dispensed  with,  it  was  held,  that  all 
the  owners  of  the  coaches  in  which  A. 
was  a  partner,  and  by  which  the  plaintiff's 
goods  were  .sent,  were  bound  by  this  spe- 
cial contract.  Helsby  v.  Mears,  5  B.  &  C. 
504,  8  Dow.  &  R.  289.  See  Dwight  v. 
Biewster,  1  Pick.  50. 

These  powers  of  a  partner  exist,  though 
some  of  the  partners  be  secret  or  dormant. 
Winship  v.  Bank  of  the  United  States,  5 
Pet.  529 ;  Swan  v.  Steele,  7  East,  210  ; 
Wiutle    V.    Crowther,    1    Cr.   i  J.   316. 


Though  it  has  been  held,  that,  if  there  be 
actual  fraud  in  the  original  formation  of 
the  partnership,  a  dormant  partner  who 
has  received  none  of  the  funds  will  not  be 
liable  to  creditors  upon  contracts  made  by 
the  ostensible  partners.  Mason  v.  Connell, 
1  Whart.  381 ;  Wood  v.  Connell,  2  Whart. 
542.  Nor  does  it  affect  the  power  of  each 
partner,  that  the  partners  are  trustees,  and 
that  the  joint  business  is  carried  on  for  the 
benefit  of  their  ccstuis  que  trustent.  Thick- 
nesse  v.  Bromilow,  2  Cr,  &  J.  425.  As  to 
the  effect  of  fraud,  see  Dickson  v.  Alexan- 
der, 7  Ired.  4  ;  Emerson  v.  Harmon,  14  Me. 
271;  Bascom  v.  Young,  7  Mo.  1,4;  Steel  v. 
Jennings,  Cheves,  183  ;  M'Kee  v.  Stroup, 
Rice,  291.  See  Halls  r.  Coe,  4  McCord, 
136;  Henderson  v.  Wild,  2  Camp.  561  ; 
Jones  V.  Herbert,  7  Taunt.  421  ;  Arton 
V.  Booth,  4  J.  B.  Moore,  192  ;  Furnival  v. 
Weston,  7  J.  B.  Moore,  356  ;  Bignold  v. 
Waterhouse,  1  M.  &  S.  255  ;  Farrar 
V.  Hutchinson,  9  A.  &  E.  641  ;  Lloyd  v. 
Freshfield,  2  C.  &  P.  325  ;  Barker  v.  Rich- 
ardson, 1  Y.  &  J.  362  ;  Mountstephen  v. 
Biooke,  1  Chitty,  391.  In  Eastman  v. 
Wright,  6  Pick.  323,  Morton,  J.,  said  : 
"In  England,  when  a  nominal  plaintiff, 
or  one  of  several  plaintiffs,  releases  an 
action  in  fraud  of  the  party  in  interest, 
the  court  directly  interfere,  and  set  aside 
the  release.  But  in  this  State  the  courts 
have  never  exercised  that  power.  The  re- 
lease may  be  avoided,  if  fraudulent ;  but 
the  question  of  fraud  can  only  be  tried  liy 
jury."  The  effect  of  stipulations  between 
partners  upon  the  power  of  any  one  or 
more  of  them,  when  those  stipulations  are 
known  to  third  parties,  we  have  already 
considered  See  ante,  §  84.  For  their  effect 
when  unknown,  see  post,  §  160. 


S  116.] 


RIGHTS    AND    DUTIES    OF   PARTNERS. 


143 


actions  fairly  within  tlie  business  of  the  firm,  we  will  cite  the 
authorities  which  appear  to  determine  what  acts  one  partner  in  a 
mercantile  house  may  ordinarily  do.  We  have  already  shown 
that  one  partner  may  buy  and  sell,  and  may  assign  and  transfer, 
by  way  of  either  pledge  or  mortgage,  and  in  trust  or  otherwise,  in 
the  name  of  the  partnership,  (a)  He  may  also  bind  the  firm  by 
borrowing  money,  (aa)  though  he  misapplies  the  money  after  bor- 
rowing it ;  or  by  lending  money,  (b)  He  may  also  make  payment 
for  the  firm  of  the  joint  debts,  (^i)  and  may  compound  them  ;  (c?), 
or  he  may  take  a  release  of  them,  which,  though  made  to  himself 
personally,  and  even  though  providing  that  those  bound  with  him 
shall  not  be  released,  (cc)  will  yet  be  a  complete  discharge  of  the 
whole  firm,  (c?)  But  a  release  to  one  partner,  made  with  refer- 
ence to  a  joint  debt,  to  have  the  effect  of  discharging  the  firm 
must  be  a  technical  one  under  seal,  (e)  Hence  a  covenant  with 
one  partner  not  to  sue  him  will  not  discharge  his  copartners, 


(rt)  See  ante,  §  108. 

(aa)  Rothwell  v.  Humphreys,  1  Esp. 
406;  Thicknesse  v.  Bromilow,  2  Cr.  &  J. 
425,  430,  431  ;  Etheridge  v.  Binney,  9 
Pick.  272  ;  Wbitaker  v.  Brown,  16  Weml. 
505  ;  Church  v.  Sparrow,  5  Wend.  223  ; 
Onondatja  Co.  Bank  v.  De  Puy,  17  Wend. 
47  ;  Winship  v.  Bank  of  the  United 
States,  5  Pet.  529,  5  Mason,  176  ;  Lloyd 
V.  Freshfield,  2  C.  &  P.  325;  Miller  v. 
Manice,  6  Hill,  119  ;  Steel  v.  Jennings, 
Cheves,  183  ;  Emeison  v.  Harmon,  14 
Me.  271  ;  Bascom  v.  Young,  7  ilo.  4 ; 
Hunt  V.  Hall,  8  Ind.  215;  Hutchins  v. 
Hudson,  8  Humph.  426  ;  Hogan  v.  Rey- 
nolds, 8  Ala.  59  ;  Saltinai.sh  v.  Bower,  22 
Ala.  221  ;  [Gilchrist  v.  Brande,  58  Wis. 
184,  15  N.  W.  818.  And  he  may  agree 
upon  security  for  the  loan.  Hopkins  v. 
Thomas,  61  "Mich.  389,  28  N.  W.  147.] 
If  one  partner  authorizes  another  to  pro- 
cure an  indorser  on  a  note  to  be  offered 
for  discount,  he  authorizes  him  to  mort- 
gage all  the  stock  in  trade  to  secure  the 
indorser,  Patterson  i>.  Maughan,  39  U.  C. 
Q.  B.  371  ;  and,  generally,  such  acts  as 
may  be  reasonably  necessary  to  accomplish 
the  authorized  act.  Halpenny  v.  Pennock, 
33  U.  C.  Q.  B.  229. 

(b)  Alexander  v.  Barker,  2  Cr.  &  J. 
133. 

(bb)  Innes  v.  Stephenson,  1  Moody  & 
R.  145;    Tyson   v.   Pollock,  1   Barr,  375; 


Cheap  V.  Cramond,  4  B.  &  Aid.  663; 
Averell  v.  Lyman,  18  Pick.  351.  See 
Campbell  v.  Mathews,  6  Wend.  551; 
[Hardy  v.  Norfolk  .Mfg.  Co.,  80  Va.  403. 

In  Stout  V.  Ennis  Nat.  Bank,  69  Tex. 
384,  8  S.  W.  808,  the  court  suggested 
that  payment  of  a  firm  debt  by  a  single 
partner  might  be  valid,  even  if  the  other 
objected  to  the  payment,  to  the  creditor's 
knowledge.] 

(c)  Doremus  i-.  McCormick,  7  Gill,  49 
65.     See  Ex  parte  Slater,  6  Ves.  146. 

(cc)  See  Everard  ?;.  Heme,  Litt.  191  ; 
Cocks  I'.  Nash,  9  Bing.  341. 

(d)  Hammon  v.  Roll,  March,  202  ; 
Nt'dliam's  Case,  8  Co.  136 ;  Bower  v. 
Twadlin,  1  Atk.  294  ;  Co.  Litt.  232,  a ; 
Collins  V.  Prosser,  1  B.  &  C.  682  ;  Tuck- 
erman  v.  Xewhall,  17  Mass.  581  ;  Amer- 
ican Bank  r.  Doolittle,  14  Pick.  126; 
Wiggin  V.  Tudor,  23  Pick.  444;  United 
States  V.  Thompson,  Gilpin,  614  ;  Bursou 
V.  Kincaid,  3-  Pen.  &  W.  57  ;  Willings  v. 
Consequa,  Pet.  C.  C.  301,  307  ;  Brown  v. 
Marsh,  7  Vt.  327  ;  Gray  v.  Brown,  22 
Ala.  262. 

(fl)  Shotwell  I'.  Miller,  Coxe,  181  ; 
Shaw  V.  Pratt,  22  Pick.  305  ;  Walker  v. 
McCulloch,  4  Me.  421  ;  Harrison  r.  Clare, 
2  .Tohns.  449  ;  Rowley  v.  Stoddard,  7 
Johns.  207  ;  De  Zeug  v.  Bailey,  9  Wend. 
336  ;  Catskill  Bank  v.  Messenger,  9  Cow. 
37  ;   Lunt  v.  Stevens,  24  Me.  534. 


144 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


since  such  an  agreement  of  itself  evinces  an  intention  on  the  part 
of  the  partnership  creditor  to  avoid  the  effects  of  a  technical 
release  to  one  of  the  firm.  (/)  ^ 

§  117.  Power  to  receive  Payment.  —  One  partner  may  also 
receive  payment  of  the  debts  due  the  partnership  ;  (^)  he  may 
compromise  them  ;  (h)  or  he  may  release  them,  and  this  even  by 
deed.'-^  But  though  a  partner  may  release  a  joint  debt  in  his  own 
name  only,  a  covenant  by  him  personally,  not  to  sue  a  deljtor  of 
the  partnership,  does  not  amount  to  a  release  of  the  debt,  nor 
prevent  the  firm  from  bringing  an  action  for  it  in  the  names  of 
all  the  partners.     In  such  case,  the  remedy  of  the   partnership 


(/)  Hutton  V.  Eyre,  6  Taunt.  289 ; 
Bank  of  Chenango  v.  Osgood,  4  Wend. 
607  ;  Dran  v.  Newhall,  8  T.  R.  168 ; 
Couch  V.  Mills,  21  Wend.  424  ;  Chandler 
V.  Herrick,  19  Johns.  129  ;  Goodnow  v. 
Smith,  18  Pick.  416  ;  Shed  v.  Pierce,  17 
Mass.  623 ;  McLellaii  v.  Cumberland 
Bank,  24  Me.  566  ;  Mason  v.  Jouett,  2 
Dana,  107  ;  Hosack  v.  Rogers,  8  Paige, 
229.  And  even  a  release  under  seal  to 
one  partner,  may,  it  seems,  be  accom- 
panied with  such  provisos  and  conditions 
as  to  confine  its  operation  to  that  one 
partner  alone,  and  prevent  it  from  dis- 
charging the  firm.  Solly  v.  Forbes,  4 
Moore,  448  ;  2  Br.  &  B.  .38.  See  the  lan- 
guage of  Shaw,  C.  J.,  in  Wiggin  v.  Tudor, 
23  Pick.  444,  445. 

Upon  the  same  principle,  if  two  are 
arrested  on  a  joint  ca.  sa.  for  the  amount 
of  the  damages  obtained  against  them  in 
an  action  of  trespass,  and  the  i)laintiff 
discharges  one  of  them  upon  his  giv- 
ing him  his  promissory  note,  this  dis- 
charge of  one  operates  as  a  release  of  both 
the  defendants.  Ballam  v.  Price,  2  J.  B. 
Moore,  235.     See  Foster  v.  Jackson,  Hob. 


59.  In  like  manner,  if  one  of  two  joint 
debtors,  who  is  in  execution,  obtains  his 
discharge  from  the  creditor,  the  del)t  is 
thereby  satisfied  as  to  the  other  debtor 
also.  Clark  v.  Clement,  6  T.R.  625;  Gould 
V.  Gould,  4  N.  H.  173  ;  Abel  v.  Forgue, 
1  Root,  502. 

((/)  Anon.,  12  Mod.  447  ;  Duff  v.  The 
East  India  Company,  15  Ves.  198  ;  Tom- 
lin  V.  Lawrence,  3  Moore  &  P.  555;  M'Kee 
V.  Stroup,  Rose,  291  ;  Gregg  v.  James,  1 
III.  (Breese)  107  ;  Yandes  v.  Lefavour,  2 
Blackf.  371  ;  Allen  v.  Farrington,  2 
Sneed,  526  ;  Porter  v.  Taylor,  6  Moore  & 
S.  156  ;  King  v.  Smith,  4  C.  &  P.  108  ; 
Brasier  v.  Hudson,  9  Sim.  1.  See  Hen- 
derson V.  Wild,  2  Camp.  561  ;  Pritchard 
V.  Draper,  1  Rus.  &  JVi  191  ;  Jacaud  v. 
French,  12  East,  317. 

(/()  Pierson  v  Hooker,  3  Johns.  70; 
Cunningham  v.  Littlefield,  1  Edw.  Ch. 
104;  Doremus  v.  McCormick,  7  Gill,  49, 
65.  [See  Levick's  Appeal,  (Pa.)  2  Atl. 
532.  But  he  cannot  accept  on  satisfaction 
shares  in  a  company  the  owner  of  which 
is  liable  as  a  contributory.  Niemann  v. 
Niemann,   43  Ch.  D.  198  (C.  A.).] 


^  A  release  of  one  partner  is  valid  and  releases  the  firm.  Ex  parte  Slater,  6  Ves. 
146;  Elliott  v.  Holbrook,  33  Ala.  659;  Williamson  v.  McGinnis,  11  B.  Mon.  74;  Chase 
V.  Bean,  58  N.  H.  183.  But  a  mere  covenant  not  to  sue  one  partner  will  not  be  effectual 
as  a  release  of  all.  Roberts  v.  Strang,  38  Ala.  566  ;  Hosack  v.  Rogers,  8  Paige,  229,  237. 
And  if  the  intention  was  not  to  release  the  firm,  even  a  sealed  release  of  one  partner 
will  be  construed  as  a  covenant  not  to  sue.  Willis  v.  De  Castro,  4C.  B.  N.  s.  216  (of  a 
joint  debt);  Northern  Co.  v.  Potter,  63  Cal.  157  ;  Parmelee  v.  Lawrence,  44  111.  405  ; 
Gardner  ?7.  Baker,  25  la.  343  ;  Greenwald  v.  Raster,  86  Pa.  45  ;  Williams  v.  Hitchings, 
10  Lea,  326.  Supra,  note  (/).  This  will  be  the  case  a  fortiori  where  the  release  was 
not  sealed.  Ex  parte  Good,  5  Ch.  D.  46  ;  McAllester  v.  Sprague,  34  Me.  296  :  Burke 
V.  Noble,  48  Pa.  168.     Supra,  note  [e).     See  Ames,  Cas.  on  Part.,  606  n. 

2  See  post,  §  123. 


§  118.] 


RIGHTS   AND    DUTIES    OF   PARTNERS. 


145 


debtor  is  against  the  covenanting  partner,  for  the  breach  of 
covenant.  (/  ) 

§  118.  Power  to  conduct  Legal  Proceedings. — One  partner  has 
power  to  represent  and  to  act  for  the  firm  in  legal  proceedings. 
Thus,  one  partner  may,  for  himself  and  his  copartner,  sign  a  note 
for  the  weekly  payment  under  the  Lords'  Act.  (^k)  So,  if  two 
partners  commence  an  action,  one  may  release  the  subject-matter 
of  it,  which  release  will  be  binding  upon  his  copartner,  and  ope- 
rate as  a  bar  to  the  action.  (Z)  Upon  the  same  principle,  one 
partner  may  suspend  proceedings  in  an  action  by  the  firm  (w). 
[So  in  an  action  against  the  firm,  one  partner  may  enter  an 
appearance  for  the  rest.  (?i)  It  seems  however,  that  service  of 
process  should  be  made  on  each  partner  personally,  (o)] 

As  in  legal  proceedings  generally,  so  in  those  under  the 
Bankrupt  Laws,  the  act  of  one  partner  is  the  act  of  his  partner- 
ship.    Thus,  to  sustain  a  fiat,  one  partner  may  make  affidavit 


(j)  Walinsley  v.  Cooper,  3  Ter.  &  D. 
149. 

{k}  Meux  V.  Hiunphrey,  8  T.  R.  25; 
Burton  v.  Issitt,  5  B.  &  Aid.  267. 

{I)  Barker  v.  Richardson,  1  Yoiinge  & 
J.  362  ;  Arton  v.  Bootli,  4  J.  B.  Moore, 
192 ;  Furnival  v.  Weston,  7  J.  B.  Moore, 
356 ;  Jones  v.  H(!rbert,  7  Taunt.  421  ; 
Wilson  V.  Mower,  5  Mass.  411.  So,  if  a 
bill  is  drawn  by  a  firm,  and  one  of  the 
]iartners  agrees  with  the  acceptor  to  pro- 


250.  See,  however,  contra.  Haslet  v. 
Street,  2  McCord,  310;  Loomis  v.  Pierson, 
Harp.  470  ;  Hills  v.  Ross,  3  Dallas,  331, 
note  ;  Bright  v.  Sampson,  20  Tex.  21.  A 
different  question  arises  after  dissolution. 
Hall  v.  banning,  91  U.  S.  160,  holds  that 
one  partner  after  dissolution  has  no 
authority  to  enter  an  appearance  for 
the  firm,  in  a  suit  against  it ;  and  a  judg- 
ment founded  on  such  an  appearance 
is  void,    in  case   the   other    members  re- 


vide  for  it  when  due,  this  operates  as  a  sided  out  of  the  State.    A  fortiori  such  a 

release  to  the  acceptor  of  any  action  that  judgment   would    be   void,    if    the   other 

might  have  been   brought  upon  the  bill,  partners    could    be    reached    by   process, 

notwithstanding  any  fraud  on  the  part  of  See  ace.  Atchison   Savings  Bank  v.  Tem- 

the  single  partner  as  against  his  copart-  plar,  26  F.  R.  580.] 


ners.  Riclnnoiul  v.  Heapy,  1  Stark.  202  ; 
Johnson  v.  Peck,  3  Staik.  66  ;  Siiarrow  v. 
Chisman,  9  B.  &  C.  241. 

(m)   Harwood  v.  Edwards,  cited  in  Gow 
on  Part.    65.     See  Loring  v.  Brackett,   3 


(o)  Moredou  V.  Wyer,  6  M.  &  G.  278, 
and  note  ;  Demoss  v.  Brewster,  4  S.  &  il. 
661.  See  Bennett  v.  Stickney,  17  Vt. 
531 ;  Phelps  v.  Brewer,  9  Gush.  390.  In 
equity,  however,  where  one  of  two  part- 


Pick.  403.     Hence,  if  for  a  previous  debt  ners  was  abroad,  service  of  sub]ioena  upon 

one  partner  draw  a  bill  upon  a  debtor  of  the    other   partner  has    been    held   good 

the  firm,  which  is  accepted  by  him,  and  service  upon  both.     Carrington  v.  Cantil- 

is  taken  by  the  partner  in  payment,  this  Ion,  Bunb.  107;  Coles  f.  Gurney,  1  Madd. 

is  giving  time  to  the  debtor,  though  the  187.     And  in  Lansing  v.  M'Killup,  7  Cow. 

bill  was  drawn  in  that  one  partner's  name  416,  service  of  declaration  upon  one  of  a 

alone  ;  and  the  debtor  cannot  be  sued  for  firm   of   attorneys,    whose  name   did  not 

the  amount  of  the  debt  till  the  bill   has  appear  on  the  record  as  attorney  for  the 


arrived  at  maturity  and   been  dishonored. 
Tomlin  v.  Lawrence,  3  Moore  &  P.  585. 

(h)  D.  arguendo,  Harrison  v.  Jackson, 
7  T.  P.  208  ;  Bennett  v.  Stickney,  17  Vt. 
531  ;    Taylor  v.  Coryell,  12   S.  &   R.  243, 


defendant,  the  business  of  the  firm  being 
done  in  the  name  of  the  other  partner, 
was  yet  held  good  and  regular  service. 
Alexander  v.  Stern,  41  Tex.  193.  See 
contra,  Young  v.  Goodson,  2  Russ.  255. 


10 


146  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

of  debt,  and  execute  the  usual  bond,  (p)  Pie  may  "  prove  a 
debt,  vote  in  the  choice  of  assignees,  and  sign  the  certificate," 
in  behalf  of  the  firm,  (q^  He  may,  by  power  of  attorney, 
authorize  some  third  person  to  vote  in  the  choice  of  assignees, 
and  to  sign  the  certificate,  etc.,  for  the  partnership,  (r)  He  may 
sign  a  petition  presented  for  a  hearing,  (.s-)  And  he  may  bind 
the  firm  in  all  other  proceedings  in  bankruptcy,  except  in  the 
case  of  a  i)etition  for  a  fiat,  in  which  all  the  partners  must 
join.  (0 

§  119.  Miscellaneous  Powers  of  a  Partner.  —  One  partner  may 
also  bind  the  firm  by  effecting  insurances  upon  the  joint  prop- 
erty, though  a  part-owner  has  no  such  implied  authority,  (m) 
One  partner  may  also,  in  the  course  of  the  joint  business,  take  a 
guaranty,  which,  if  so  intended,  shall  iimre  to  the  benefit  of  the 
firm.(y) 

[  One  partner  may  acknowledge  a  deed  for  the  firm  ;  ^  may 
waive  demand  and  notice  on  a  firm  note  ;^  may  represent  the 
firm  at  a  meeting  of  a  corporation  in  which  the  firm  is  a  stock- 
holder, may  vote  at  the  meeting,  and  may  waive  notice  of  the 
meeting ;  '^  and  may  sign  in  the  name  and  on  behalf  of  the  firm 
a  petition  for  a  statutory  lien.  ^  ] 

One  partner  has  also  power  to  appoint  an  agent  to  transact 
the  joint  business,  and  to  bind  the  partnership  by  his  acts  rela- 
tive  thereto,  {w)      So   also,   where   a   partnersliip    is    by   name 

(p)  Ex  parte  Hodgkinson,  19  Ves.  291  ;  B.  L.  vol.  2,  p.  5.   See  Pierce  v.  Stockwell, 

2  Rose,  174  ;  Ex  parte  Peele,  Buck,  457.  11  Ciish.  236. 

iq)  Fer  Lovd  E\don  in  Ex  parte  Hodg-  {u)  Hooper   v.   Lusby,   4  Camp.    6*5, 

kinson,  19  Ves.  293  ;  Ex  parte  Mitchell,  [Hillock  v.   Traders'  Ins.   Co.,  54   Mich. 

14  Ves.  597  ;  Ex  parte  Shaw,  1  Olyn  &  J.  531  ;    Osgood    v.    Glover,    7    Daly,    3t57.] 

129  ;  Ex  parte  Bank,  2  Glyn  &  J.  3fi3  ;  Ex  See  Irving  v.   Excelsior  Fire  Ins.  Co.,   1 

parte  Hall,  1  Rose,  2  ;  Ex  parte  Bignold,  2  Bosw.  507  ;  Graves  v.  Boston  Marine  In?;. 

Mont.  &  A.  655.  Co.,    2    Cranch,    419  ;   Foster   v.    United 

(r)  Ex  parte   Mitchell,    14   Ves.  597;  States  Ins.  Co.,  11  Pick.  85. 
Ex  parte  Shaw,  1  Glyn  &  J.  129.  {v)  Garrett  v.  Handley,  4  B.  &  C.  664  ; 

(.f)  See  Ex  parte' Morgan,   Buck,  109  ;  Walton  v.  Dodson,  3  C.  &  P.  162. 
Ex  parte  Cox,  1  Glyn  &  J.  355,  note  ;  Ex  (tv)  Tillier    v.    Whitehead,    1    Dallas, 

parte  Fife,  2  Mont.  &  A.  577.  269  ;  Lucas  v.  Bank  of  Dari^n,  2  Stewart, 

(t)   Buckland   v.   Newsame,    1    Taunt.  280,  297;  Coons  c.  Reniek,  11  Tex.  134. 

477  ;•  Ex  parte  Peele,  Buck,   457  ;    Arch.  See  Eobinson  v.  Hotnian,  4  Bing.  562. 

1  Citizens'  Nat.  Bank  v.  Johnson,  79  la.  290,  44  N.  W.  551  ;  Sloan  v.  Machine  Co., 
70  Mo.  206. 

2  Seldner  v.  Mount  Jackson  Nat.  Bank,  66  Md.  488,  8  Atl.  262.  But  he  may  not 
waive  the  benefit  of  the  exemption  laws  so  as  to  bind  his  partner.  Terrell  v.  Hurst,  76 
Ala.  588  ;  Reed  Lumber  Co.  v.  Lewis,  94  Ala.  626,  10  So.  333. 

3  Kenton  Furnace  R.  R.  &  MTg  Co.  v.  McAlpin,  5  F.  R.  737. 
*  Garland  v.  Hickey,  75  Wis.  178,  43  N.  W.  832. 


§  l^lj 


RIGHTS    AND    DUTIES   OF   PARTNERS. 


147 


empowered  to  act  for  a  third  party,  one  partner  may  execute 
the  agency  so  as  to  bind  the  principal,  (x)  But  from  a  general 
power  of  attorney  granted  to  one  of  two  partners  the  other  can 
derive  no  authority,  (xx) 

§  120.  Limitation  of  Power  by  Usage.  — This  principle  is  gen 
erally  subject  to  the  further  limitations  of  usage,  although  the 
general  usage  of  merchants  would  impose  very  little  other  restric- 
tion than  that  already  implied  by  the  requirement  that  these 
acts  should  always  be  within  the  regular  business  of  the  firm,  (/y) 
And  if  a  contract  be  made  by  one  partner  in  the  name  of  the 
firm  with  a  stranger,  if  the  transaction  is  foreign  to  the  usual 
course  of  dealing  with  the  firm,  this  circumstance  lays  on  the 
stranger  the  duty  and  responsibility  of  inquiring  and  ascertain- 
ing whether  the  partner  has  the  authority  of  the  firm.  (^?/) 

§  121.  Power  to  Submit  to  Arbitration.  —  A  seeming  exception 
exists  in  relation  to  arbitration ;  lor,  while  a  copartner  may 
create  a  debt,  or  pay  a  debt,  or  compromise  a  debt,  or,  in  good 
faith,  deal  with  it  in  any  other  way,  the  one  thing  which  it  is 
said  he  cannot  so  do  as  to  bind  his  copartners  is  to  submit  the 
debt  to  arbitration.  (2)      Of  the  reasons  given  for  this,  one,  that 


{x)  Gordon  v.  Buchanan,  5  Yerger,  71, 
82  ;  Beck  v.  Martin,  2  McMuUan,  260  ; 
Kennebec  Co.  v.  Augusta  Ins.  &  Bank  Co., 
6  Gray,  204. 

(xx)   Edmiston  v.  Wright,  1  Camp  .88. 

(y)  Anon.,  2  Ca.  Ch.  38,  16  Vin.  Ab. 
242  ;  Ex  parte  Agace,  2  Cox,  312  ;  Living- 
ston V.  Roosevelt,  4  Johns.  251  ;  Lawrence 
V.  Dale,  3  Johns.  Ch.  23,  17  Johns.  427  ; 
Rogers  v.  Batchelor,  12  Pet.  221  ;  East- 
man V.  Cooper,  15  Pick.  276  ;  Marsh  v. 
Gold,  2  Pick.  285  ;  Nichols  v.  Huglies,  2 
Bailey,  109  ;  Thomas  v.  Harding,  8  Me. 
417  ;  Walcolt  v.  Canfield,  3  Conn.  198  ; 
Wagnon  v.  Clay,  1  A.  K.  Marsh.  257  ; 
Goode  V.  Linecurn,  1  How.  (Miss.)  281  ; 
Goodman  v.  Wliite,  25  Miss.  163.  The 
giving  of  guarantees  for  the  debts  of  third 
parties  is  not  a  part  of  the  regular  course 
of  business  of  an  ordinary  mercantile 
house,  and  is  not,  therefore,  within  the 
power  of  one  partner.  See  po.if,  §  144. 
Nor  is  the  receiving  of  notes  for  other 
persons,  and  undertaking  to  collect  them. 
Hogan  I'.  Reynolds,  8  Ala.  59.  And, 
though  every  partner  has  an  implied 
authority  to  borrow  money  generally,  he 
is  not  thereby  necessarily  empowered  to 


bind  the  firm  by  a  loan  of  money  for  the 
purpose  of  increasing  the  fixed  capital  of 
the  concern.  Fisher  v.  Tayler,  2  Hare, 
218.  See  Greenslade  v.  Dower,  7  B.  k  C. 
635.  A  partner  cannot  bind  his  copart- 
ners, by  a  banking  account  opened  by  him 
in  his  own  name  in  behalf  of  the  firm. 
Alliance  Bank  v.  Keaseley,  L.  R.  6  C.  P. 
433.  So,  notwithstanding  the  power  of 
disposal  which  each  partner  possesses  with 
respect  to  the  joint  property,  he  cannot 
give  it  away.  Ante,  §  90.  Finally,  the 
manner  in  which  a  particular  firm  has  been 
in  the  habit  of  managing  its  business  may 
greatly  var}'  and  enlarge  the  power  which, 
under  ordinary  circumstances,  that  par- 
ticular trade  would  confer  upon  one  [lart- 
ner.  See  "Woodward  v.  Winship,  12  Pick. 
430. 

(yy)  Cadwallader  v.  Kroesen,  22  Md. 
204. 

(z)  And  this  continues  true,  whether 
the  submission  be  under  seal  or  not.  Stead 
V.  Salt,  3  Bing.  101.  But  see  Hallack  r. 
i\rarch,  25  111.  48,  and  ca-ses  there  cited. 
A  firm  of  five  members  declared  against 
the  defendant  for  work,  labor,  materials, 
&c.      The  defendant  pleaded  the  general 


148 


THE   LAW    OF   PARTNERSHIP. 


[CH.    VII. 


submission  to  arbitration  is  no  mercantile  transaction,  and  could 
not  have  entered  into  the  minds  of  the  partners  when  entering 
into  partnership,  seems  to  us  to  beg  the  question,  and  to  be  a  very 
feeble  reason ;  (22)  and  another,  that  it  may  compel  the  part- 
ners, by  force  of  the  award,  to  do  things  never  contemplated  by 
them,  and  in  no  sense  mercantile,  seems  to  have  little  more 
force,  (a)  The  true  reason  may  be,  that  the  law,  while  it 
favoi-s  arbitration  in  many  respects  and  ways,  on  the  other  hand 
is  jealous  of  it.     The  courts  are,  or  until  a  very  recent  period  (6) 


issue,  and  put  in  an  award  upon  the  matter 
touching  which  the  action  had  been 
biought.  The  articles  containing  the  sub- 
niis.sion,  however,  were  signed  bj'  only 
three  of  the  partners.  It  was  held  that 
the  submission  was  insufficient,  and  could 
not  bind  the  firm.  Hambidge  i\  De  La 
Crouee,  3  C.  B.  744,  745.  In  Adams  v. 
Bankart,  1  Cr.,  U.  &  R.  685,  Lord  Abinger, 
C.  B.,  said  :  "I  think  we  have  sufficient 
authority  for  saying,  that  one  partner 
cannot  bind  another  by  a  submission  to 
arbitration,  without  the  assent  of  the 
latter."  Karthaus  v.  Ferrer,  1  Pet.  228; 
Hall  V.  Lanning,  91  U.  S.  160  ;  Martin  v. 
Thrasher,  40  Vt  460  ;  Gibson,  C.  J.,  in 
Harper  v.  Fox,  7  W.  &  S.  143  ;  Buchanan 
V.  Curry,  19  Johns.  137  ;  Harrington  v. 
Higham,  13  Barb.  660  ;  Buchoz  v.  Grand- 
jean,  1  Mich.  367  :  Wood  v.  Shep- 
herd, 2  Pat.  &  H.  442  ;  Jones  v. 
Bailey,  5  Cal.  345.  See  Boyd  v.  Emer- 
son, 2  A.  &  E.  184  ;  Skillings  v.  Coolidgc, 
14  Mass.  43,  45  ;  Martin  r.  Thrasher,  20 
Vt.  460.  [Thomas  v.  Atherton,  10  Ch.  D. 
185  (C.  A.)  ;  Fancher  v.  Bibb  Furnace 
Co.,  80  Ala.  481,  2  So.  268;  Walker  v. 
Bean,  34  Minn.  427,  26  K  W.  232; 
Tillinghast  v.  Gilmore,  (R.  I.)  22  Atl. 
942.  If  authorized  by  the  other  partners, 
one  partner  may  make  a  binding  contract 
to  submit  to  arbitration.  Davis  v.  Berger, 
54  Mich.  652,  20  X.  W.  629.]  Respect- 
ing the  mode  of  showing  the  authority  of 
one  partner  to  bind  his  firm  by  a  submis- 
sion, Lord  Abinger,  C.  B.,  said,  in  Adams 
V.  Bankart,  supra :  "  I  do  not  mean  to 
say  tliat  such  assent  must  be  given  in  any 
particular  form  of  words,  or  that  it  re- 
quires to  be  under  the  hand  of  the  copart- 
ner: all  that  is  necessary  is,  that  there 
should  be  some  evidence  of  an  actual 
authority  conferred."     And  Parke,  B.,  in 


the  same  case:  "I  am  entirely  of  the 
same  opinion.  The  authority  to  bind  a 
partner  to  submit  to  arbitration  does  not 
flow  from  the  relation  of  partnership  ;  and, 
where  it  is  relied  upon,  it  must,  like 
every  authority,  be  proved  either  by 
express  evidence,  or  by  such  circumstances 
as  lead  to  the  jiresumption  of  such  an 
authority  having  been  conferred." 

When  a  submission  is  made  of  all 
matters  of  difference  between  an  indivi- 
dual and  a  partnership,  it  includes  only 
such  matters  as  are  in  dispute  between 
that  individual  and  the  partnership 
jointly,  and  not  those  in  dispute  between 
that  individual  and  one  or  more  of  the 
partners  severally.  Garland  v.  Noble,  1 
J.  B.  Moore,   187. 

(zz)  Stead  v.  Salt,  3  Bing.  103  ;  Adams 
V.  Bankart,  1  Cr.,  M.  &  R    681. 

(ii)  In  Boyd  v.  Emerson,  2  A.  &  E.  184, 
one  question  raised  was,  whether  one  part- 
ner could  bind  his  copartners  by  a  parol 
submission  to  arbitration.  The  court  did 
not  tliink  it  necessary  to  decide  the  point. 
The  argument  of  counsel,  however,  in 
favor  of  this  power  in  one  partner  is 
worthy  of  attention. 

{b)  See  for  cases  questioning,  and  to 
some  extent  overruling,  the  ancient  prin- 
ciple, that  the  courts  will  not  enforce  an 
agreement  to  refer,  Scott  v.  Avery,  8  Exch. 
487,  497,  5  H.  L.  C.  811  ;  Livingstone  u. 
Ralli,  5  E.  &  B.  132  ;  Horton  v.  Soyer,  4 
H.  &  X.  643  ;  Russell  v.  Pellegrini,  6 
E.  &  B.  1020.  See  also  Cobb  i-.  New 
England  Mut.  M.  Ins.  Co.,  6  Gray,  192, 
204.  An  English  statute,  17  &  18  Vict. 
c.  125,  §  11,  provides,  that  when  there  is 
such  an  agreement,  and  an  action  is 
brought  in  violation  of  it,  the  court  may 
grant  a  rule  to  stay  proceedings,  at  the 
request  of  the  defendants.    See  j^ost,  §  170. 


§  122.]  RIGHTS    AND    DUTIES   OP   PARTNERS.  149 

have  been,  unwilling  to  enforce  or  sanction  an  agreement  by 
which  parties  are  compellable  to  renounce  the  perfectly  impartial 
and  well-constituted  tribunal  which  is  open  to  all  the  public,  for 
one  which  the  parties  construct  themselves,  and  which  is  open 
to  very  many  possibilities  of  error,  (c) 

Hence  both  law  and  equity  have  refused  to  permit  a  partner  so 
to  bind  himself  and  his  copartners  by  an  agreement  to  submit  a 
question  as  to  oust  them  of  their  jurisdiction.  But  if  a  partner 
made  such  a  submission,  and  it  was  followed  by  an  award,  and 
the  award  and  submission  were  honest  and  reasonable,  and  the 
partner  thereon  agreed  that  his  firm  should  do  the  thing  awarded, 
this  might  now  be  held,  in  equity  at  least,  as  obligatory  on  the 
partnership.  (fZ) 

Indeed,  if  all  the  partners  agreed  to  submit  a  question  to 
referees,  and  then  refused  to  perform  their  promise,  this  promise, 
made  by  the  whole,  might  not  only  be  enforced  by  decree  for 
specific  performance,  but  it  would  be  a  good  contract  at  law,  as  all 
such  agreements  to  refer  are,  and  the  party  refusing  might  be  sued 
for  his  breach  of  promise,  (g)  And  in  some  of  our  States,  the 
power  of  a  partner  to  bind  the  partnership,  by  his  unsealed  agree- 
ment to  refer  a  question  in  which  the  partnership  was  interested, 
has  been  held  as  matter  of  law.  (/) 

§  122.  Power  to  Affix  a  Seal.  — The  contracts  of  a  firm  should 
be  unsealed ;  for,  on  this  point,  the  common  law  certainly  con- 
trols the  law  of  partnership.  No  partnership  has  a  seal,  and  no 
partner  can  affix  the  seals  of  his  copartners,  or  of  any  of  them, 
without  their  express  authority.  While  this  seems  to  be  a 
settled  rule,  there  has  been  a  great  extent  and  some  variety  of 
adjudication  in  regard  to  it,  as  we  show  in  the  note.  (^)     Per- 

((•)  Harrington    v.   Higham,   13  Barb,  ford  v.   Green,  2  Mod.   228  ;  JIcBride  v. 

660.  Hagan,  1  Wend.  326,   336  ;  Buchanan  v. 

{d)  Buchanan  y.  Curry,  19  Johns,  137.  Currj-,   19   Johns.    137,    143;    Armstrong 

(g)  So,  if  one  member  of  a  firm  enter  v.   Robinson,  5  G.  &  J.  412,  422;  "Wood 

into  a  submission  in  behalf  of  himself  and  v.  Shepherd,  2    Pat.    &  H.  442  ;    Jones  v. 

his  partners,  and  undertake  that  the  copart-  Bailey,   5  Cal.  345. 

nership  shall  perform  the  award,  the  acting  (/")  Southard  v.  Steele,  3  B.  Jlon.  435  ; 
]iartner  is  bound,  though  the  firm  is  not;  Taylor  v.  Coryell,  12  S.  &  R.  243  ;  Wilcox 
and  a  refusal  by  his  copartners  to  be  bound  v.  Singletary,  Wiight,  420  ;  [Gay  v.  Wait- 
by  the  arbitration  will  be  a  breach  of  that  man,  89  Pa.  453.] 

partner's  promise,    for  which  he  may  be  {q)  For  authorities  against  the  power  of 

held  liable  in   damages.     Thus,   in  Com.  a  partner  to  bind  his  firm   by  a  seal,  see 

Dig.    "  Arbitrament"  (D.   2),   it  is   said:  Thomason  y.  Frere,  10  East,  418;  Metcalfe 

"If  there  be  a  controversy  between  A.  of  v.  Rycroft,  6  M.  &  S.    75  ;  Hall  v.  Bain- 

the  one  part,  and  B.  and  C.  of  the  other,  bridge,  1  M.  &  G.  42  ;  McKee  v.  Bank  of 

and  B.  submits  for  himself  and  C,   and  Mt.  Pleasant,  7  Ohio,   175  ;  McNaughten 

there  be  an  award  that  B.  shall  pay;  this  v.   Partridge,    11    Ohio,    223;  Trimble   v. 

is  good,  though  C.  be  a  stranger."    Strang-  Coons,  2  A.  K.  Marsh.  375  ;  Southard  v. 


150 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII, 


haps  the  old  technical  rule,  that  the  authority  to  seal  must  be  by 
seal,  (70  would  not  be  strictly  applied  ;  but,  generally,  at  least 
authority  there  must  be.  (/) 


Steele,  3  T.  B.  Mon.  435;  Gerard  v.  Basse, 
1  Dall.  119  ;  Hart  v.  Withers,  1  Barr, 
285  ;  Green  v.  Beals,  2  Gaines,  254  ;  Clem- 
ent V.  Brush,  3  Johns.  Gas.  180  ;  Skinner 
V.  Dayton,  19  Johns.  513  ;  Mills  v.  Barber, 

4  Day,  428  ;  Garland  v.  Davidson,  3 
Jklunf.  189  ;  Tuttle  v.  Eskridge,  2  Munf. 
330  ;  Shelton  v.  Pollock,  1  Hen.  &  M. 
422 ;  Posey  v.  Bullitt,  1  Blackf.  99  ; 
Fisher  v.  Tucker,  1  McCord  Ch.  169  ; 
Nunuely  v.  Doherty,  1  Yerg.  26  ;  Black- 
burn V.  McCallister,  Peck,  371  ;  Anon., 
Taylor,  113  ;  Anon.,  2  Hayw.  99  ;  Person 
V.  Carter,  3  ]\Iuri:)hy,  321  ;  Case  of  James 
Taylor,  1  Browne,  Ixxiii ;  Cady  v.  Shep- 
herd, 11  Pick.  400  ;  Van  Deusen  v.  Blum, 
18  Pick.  229  ;  United  States  v.  Astley,  3 
Wash.  C.  G.  508  ;  Fleming  v.  Dunbar,  2 
Hill  (S.  C),  532;  Sloo  v.  State  Bank  of 
Illinois,  2  ill.  441  ;  Cummins  v.   Cassily, 

5  B.  Mon.  75  ;  Montgomery  v.  Boone,  2 
B.  Mon.  244;  Button  v.  Hampson, 
Wright,  93;  Ford  v.  Haft,  Wright, 
118;  Lay  ton  v.  Hastings,  2  Harr.  147; 
Morris  v.  Jones,  4  Harr.  428  ;  Albers  v. 
Wilkinson,  6  G.  &  J.  358 ;  Lucas  v. 
Sanders,  1  McMuUan,  311  ;  Napier  v. 
Catron,  2  Humph.  534  ;  Smith  v.  Tapper, 
4  Sm.  &  M.  261  ;  Snyder  v.  May,  19  Pa. 
235  ;  County  v.  Gates,  26  Mo.  315  ; 
Gibson  v.  AVarden,  14  Wall.  244  ;  Walton 
V.  Tusten,  49  Miss.  569 ;  [Herzog  v. 
Sawyer,  61  Md.  344  ;  Moore  v.  Stevens, 
60  Miss.  809  ;  Weeks  v.  Mascoma  Rake 
Co.,  58  N.  H.  101;  Sibley  v.  Young,  26 
S.  C.  415,  2  S.  E.  314  ;  Hull  v.  Young, 
30  S.  C.  121,  8  S.  E.  695.  The  contrary 
seems  to  have  been  held  in  one  nisi  prius 
case,  Mears  v.  Seronold,  cited  by  Dampier, 
orquendo,  in  Harrison  v.  Jackson,  7  T.  R. 
208.]  Hence  custom-house  bonds,  signed 
and  sealed  by  one  partner,  tliough  in  the 
name  of  and  for  duties  on  goods  imported 
by  and  belonging  to  the  partnership,  are 
yet,  at  common  law,  not  binding  on  the 
firm,  but  only  on  the  executing  member. 
Tom  V.  Goodrich,  2  Johns.  213  ;  Walden 
V.  Sherburne,  15  Johns.  409,  423  ;  United 
States  V.  Astley,  3  Wash.  C.  C.  508.  But 
so  much  practical  inconvenience  has  been 
found  to  result  from  this  application  of  the 


doctrine  that,  by  act  of  Congress  of  March 
1,  1S23,  Stat.  2,  chap.  21,  §  25,  it  was  pro- 
vided that  any  bond  to  the  United  States 
entered  into  for  the  payment  of  duties  by 
a  merchant  belonging  to  a  firm,  in  the 
name  of  such  firm,  shall  equally  bind  tlie 
partner  or  partners  in  trade  of  the  ])erson 
or  persons  by  whom  such  bond  shall  have 
been  executed.  3  U.  S.  Statutes  at  Large 
(ed.  1846),  737.  [On  the  other  hand,  it 
seems  to  be  held  in  Texas  that  a  partner 
has  authority  in  the  name  of  the  firm  to 
sign  and  seal  a  bond  to  dissolve  an  attach- 
ment against  the  firm.  Munzesheimer  v. 
Heinze,  74  Tex.  254,  11  S.  ^N.  1094.] 

Qi)  See  Steiglitz  v.  Egginton,  Holt,  141; 
Berkeley  v.  Hardy,  5  B.  &  C.  355';  Trimble 
V.  Coons,  2  A.  K.  Marsh.  375;  Cummins  v. 
Cassily,  5  B.  Mon.  74  ;  Hart  v.  Withers, 
1  Barr,  285;  Pickering  v.  Holt,  6  Me. 
160;  Blood  v.  Goodrich,  9  Wend.  75,  76, 
12  Wend.  525. 

(i)  It  seems  to  be  established  in  Eng- 
land fand  this  is  also  the  doctrine  of  some 
early  American  cases),  that,  to  bind  his  co- 
partners by  specialty,  a  partner  must  have 
a  special  authority  under  seal.  The  requi- 
site authority  is  not  conferred  by  a  general 
partnership  agreement  under  seal.  Harri- 
son V.  Jackson,  7  T.  R.  207 ;  Steiglitz  v. 
Egginton,  Holt,  141 ;  Horsley  v.  Rush, 
cited,  arguendo,  7  T.  R.  209.  See  Wil- 
liams V.  Walsby,  4  Esp.  220  ;  Napier  v. 
Catron,  2  Humph.  534.  Nor  does  the 
doctrine,  which  is  universally  received  as 
well  in  this  country  as  in  England,  that 
one  partner  may  execute  a  valid  deed  on 
behalf  of  his  firm,  if  his  'lopartners  are 
present  and  consent  thereto,  constitute  any 
exception  to  the  general  rule  ;  for,  in  this 
case,  tlie  act  of  the  executing  partner  is 
considered  the  act  of  all.  Lovelace's  Case, 
W.  Jones,  268  ;  Shep.  Touch.  55  ;  Fitz 
Abr.  tit.  "Feoffment,"  ph  105  ;  Com.' Dig. 
"  Fait"  (A.  2)  ;  Burn  v.  Burn,  3  Ves.  578  ; 
Ludlow  i).  Simond,  2  Caines  Cas.  1,  42,  55; 
MacKay  v.  Bloodgood,  9  Johns.  285 ;  Mc- 
Whorter  v.  McMahan,  1  Clarke  Ch.  400  ; 
Halsey  v.  Whitney,  4  Mason,  232  ;  Darst 
V.  Roth,  4  Wash.  C.  C.  471  ;  Anthony  v- 
Butler,  13  Pet.  423,  433  ;  Hart  v.  Withers, 


123.] 


RIGHTS   AND    DUTIES   OF    PARTNERS, 


151 


§  123.    Limitations    of   the    Rule     as    to    Seals    —  An     important 
limitation  to  thu  operation  of  the  rule  occurs  in    proceeding's  in 


1  BiiiT,  SS.o,  291  ;  Fichtliorii  v.  Boyer,  5 
Watts,  159  ;  Overton  v.  Tozer,  7  Watts, 
333  ;  Potter  v.  McCoy,  26  Pa.  458  ;  Flood 
V.  Yaiides,  1  Blank t'.  102  ;  Modisett  v. 
Lindley,  2  Bhokf.  120 ;  Henderson  v.  Bar- 
bee,  6  Blackf.  28;  M'Artlmr  v.  Ladd,  5 
Oiiio,  514,  517:  Pike  v.  Bason,  21  Me. 
287;  Fleming  v.  Dunbar,  2  Hill  (8.  ('.), 
533  ;  Freeman  v.  Carliart,  17  Ga.  348  ;  Lee 
V.  Onstott,  1  Ark.  206,  218  ;  Day  v.  Laf- 
ferty,  4  Ark.  450.  The  doctrine  is  the 
same  in  equity  as  at  law.  Burn  v.  Burn, 
supra;  1  Hov.  Supp.  410.  See  Smith  v. 
Winter,  4  M.  &  W.  454  ;  Palmer  v.  Justice 
Assurance  Co.,  6  E.  &  B.  1015.  While, 
then,  in  England,  the  common-law  doc- 
trines in  reference  to  the  execution  of 
sealed  -instruments  have,  as  far  as  part- 
ners are  concerned,  undergone  but  little, 
if  any,  modification,  the  American  cases 
have  made  great  and  decided  innovations. 
Thus,  in  most  of  the  States,  it  is  well 
established  that  a  partnership  will  be 
bound  by  a  deed  executed  by  one  partner 
on  its  behalf,  provided  the  act  of  such 
partner  have  from  his  copartners  either  a 
previous  parol  authority  or  a  subsequent 
parol  ratification.  The  grounds  of  this 
qualification  of  the  old  rule  of  the  common 
law  are  clearly  and  forcilily  stated  in  the 
opinion  of  Mr.  Chief  Justice  Jones,  in 
Gram  v.  Seton,  1  Hall,  262.  This  opinion 
includes  a  very  elaborate  review  of  all  the 
leading  authorities  upon  the  subject.  For 
cases  supporting  the  doctrine  laid  down  in 
Gram  v.  Seton,  see  Skinner  v.  Dayton,  19 
Johns.  513,  5  Johns.  Ch.  351  ;  Smith  v. 
Kerr,  3  N.  Y.  144  ;  Cady  v.  Shepherd,  11 
Pick.  400;  Swan  v.  Stedinan,  4  Met.  548  ; 
McXaughten  v.  Partridge,  11  Ohio,  223, 
235 ;  Purviance  v.  Sutherland,  2  Ohio  St. 
478,  486  ;  Person  v.  Carter,  3  Murph.  321  ; 
Fleming  v.  Dunbar,  2  Hill  (S.  C),  532; 
Lucas  V.  Sanders,  1  McMullan,  311  ;  Mc- 
Cart  V.  Lewis,  2  B.  Mon.  267  ;  Darst  v. 
Koth,  4  Wash.  C.  C.  471  ;  Bond  v.  Aitkin, 
6  W.  &  S.  165,  overruling  some  eaiiier 
cases  in  Pennsylvania  ;  Jackson  v.  Porter, 

2  Mart.  (La.)  200  ;  Drumright  v.  Philpot, 
16  Ga.  424  ;  Price  v.  Alexander,  2  Greene 
(la. ),  427  ;  McDonald  v.  Eggleston,  26  Vt. 
154  ;  Gwinn  v.  Rooker,  24  Mo.  290  ;  Johns 


V.  Battin,  30  Pa.  84  ;  Lowery  v.  Drew,  18 
Tex.  786 ;  [Herzog  v.  Sawyer,  61  Md. 
344  (scinble)  ;  Sterling  v.  Bouk,  40  Minn. 
11,  41  X.  W.  236  ;  Moore  v.  Stevens,  60 
Miss.  809  (semblc)  ;  Stroman  v.  Varn,  19 
S.  C.  307  ;  Sibley  v.  Young,  26  S.  C.  415, 
2  S.  E.  314  ;  Hull  v.  Young,  30  S.  C.  121, 
8  S.  E.  695  ;  Kasson  v.  Brocker,  47  Wis. 
79,  1  N.  W.  418;  liumery  y.  McCulloch, 
54  Wis.  565,  12  N.  W.  65.]  See  also 
Brulton  c.  Burton,  1  Chitty,  707.  In 
Worrall  v.  Munn,  5  N.  Y.  221,  240,  Paige, 
J.,  regards  the  true  rule,  as  ilerived  from 
the  cases,  to  be,  that  a  pi-ior  jjarol  author- 
ity, or  a  subsequent  ])arol  ratification,  will 
make  a  specialty,  executed  by  one  partner 
in  behalf  of  his  firm,  binding  upon  his  co- 
partners, when  the  act  in  question  would 
have  been  valid  if  no  seal  had  been  used. 
In  Illinois  and  Alabama  it  is  held  to  be  a 
presumption  "warranted  by  common  sense, 
by  justice,  and  sound  reason,  as  well  as  by 
the  principles  of  law,  that  all  the  signers 
of  an  instrument,  indicating,  upon  its  face, 
an  intention  to  seal  it,  adopt  an}'  seal  or 
scrawl  that  may  be  annexed  to  the  name 
of  one."  Davis  v.  Burton,  4  111.  41 ;  Wit- 
ter V.  McNiel,  4  111.  433  ;  Hatch  v.  Craw- 
ford, 2  Porter,  54 ;  Herbert  v.  Hanrick,  16 
Ala.  581.  In  this  last  case  the  doctrine  of 
Gram  v.  Seton  is  asserted.  In  Tennessee, 
the  technical  rule  of  the  common  law  is 
strictly  adhered  to,  and  no  partner  can 
bind  his  copartnership  by  affixing  a  seal, 
unless  he  be  specially  empowered,  under 
seal,  so  to  do.  Turbeville  v.  Pivan,  1 
Humph.  113;  Napier  i'.  Catron,  2  Humph. 
534.  See  Lambden  v.  Sharp,  9  Humjih. 
224.  As  for  the  evidence  of  prior  author- 
ity, or  subsequent  ratification  from  which 
a  jury  may  infer  the  power  of  one  partner 
to  bind  his  copartners  by  deed,  it  has  been 
held,  that  where,  in  a  deed  of  dissolution 
executed  by  both  partners,  a  debt,  for 
which  one  partner  had  given  a  sealed  note 
in  the  name  of  his  firm,  was  put  down  as 
a  delit  "  owing  by  said  firm,"  this  was  an 
acknowledgment  of  the  legal  obligation 
upon  the  firm  of  the  specialty  from  which 
an  authority  to  execute  it  might  be  inferred. 
Fleming  v.  Dunbar,  2  Hill  (S.  C),  532. 
So  where  one  of  two  partners  gave  a  bond 


152 


THE   LAW   OF   PARTNERSHIP. 


[CH.  vir. 


bankruptcy ;  (/)  and  in  the  case  of  a  release  to  a  joint  debtor  of 
a  partnership  claim  ;  in  both  of  which  instances  one  partner 
may  bind  his  firm,  and  without  special  authority,  (k)  The 
reason  for  the  general  rule  is  obvious.  The  seal  belongs  to 
common  law  and  not  to  the  law-merchant,  and  partnership 
belongs  to  the  law-merchant  and  not  to  common  law.  (?)      But 


for  a  firm  debt,  in  the  name  of  the  firm, 
and  the  other  partner  afterwards  gave  di- 
rec'tioiis  for  its  payment,  by  an  order  in 
wliich  the  bond  was  described  as  the  bond 
of  tlie  purtnersliip,  it  was  held  that  this 
order  was  evidence  of  a  recognition  of,  and 
an  assent  to,  the  act  of  the  partner  who 
executed  the  bond,  from  which  his  author- 
ity so  to  act  might  fairly  be  found  by  the 
jury.  Person  v.  Carter,  3  Murph.  321. 
See  Price  v.  Alexander,  2  Greene  (la.), 
427  ;  Drumright  i-.  Philpot,  16  Ga.  424  ; 
Bond  V.  Aitkin,  6  W.  &  S.  165  ;  Tuttle  v. 
Eskridge,  2  Munf.  330 ;  Wilson  v.  Hunter, 
14  Wis.  683. 

(./)  See  ante,  §  118. 

(k)  The  rule  applicable  to  a  release  by 
one  partner  of  a  joint  claim  has  been  gen- 
erally stated  thus:  "Though  one  partner 
cannot  by  deed  bring  any  fresh  burden 
upon  his  copartner,  he  maj'  bar  him  of  a 
right  which  they  possess  jointly."  One 
reason  soTuetimes  given  for  this  apparent 
exception  to  the  general  doctrine  of  the 
common  law  is,  that,  inasmuch  as  a  debtor 
may  lawfully'  pay  his  debt  to  one  partner, 
he  ought,  also,  to  be  able  to  obtain  a  dis- 
charge upon  due  payment.  Another  rea- 
son, of  a  similar  nature,  is  suggested  by  the 
above  rule  itself,  which  is,  that  though  a 
release  be  UTider  seal,  yet  its  operation  is 
not,  like  that  of  a  bond  or  of  a  deed,  to 
expose  the  sejiarate  persons  and  estates 
(real  as  well  as  personal)  of  the  partners 
to  special  and  dangerous  liabilities.  But 
]irobahlj'  the  true,  though  technical,  foun- 
dation of  the  rule  that  one  partner  may 
bind  his  firm  by  a  release,  under  seal,  of  a 
joint  claim,  is,  that  inasmuch  as  such  a 
release  is  certainly  binding  on  the  partner 
who  executes  it,  and  inasmuch  as  he  is  a 
necessary  coplaintiff  in  any  action  by  the 
firm  for  the  debt  released,  his  release  neces- 
sarily operates  as  a  bar  to  any  joint  action 
by  the  partners  for  the  same  debt.  The 
rule  is  the  same  both  in  law  and  in  equity. 
2  Rol.  Abr.  410  (D)  ;  Tooker's  Case,  2  Co. 


68  ;  Ruddock's  C:ise,  6  Co.  25  ;  Periy  v. 
Jackson,  4  T.  R.  519;  Stead  ?;.  Salt,  10 
J.  B.  Moore,  393,  3  Bing.  103  ;  D.  anju- 
endo,  Swan  v.  Steele,  7  East,  211  ;  per 
Parke,  B.,  in  Adams  v.  Bankart,  1  Or.  M. 
&  R.  684,  and  in  Phillips  v.  Clagett,  11 
M.  &  W.  84,  94;  Pierson  v.  Hooker,  3 
Johns.  68  ;  Bulkley  v.  Dayton,  14  Johns. 
387  ;  Morse  v.  Bellows,  7  N.  H.  567  ; 
United  States  v.  Astle}',  3  Wash.  C.  C. 
511  ;  McBride  v.  Hagan,  1  Wend.  326, 
337;  Napier  v.  McLeod,  9  Wend.  120; 
Salmon  v.  Davis,  4  Binney,  375  ;  Curtwel, 
V.  Brown,  5  Jones,  263  ;  [Allen  v.  Cheever, 
61  N.  H.  32  ;  Stout  v.  Ennis  Nat.  Bank, 

69  Tex.  384,  8  S.  W.  808.]  Respecting 
deeds  of  composition,  see  Watson  on  Part, 
p.  225  ;  Ellison  v.  Dezell,  1  Selw.  N.  P. 
(Am.  ed.)  385.  See  Hawksliaw  v.  Par- 
kins, 2  Swanst.  539,  544  ;  Bruen  v.  Mar- 
quand,  17  Johns.  58  ;  Halsey  v.  Whitney, 
4  Mason,  206,  232 ;  Smith  v.  Stone,  4  Gill 
&  J.  310.  As  one  partner  may  himself  re- 
lease a  partnership  claim,  so  he  may,  un- 
der seal,  authorize  an  agent  to  bind  the 
firm  by  the  discharge  of  a  debt  due  to  it. 
Wells  V.  Evans,  20  Wend.  251,  22  Wend. 
324.  Where  one  partner  dul}"^  signed  and 
sealed  a  release  of  all  actions,  claims,  de- 
mands, &c.,  but  the  release  did  not  pur- 
port on  its  face  to  ajiply  particularly  either 
to  the  separate  demands  of  that  partner  or 
to  those  of  his  firm,  it  not  appearing  that 
the  releasee  was  separately  indebted  to  the 
executing  paitner,  the  release  was  held  to 
be  a  discharge  of  the  debts  due  the  part- 
nership. Emerson  r.  Knower,  8  Pick.  63. 
And  if  one  partner  execute  a  deed  purport- 
ing to  release  all  the  joint  demands,  parol 
evidence  that  a  particular  claim  was  not 
intended  to  be  included  is  inadmissible. 
Pierson  v.  Hooker,  3  Johns.  68. 

(/)  Lord  Kenyon  says,  in  Harrison  v. 
Jackson,  7  T.  R.  210,  that  it  would  be  a 
most  alarming  doctrine  to  hold  out  to  the 
mercantile  world  that  one  partner  could 
bind  the  others  by  deed  ;  since  it  would 


§  123.] 


RIGHTS   AND   DUTIES   OF   PARTNERS. 


153 


as  there  are  very  few  mercantile  transactions  in  which  seals  are 
needed  or  used :  and  as,  if  a  seal  was  used  when  the  instrument 
was  equally  effective  without  it,  the  courts  regard  the  seal  as 
surplusage   only ;  (m)    and  as   a   subsequent   ratification    would 


extend  to  the  case  of  mortgages,  and  would 
enable  a  jjartner  to  give  to  a  favorite  credi- 
tor a  real  lien  on  the  estates  of  the  other 
partners.  But  tlie  reasoning  of  Jones, 
C.  J.,  on  tliis  point,  in  Giam  v.  Seton,  1 
Hall,  269,  seems  conclusive  :  "Negotiable 
papei',  by  which  the  partner  may  bind  the 
firm,  equally  imports  a  consideration  with 
a  seal  ;  and,  upon  general  principles,  the 
use  of  the  seal  of  the  cojiartner,  ecjually 
with  tlie  signature  of  the  copartnership, 
would,  if  permitted,  be  restricted  to  copart- 
nership puri)Oses  and  copartnership  opera- 
tions solely  ;  and  the  joint  deed  of  the 
copartners  executed  by  the  present  for  the 
absent  members,  be  held  competent  to  con- 
vey or  to  encumber  the  copartnership  prop- 
erty alone,  and  to  have  no  operation  upon 
the  private  funds  or  separate  estate  of  the 
coi)artners.  With  these  restrictions  upon 
the  use  and  operation  of  the  seal,  is  not 
the  power  of  a  partner  to  bind  his  copart- 
ner, and  to  charge  and  encumber  his 
estate,  as  great  and  as  mischievous,  with- 
out the  authority  to  use  the  seal  of  the 
absent  partner,  as  it  would  be  with  that 
authority  ?  "  It  is  to  be  remembered,  also, 
that  the  distinction  formerly  taken  between 
debts  by  specialty  and  those  by  simple  con- 
tract—  by  which  the  former  were  held  to 
be  a  charge  upon  the  real  estate  of  the 
debtor,  wliile  the  latter  were  not  —  is  now 
for  the  most  part  done  away,  at  least  in 
this  country. 

(vi)  This  doctrine  has  been  oftenest 
applied  where  one  partner  has  transferrnd 
an  interest,  absolute  or  qualified,  in  the 
partnership  property.  Thus,  a  general  or 
partial  assignment  for  the  benefit  of  credi- 
tors, Anderson  v.  Tompkins,  1  Brock.  462  ; 
Harrison  v.  Sterry,  5  Cranch,  289  ;  M'Cul- 
lough  V.  Sommerville,  8  Leigh,  415 ; 
Robinson  v.  Crowder,  4  McCord,  519  ; 
Deckard  v.  Case,  5  Watts,  22  ;  Hennessy 
V.  Western  Bank,  6  W.  &  S.  300,  310  ; 
a  mortgage  of  personal  property  belonging 
to  the  firm,  Tapley  r.  Butterfield,  1  ]Met. 
515  ;  Milton  v.  Mosher,  7  Met.  244  ; 
Sweetzer  v.  Mead,  5  Mich.  10"  ;  an  as.sign- 


ment  of  a  chose  in  action  due  to  the  firm, 
Everit  v.  Strong,  5  Hill,  163  :  these  trans- 
actions have  all  been  held  valid,  notwith- 
standing that  the  partner,  purporting  to 
act  for  his  firm,  has  used  a  seal  therein. 
It  has  also  been  held,  that  a  delegation  of 
power  under  seal  by  one  partner  to  do  acts 
which  the  agent  would  have  been  equally 
competent  to  do,  if  authorized  by  parol, 
was  not  invalid  on  account  of  the  unneces- 
sary solemnity  of  the  instrument  making 
the  delegation.  Lucas  v.  Bank  of  Darien, 
2  Stewart,  280  ;  [Boyd  r.  Thompson,  (Pa.) 
25  Atl.  769.]  See  also  Price  v.  Alexander, 
2  Greene  (la.),  427,  433;  Purviance  i*. 
Sutherland,  2  Ohio  St.  478  ;  and  contra, 
Cummins  v.  Cassily,  5  B.  Mon.  74,  75. 
LTpon  the  same  principle,  the  case  of 
Brutton  v.  Burton,  1  Chitty,  707,  seems 
to  have  been  decided.  The  doctrine  has 
been  extended  to  executory  contracts. 
Lawrence  v.  Taylor,  5  Hill,  107  ;  Worrall 
V.  Munn,  5  X.  Y.  229.  See  Pike  v.  Bacon, 
21  Me.  280  ;  McWhorter  v.  McMahon,  1 
Clarke  Ch.  400  ;  Ruffner  v.  McConnel,  17 
111.  212,  216;  [Sterling  v.  Bock,  40  Minn. 
11,  41  X.  W.  236.]  See  remarks  of  Rogers, 
J.,  in  Hennessy  a.  Western  Bank,  6  W. 
&  S.  310.  The  limitation  to  the  doctrine, 
that  a  transaction  by  one  partner  which 
would  be  binding  on  the  firm  without  seal 
is  not  vitiated  because  a  seal  is  used,  is 
thus  stated  in  Lucas  v.  Bank  of  Darien,  2 
Stew.  297  :  "It  is  said  that  even  an  act 
which  would  be  valid  against  the  firm  with- 
out a  seal,  if  done  by  the  partner  or  by 
agent  under  a  parol  appointment,  would  be 
void  if  executed  by  specialty.  On  this 
point  I  think  a  wise  discrimination  is 
required.  I  take  the  distinction  to  be 
this  :  that,  if  the  bond  or  deed  constitutes 
the  contract,  it  must  be  made  the  evidence 
of  it,  and  determines  the  remedy.  Then 
the  principle  applies  ;  because  the  legal 
effect  of  the  contract,  the  form  of  the 
remedy,  and  the  rules  of  evidence,  are 
essentially  difTerent,  the  security  being  of 
higher  dignity."  And  this  is  in  accord- 
ance with  the  language  of  Marshall,  C.  J., 


154 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


liavc  the  effect  of  previous  authority ;  and  as  courts  of  equity, 
and,  to  some  extent,  courts  of  law,  place  land,  when  it  is  part 
of  the  partnership  property  (and  it  is  in  relation  to  conveyances 
of  land  that  the  seal  is  most  necessary,  and  most  frequently  inter- 
feres with  the  law  of  ])artnership),  on  the  same  footing  with 
personal  property,  —  the  rule  that  a  partner  can  athx  no  seal  but 
his  own  and  that  of  one  who  has  given  him  authority  to  do  so, 
may  perhaps  be  considered  as  having  now  less  practical  import- 
ance than  formerly. 

§  124.  Liability  of  Partner  afBxing  Seal  for  Firm. — Though  one 
partner,  by  the  executiun  for  his  copartners  and  himself  of  a 
sealed  instrument,  cannot  bind  them,  yet  he  always  binds  him- 
self. This  rule  is  one  derived  from  the  law  of  agency,  and 
regards  each  partner,  not  as  standing  for  and  representing  the 
partnership,  but  as  the  agent  of  all  his  copartners,  and  conse- 
quently as  always  making  himself  liable,  when,  from  want  of 
sufficient  authority,  he  fails  to  bind  those  for  whom  he  attempts 
to  act.  (w) 


in  Audersoii  v.  Tompkins,  1  Brock.  462  : 
"  No  action  can  be  sustained  against  the 
partner  who  has  not  executed  the  instru- 
ment on  the  deed  of  his  copartner.  Ko 
action  can  be  sustained  against  the  partnei', 
which  lests  on  tlie  validity  of  such  a  deed 
as  to  the  persou  who  has  not  executed  it." 
Bewley  v.  Tams,  17  Pa.  48.5.  The  doc- 
trire  of  the  court  in  Purviance  v.  Suther- 
land, 2  Ohio  St.  478,  is,  that  the  technical 
rule  of  the  common  law  is  satisfied  by 
holding  that  an  agreement  under  seal  in 
the  name  of  tlie  firm,  which  is  executed  by 
one  partner  only,  is  not  the  deed  of  the 
partnership.  But  such  an  agreement, 
though  the  deed  only  of  the  partner  seal- 
ing it,  may  yet  be  evidence  of  a  partner- 
ship liability  (Fagely  v.  Bellas,  17  Pa.  67); 
and  perhaps  the  form  of  the  agi'eement 
may  raise  a  presumption  that  a  seal  was 
affixed  to  the  contract  by  mistake.  In 
Kentuck)',    by   statute,   promissory  notes 


the  same  effect  in  every  other  respect." 
Per  Robertson,  C.  J.,  in  Montgomery  v. 
Boone,  2  B.  Mon.  244.  See  Human  v. 
Cunitfe,  32  Mo.  316  ;  Dubois's  Ai)peal,  38 
Pa.  231.  But  see  Schmertz  v.  Shreeves, 
62  Pa.  457,  and  Russell  v.  Annable,  109 
Mass.   72. 

(n)  Elliot  V.  Davis,  2  Bos.  &  P.  338  ; 
Hawkshaw  v.  Parkins,  2  Swanst.  543  ; 
Trimble  v.  Coons,  2  A.  K.  Marsh.  375  ; 
Williams  v.  Hodgson,  2  H.  &  J.  474  ; 
La)-ton  V.  Hastings,  2  Harr.  (Del.)  147; 
Skinner  v.  Dayton,  5  Johns.  Ch.  351,  19 
Johns.  513  ;  Clement  v.  Brush,  3  Johns. 
Cas.  180  ;  Gates  v.  Graham,  12  Wend.  53  ; 
Jackson  v.  Stanford,  19  Ga.  14.  [Weeks 
V.  Masconia  Rake  Co.,  58  N.  H.  101.] 
See,  however,  Sellers  v.  Streator,  5  Jones, 
261  ;  also,  supra,  §  121,  note  (e).  Thus, 
if  one  onh^  of  three  partners  execute  a  deeil 
of  assignment,  purporting  to  convey  all  the 
personal  propert\-  of  the  three  to  trusti^es, 


have  all  the  legal  effect   and  dignity  of    for  the  benefit  of  creditors,   such  a  deed 


bonds  under  seal.  Nevertheless,  "  if  a 
y)artner,  in  executing  several  notes  for  a 
debt,  in  instalments,  should  happen  to 
affix  a  superfluous  scrawl  to  one  of  them, 
and  omit  it  as  to  the  others,  the  first 
might  be  binding  on  himself  alone,  whilst 
the  others  would  bind  all  the  partners  ;  and 
this  would  be  the  only  legal  effect  of  the 
scrawl,  without  which  the  note  would  have 


will  pass  the  share  of  the  executing  ])art- 
ner.  Bowker  v.  Burdekin,  11  M.  &  W. 
128.  See  Dutton  v.  Morrison,  17  Ves.  193  ; 
Hughes  V.  Ellison,  5  Mo.  463.  But  if  one 
partner  executes  a  sealed  instrument  for 
himself  and  his  partners,  and  suit  is 
brought  against  all,  there  can  be  no  re- 
covery in  that  suit  against  the  executing 
partner.      Hart  v.  Withers,  1  Barr.  285. 


§  125.] 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


155 


§125.  Power  to  Confess  Judgment.  —  The  Same  principles  of 
the  common  law  which  operate  to  disable  a  partner  from  binding 
his  copartners  by  specialty,  must,  it  should  seem,  still  more  com- 
pletely incapacitate  him  to  bind  them,  without  their  distinct 
assent,  by  a  voluntary  confession  of  judgment.  A  fortiori,  he 
cannot,  by  virtue  of  his  implied  power,  authorize  another  to  do 
it,  [as  by  giving  a  warrant  of  attorney  for  that  purpose,]  even 
though  the  authority  be  not  under  seal,  (a)  But  if  a  volun- 
tary judgment  be  confessed  by  one  partner  against  his  firm,  the 
judgment  is  binding  upon  that  partner,  and  will  not  be  set  aside 
uj)on  his  aj)plication.  Nor  will  it  be  altogether  set  aside  upon 
the  application  of  the  other  partners  ;  but  the  court  will  amend 
the  judgment  by  ordering  their  names  to  l)e  struck  out,  and 
otherwise  correcting  it  so  that  they  shall  not  be  bound,  or  will 
order  execution  to  be  served  on  the  ])erson  and  estate  of  the 
acting  partner  only,  or  that  only  his  several  interest  in  the  part- 
nership property  shall  be  sold,  (h') 


So,  if  a  partner  signs  and  seals  a  deed  of 
composition  in  the  name  and  firm  of  him- 
self and  partner,  he  alone  is  entitled  to 
bring  covenant  thereon.  •  Metcalf  v.  Ry- 
croft,  6  M.  &  S.  75.  See  Gates  r.  Graham, 
12  Wend.  53.  By  contract  under  seal, 
purporting  to  be  made  between  the  plain- 
tiffs and  the  firm  of  B.  &  T.,  the  former 
agreed  to  erect  a  certain  dam  for  the  uses 
of  the  partnership.  The  contract  was 
signed  with  the  name  of  the  partner- 
ship by  B.,  and  a  seal  affi.ved  thereto.  It 
was  held  that  B.,  not  having  aiithority 
thus  to  bind  his  copartners,  the  firm  were 
not  liable  on  the  specialty,  but  were  liable 
on  an  implied  promise  for  the  work  done, 
and  the  materials  furni.shed  by  the  jilain- 
titfs  to  their  benefit.  Van  Deusen  v.  Blum, 
18  Pick.  229.  See  Sellers  v.  Streator,  5 
Jones,  261 ;  Fox  v.  Norton,  9  Mich.  207. 
[See  on  the  effect  of  a  deed  sealed  by  one 
partner,  Ames,  Cas.  on  Part.  488.] 

(a)  Green  v.  Beals,  2  Caines,  254  ; 
Crane  v.  French,  1  Wend.  311  ;  JIcBride 
V.  Hagan,  1  Wend.  335  ;  Grazebrook  v. 
M'Creedie,  9  Wend.  437  ;  Waring  v. 
Robinson,  1  Hoflf.  Ch.  524  ;  Gerard  v. 
Basse,  1  Ball.  119  ;  McKee  v.  Bank  of  Mt. 
Pleasant,  7  Ohio,  175  ;  Remington  v. 
Cummings,  5  Wis.  138;  Hull  v.  Garner, 
31  Miss.  145;  Lagow  v.  Patterson,  1 
Blackf.    252;  Barlow  i-.  Keno,    1    Blackf. 


252  ;  Sloo  V.  The  State  Bank  of  Illinois, 
2  111.  428  ;  Waring  v.  Eobinson,  1  Hoff. 
Ch.  525  ;  Harper  v.  Fox,  7  W.  &  S.  142  ; 
Bitzer  v.  Shunk,  1  W.  &  S.  340  ;  Cash  v. 
Tozer,  1  W.  &  S.  519  ;  Overton  v.  Tozer, 
7  Watts,  331  ;  Bennett  v.  JIarshall,  2 
Mills,  436  ;  Grier  v.  Hood,  25  Pa.  430  ; 
]Morgan  v.  Richardson,  16  Mo.  409;  Biiiney 
V.  Le  Gal,  19  Barb.  592  ;  per  Wilde,  C.  J., 
Hainbidge  v.  De  La  Crouee,  3  C.  B.  744. 
See  Brutton  v.  Burton,  1  Chitty,  707 ; 
Kinnersley  v.  Mnssen,  5  Taunt.  264  ; 
[Soper  V.  Fry,  37  Mich.  236  ;  Ellis  v. 
Ellis,  47  N.  J.  69  ;  Perth  Amboy  Terra- 
Cotta  Co.  V.  Wood,  124  Pa.  367,  17  Atl. 
4  ;  McCleery  v.  Thompson,  130  Pa.  443, 
18  Atl.  735.  Contra,  Wilmot  v.  The 
Ouachita  Belle,  32  La.  Ann.  607.  Where 
a  power  to  confess  judgment  need  not  be 
sealed,  a  partner  binds  his  firm  by  giving 
such  power.  Alexander  v.  Alexander,  85 
Va.  353,  7  S.  E.  335,  even  though  the 
])0\ver  is  in  fact  sealed,  since  the  seal  may 
be  rejected.  Boyd  v.  Thompson  (Pa.),  25 
Atl.  769.] 

(h)  Motteux  V.  St.  Aubin,  2  W.  Bl. 
1133  ;  Green  v.  Beals,  2  Caines,  254  ; 
Crane  v.  French,  1  Wend.  311;  St.  John 
V.  Holmes,  20  Wend.  609  ;  Gerard  v. 
Basse,  1  Dall.  119  ;  Bitzer  r.  Shnnk,  1  W. 
&  S.  340  ;  Harper  v.  Fox,  7  W.  &  S.  142  ; 
Morgan  v.  Richardson,  16  Mo.  409.     See 


156 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


§  126.  Representations  or  Admissions  of  a  Partner.  —  As  a  part- 
ner may  act  for  his  firm  by  his  general  authority,  so,  as  we  have 
ah-eady  seen,  his  representations,  acknowledgments,,  admissions, 
part  payments,  notice  given  or  received,  and  all  other  doings  on 
which  rights  or  obligations  may  be  founded,  are  binding  upon  the 
partnership  :  always,  however,  with  the  qualification  that  these 
things  belong  fairly  and  actually  to  the  bnsincss  of  the  firm;  for 
this  is  a  condition  which  universally  limits  his  power.  Thus,  it 
was  once  quite  uncertain  what  was  the  effect  of  an  acknowledg- 
ment, by  a  partner,  of  a  debt  barred  by  the  statute  of  limitations. 
It  was  held  to  bind  the  firm  as  long  as  this  statute  was  regarded 
as  founded  on  presumption  of  payment.  Whether  there  had  been 
such  payment  was  perfectly  well  known  to  every  partner,  and 
known  to  each  one  after  a  dissolution  as  well  as  before.  Conse- 
quently, if  a  partnership  owed  a  debt,  and  was  dissolved,  and  the 
debt  ran  on  more  than  six  years,  and  then  one  of  the  former 
partners  acknowledged  the  debt,  this  removed  the  presumption  of 
payment,  and  all  the  partners  became  bound,  (n) 


Gi-ier  v.  Hood,  25  Pa.  430 ;  Smith  v. 
Tupiier,  4  Sm.  &  M.  261  ;  Overton  v. 
Tozer,  7  Watts,  331  ;  ('ash  v.  Tozer,  1  W. 
&  S.  519.  See  Sloo  v.  State  Bank  of 
Illinois,  2  111.  428.  A,  a  member  of  a 
firm,  confessed  judgment  against  himself 
for  a  firm  debt.  It  was  held  that  the 
partnership  property  might  be  levied  on 
to  satisfy  this  judgment.  Ross  v.  Howell, 
84  Pa.  129. 

(k)  The  different  views  taken  at  differ- 
ent periods  by  the  courts  of  the  statute  of 
limitations  are  stated  in  all  the  element- 
ary treatises  upon  the  subject.  See  3 
Parsons  on  Contracts,  61,  67  ;  Angell  on 
Limitations,  ch.  20  and  23.  The  earliest 
decisions  of  all  seem  to  indicate  that  the 
statute  was  at  first  regarded  as  a  statute  of 
repose.  But  this  view  soon  gave  way  to 
another,  which  construed  the  statute  as  one 
of  presumption  entirely  ;  rendering  it  prob- 
able that  the  barred  debt  had  been  paid, 
but  leaving  this  presumption  liable  to 
rebuttal  by  anything  amounting  to  proof 
that  the  debt  was  in  fact  unsatisfied.  It 
is  true,  that,  to  recover  upon  a  claim 
against  which  the  statute  had  run,  there 
was  required  not  only  satisfactory  evi- 
dence of  the  existence  of  the  debt,  but 
also  a  new  promise.  But  if  the  continued 
existence  of  the  debt  was  proved  by  the 
acknowledgment    or     admission    of    the 


debtor,  or  by  any  thing  amounting  thereto, 
then  the  plaintiff  was  not  required  to  go 
furthei-,  but  might  rest  his  case  upon  pmof 
of  the  acknowledgment  or  admission,  and 
the  law  would  imply  therefrom  the  neces- 
sary promise.  While  the  statute  of  lim- 
itations was  regarded  in  this  light,  the 
effect  of  an  acknowledgment  by  one  of 
several  joint  debtors,  that  a  joint  debt 
barred  by  the  statute  was  still  unsatisfied, 
came  before  Lord  Mansfield,  in  the  case 
of  Whitcomb  v.  Whiting,  3  Doug.  652  ; 
and  it  was  there  decided  that  the  acknowl- 
edgment of  one  must  be  taken  as  the 
acknowledgment  of  all ;  then,  all  having 
admitted  their  joint  indebtedness,  the  law 
raises  the  new  promise. 

As  to  the  support  which  the  case  de- 
rives from  other  adjudications,  it  has  some- 
times been  supjiosed  to  be  inconsistent 
with  the  earlier  case  of  Bland  v.  Haselrig, 

2  Vent.  1.52.  See  Atkins  r.  Tredgold,"2 
B.  &  C.  28,  opinion  of  Abbott,  C.  J. 
But,  besides  the  facts  that  the  latter  case 
cannot  be  regarded  as  of  nuich  authority, 
and  can  best  be  explained  in  a  manner 
which  leaves  it  in  no  way  contradictory 
(see  note  in  3  Doug.  653 ;  remarks  of 
Best,  C.  J.,  in  Perham  v.  Raynal,  2  Bing. 
309  ;    of  Parker,  C.  J.,  in  White  v.   Hall, 

3  Pick.  293  ;  of  Story,  J.,  in  Bell  r.  Mor- 
rison, ]   Pet.  367),  AVhitcomb  v.  Whiting 


§  127.] 


RIGHTS    AND    DUTIES    OP    PARTNERS. 


157 


§  127.    Acknowledgment  removing  Bar  of  Statute  of  Limitations. 
—  But  when  the  statute  of  limitations  came  to  be  looked  upon,  us 


has  been  constantly  actcil  upon  as  sound 
law  in  the  Englisli  courts  ;  Jiut  always, 
however,  we  think,  upon  precisely  the 
same  ^'rounds.  So  long  as  the  statute  of 
limitations  was  regarded  as  one  of  pre- 
sumption merely,  Whitcomb  v.  Whiting 
might  be,  as  it  was,  literally  followed. 
Its  doctrine  was  pushed  to  its  utmost  lim- 
its in  Jackson  v.  Fairbank,  2  H.  Bl.  340. 
There,  one  of  two  makers  of  a  joint  and 
several  promissory  note  having  become 
bankru^Jt,  the  payee  received  a  dividend 
under  the  comnussion,  on  account  of 
the  note,  within  six  years  before  action 
brought.  It  was  held,  that  the  payment 
of  such  dividend  was  such  an  acknowledg- 
ment of  the  del)t  as  took  the  case  out  of 
the  statute  of  limitations  as  to  the  other 
maker.  This  last  case,  and  the  whole 
doctrine  of  Whitcomb  v.  Whiting,  were, 
it  is  true,  strongly  questioned  in  Brnn- 
drum  V.  Wharton,  1  B.  &  Aid.  463.  So 
also  in  Atkins  v.  Tredgold,  2  B.  &  C.  23, 
where,  one  of  two  makers  of  a  joint  and 
several  promissory  note  having  died,  it 
was  held,  that  the  payment  of  interest 
within  six  years  by  the  other  maker  would 
not  take  the  case  out  of  the  statute,  as 
against  the  executors  of  the  deceased  prom- 
isor. But  in  Perham  v.  Kaynal,  2  Bing. 
306,  where  the  two  cases  just  mentioned 
are  considered,  Whitcomb  v.  Whiting  was 
explicitly  denied  to  be  in  any  way  im- 
pugned by  them,  and  was  expressly  af- 
firmed as  good  law.  See  Halliday  v. 
Ward,  3  Camp.  32. 

The  cases  we  have  just  been  consider- 
ing were  all  adjudged  while  the  statute  of 
limitations  was  still  regarded  as  a  statute 
of  presumption,  Perham  v.  Raynal  being 
decided  in  1824.  In  little  more  than  a 
year  after,  Court  v.  Cross,  3  Bing.  329, 
was  adjudged  in  the  Common  Pleas,  and 
■was  the  first  case  in  which  a  decided  stej) 
was  taken  towards  construing  the  statute 
of  limitations  as  a  statute  of  repose.  C.  J. 
Best,  who  then  delivered  the  opinion  of 
the  court,  reasserted  this  view  of  the  stat- 
ute in  Scales  v.  Jacob,  3  Bing.  652.  The 
position  he  assumed  was  adopted  and 
confiimed  by  Lord  Chief  Justice  Tenter- 
den,  in  Turner  v.   Smart,  6  B.  &  C.  603  ; 


and  thenceforward  the  statute  of  limita- 
tions has  been  invariably  regarded  and 
construed  as  a  statute  of  repose.  The 
earlier  doctrine  was  also  applied  to  pay- 
ments of  interest,  made  by  one  of  the 
makers  of  a  joint  and  several  promissory 
note,  though  more  than  six  years  after  it 
became  due.  They  were  held  to  take  the 
case  out  of  the  statute,  as  against  the 
other  maker.  Manderston  v.  Robertson, 
4  Man.  &  Ry.  440  ;  Channell  v.  Ditch- 
burn,  5  M.  &  W.  494.  But,  in  such  case, 
the  payment  or  payments  must  be  dis- 
tinctly shown  to  be  made  on  account  of 
the  particular  debt.  Holme  v.  Green,  1 
Stark,  488.  So,  where  A.  &  B.  made  a 
joint  and  several  promissory  note,  B. 
being  merely  a  surety,  a  part  payment  by 
A.,  within  six  years  and  during  the  life- 
time of  B.,  was  held  to  take  the  case  out 
of  the  statute  so  as  to  make  B.'s  admin- 
istrator liable  on  the  note.  Burleigh  v. 
Stott,  8  B.  &  C.  36.  See  Perham  v.  Ray- 
ual,  2  Bing.  306;  Wyatt  v.  Hodson,  8 
Bing.  309.  And  where  one  of  three  joint 
contractors,  more  than  six  years  after  the 
contracting  of  the  oiiginal  debt,  but  within 
six  years  of  the  action  brought,  made  a 
payment  on  account  of  a  joint  debt,  but 
in  fraud  of  his  co-contractors,  it  was 
nevertheless  held  to  bar  the  operation  of 
the  statute  as  against  the  other  two. 
Goddard  v.  Ingram,  3  Q.  B.  839.  See 
Martin  v.  Brydges,  3  C.  &  P.  83.  But,  as 
we  have  already  seen,  payment  of  interest 
by  one  or  two  makers  of  a  joint  and  sev 
eral  promissory  note,  after  the  death  o? 
the  other,  will  not  take  the  case  out  o'. 
the  statute,  as  against  the  executor  of  W\f 
deceased    maker,    Atkins  v.  Tredgold,    J 

B.  &  C.  23.  See  Ault  v.  Goodiich,  4 
Russ.  430  ;  Way  v.  Bassett,  5  Hare,  55  ; 
the  principle  being  that  the  joint  contract 
is  determined  by  the  death  of  one  of  the 
joint  contractors  ;  nor  after  the  death  of 
one  of  two  joint  contractors  will  a  pay- 
ment on  joint  account  by  the  executor  of 
the  deceased  take  a  debt  out  of  the  statute, 
as  against  the  survivor.  Slaters.  Lawson, 
1  B.  &  Ad.  396.     See  Gittin  v.   Ashby,  2 

C.  &  K.  139.  See  further,  in  confirmation 
of  the  general  principle,  Rew  v.  Pettet.   1 


158 


THE   LAW   OF   PARTNERSHIP. 


[CH.    YII. 


it  now  is  universally,  as  a  statute  of  repose  and  not  of  presump- 
tion, and  as  resting  on  the  principle  that  the  courts  should  not 


A.  &  E.  196;  Pease  V.  Hirst,  10  B.  &C.122; 
Clark  V.  Hoojier,  10  Biijc?.  460  ;  rhtchuid 
V.  Draper,  1  Russ.  &  Myl.  191. 

Respecting  ackiiowledgineuts  or  prom- 
ises by  words  only,  the  question  is  ]nit  at 
rest  in  England  by  Lord  Teuterden's  act 
(9  Geo.  4,  ch.  14),  which,  after  reciting 
21  Jac.  1,  ch.  16,  and  the  Irish  act  of  10 
Car.  1,  sess.  2,  ch.  6,  declares:  "that 
where  there  shall  be  two  or  more  joint 
contractors,  or  executors,  or  administra- 
tors of  any  contractor,  no  such  joint  con- 
tractor, executor,  or  administrator,  shall 
lose  the  benefits  of  the  said  enactments, 
or  either  of  them,  so  as  to  be  chargeable 
in  respect  or  by  reason  only  of  any  written 
acknowledgment  or  promise  made  and 
signed  by  any  other  or  others  of  them." 
But,  with  respect  to  admissions  by  pay- 
ments, the  same  statute  provides  "  that 
nothing  therein  contained  shall  alter,  take 
away,  or  lessen  the  effect  of  any  payment 
of  any  principal  or  interest,  by  any  per- 
sons whatsoever,"  The  effect  of  this 
proviso  is,  to  leave  the  effect  of  past  pay- 
ment of  principal  or  interest,  by  one  of 
several  joint  debtors,  the  same  as  before 
the  passage  of  the  statute  ;  and  the  reason 
for  it  is  said  by  Chief  Justice  Tindal  in 
Wyatt  V.  Hodson,  8  Bing.  312,  to  be, 
"Because  the  payment  of  principal  or 
interest  stands  on  a  different  footing  from 
the  making  of  promises,  which  are  often 
rash  or  ill  interpreted  ;  while  money  is 
not  usually  paid  without  deliberation, 
and  payment  is  an  unequivocal  act,  so 
little  liable  to  misconstruction  as  not  to 
be  open  to  the  objection  of  an  ordinary 
acknowledgment."  Chippendale  v.  Thur- 
ston, 4  C.  &  P.  98  ;  1  Moo.  &  M.  411  ; 
Waters  v.  Tompkins,  2  C,  M.  &  R.  723. 
The  principle,  then,  being  established 
in  the  English  law,  that  an  acknowledg- 
ment by  one  of  several  joint  debtors  of 
the  existence  of  a  joint  debt  will  operate 
as  a  new  promise  by  all  to  pay,  which 
principle  is.  however,  by  statute  limited 
in  its  application  to  acknowledgments  by 
past  payments,  we  may  next  inquire 
what  is  the  effect  in  the  English  law  of  a 
payment  by  one  of  several  partners  of 
principal  or  interest  on  account  of  a  part- 


nership debt,  after  the  firm  has  been  dis- 
solved. It  seems  to  be  settled  in  England 
that  one  partner  may,  after  dissolution, 
impose  a  fresh  charge  upon  his  copartners, 
by  a  payment  of  princi[ial  or  of  interest, 
on  account  of  an  unliquidated  partnership 
debt  barred  by  the  statute  of  limitations. 
Two  reasons  seem  to  be  given  for  this 
doctrine.  In  the  first  place,  jiartners 
after  dissolution,  being  still  jointly  liable 
for  the  partnership  debts,  are  still  regarded 
as  joint  debtors,  and  therefore  within  the 
rule  of  Whitcomb  v.  Whiting.  Further- 
more, it  was  decided  in  Wood  ?\  Braddick, 
1  Taunt.  104,  that  an  admission  by  one 
of  two  pai'tners,  after  the  dissolution 
of  the  ]iartnership,  concerning  joint  con- 
tracts made  during  the  partnership,  is 
competent  evidence  to  charge  the  other 
partner.  In  Pritchard  v.  Draper,  1 
Russ.  &  Myl.  191,  199,  Lord  Chancel- 
lor Brougham  asserted  the  same  doc- 
trine ;  and  it  being  objected  that  the 
declarations  of  one  partner  after  dissolu-  , 
tion  as  to  a  fact  relating  to  partneiship 
transactions,  but  which  fact  also  took 
place  after  dissolution,  were  not  admis- 
sible evidence  against  the  other  paitner, 
he  said:  "The  partnership,  it  is  true,  had 
ceased  ;  but  so,  in  Whitcomb  v.  Whiting, 
had  the  connection  between  the  two  mak- 
ers of  the  promissory  note.  And  in  God- 
dard  v.  Ingram,  3  Q.  B.  839,  where  one 
of  several  jiartners,  after  the  dissolution 
of  his  firm  and  more  than  six  years  after 
the  incurring  of  the  original  debt,  but 
within  six  years  of  the  bringing  of  the 
action,  had  made  a  part  payment  on  ac- 
count of  it,  which  the  jury  found  to  be 
fraudulent  upon  his  copartners,  it  was 
held,  nevertheless,  that  the  payment 
barred  the  operation  of  the  statute." 

Such  seems  to  be  the  state  of  the 
English  law  upon  this  subject.  With 
respect  to  the  law  of  this  countrj',  as  we 
have  before  said,  it  seems  to  be  settled, 
generally,  and  perhaps  universally,  that 
the  statute  of  limitations  is  one  of  repose, 
and  not  one  of  presumption.  Whitcomb 
V.  Whiting,  as  above  explained  in  connec- 
tion with  the  statute  of  limitations,  has 
also  been  followed  in  many  authoritative 


§  127] 


RIGHTS    AND    DUTIES    OF   PARTNERS. 


159 


enforce  an  unpaid  debt,  if  it  were  old  and  stale,  then  the  bar  of 
the  statute  could  only  be  removed  by  a  new  promise ;  that  is,  the 
old  debt  could  not  itself  be  demanded,  but  it  was  a  good  consid- 
eration for  a  new  promise  ;  and,  if  this  were  made,  it  could  be 
enforced.  But  the  question  then  is.  Who  makes  it  ?  And  this 
will  depend  upon  whether  the  partnership  is  still  in  existence,  or 
has  been  dissolved.  If  it  still  exists,  the  partner  making  the 
promise  has  a  right  to  make  it  for  his  copartners  and  himself, 
and  it  is  then  the  promise  of  the  whole  partnership.^  But,  if  the 
])artnership  be  dissolved,  his  authority  has  wholly  gone,  and  the 
new  promise  which  he  makes  is  his  own  only.^     The  cases  are 


cases,  and  its  principle  applied  to  all 
kinds  of  acknowledgments  and  admissions, 
except  where  in  England  its  operation 
has  been  restricted  by  express  enactment. 
Thus  in  the  New  England  States,  with 
the  exception  of  New  Hampshire,  the 
doctrine  of  that  case  has  been  uniformly 
approved.  Getchell  v.  Heald,  7  Me.  26  ; 
Pike  V.  Warren,  15  Me.  390  ;  Dinsmore 
V.  Dinsmore,  21  Me.  433 ;  Shepley  v. 
Waterhouse,  22  Me.  497  ;  Martin  v.  Root, 
17  Mass.  227  ;  Cambridge  v.  Hobart,  10 
Pick.  232  ;  Ilsley  v.  Jewctt,  2  Met.  168  ; 
Wheelock  v.  Doolittle,  18  Vt.  440;  Joslyn 
V.  Smith,  13  Vt.  3.53  ;  Turner  v.  Ross,  1 
R.  I.  83  ;  Bound  v.  Lathrop,  4  Conn.  336; 
Coit  V.  Tracy,  9  Conn.  1.  So  also  in 
Virginia,  Shelton  v.  Cocke,  3  Munf.  191 
(see  Farmers'  Bank  v.  Clarke,  4  Leigh, 
603);  in  South  Carolina,  in  the  early  cases, 
Beitz  V.  Fuller,  1  McCord,  541  ;  Fisher  v. 
Tucker,  1  McCord,  Ch.  169  ;  which  are, 
however,  now  overruled  ;  in  North  Caro- 
lina, Davis  V.  Coleman,  7  Ired.  424  ;  in 
Pennsylvania,  Zent  v.  Heart,  8  Barr,  337, 
overruling  prior  case  ;  in  New  York,  in 
some  of  the  early  decisions,  which,  how- 
ever, have  since  been  overruled,  see  Smith 


V.  Ludlow,  6  Johns.  257  ;  Johnson  v. 
Beardslee,  15  Johns.  3.  The  rule  of  Whit- 
comb  V.  Whiting,  as  in  England,  has  also 
been  fre<[uently  apjdied  in  this  country  to 
the  case  of  a  joint  and  several  promissory 
note,  made  by  two  or  more  parties,  but 
by  some  of  them  only  in  the  character  of 
surety.  Hunt  v.  Bridgham,  2  Pick.  581 ; 
Sigourney  v.  Drury,  14  Pick.  387  ;  Shepley 
V.  Waterhouse,  22  Me.  497  ;  Joslyn  v. 
Smith,  Vt.  356  ;  Clark  v.  Sigourney,  17 
Conn.  511 ;  Caldwell  v.  Sigourney,  19  Conn. 
37  ;  Zent  v.  Heart,  8  Barr.  337.  And  in 
Fisher  v.  Tucker,  1  McCord  Ch.  169,  and 
Hathaway  v.  Haskell,  9  Pick.  42,  it  is 
held,  in  accoidance  with  Atkins  v.  Tred- 
gold,  and  Brandrum  i-.  Wharton,  supra, 
that,  one  of  two  joint  debtors  dying, 
neither  the  survivor  nor  the  representa- 
tives of  the  deceased  can,  as  against  each 
other,  by  their  acknowledgments,  part 
payment,  &c.,  take  the  debt  out  of  the 
statute.  See  also  Roosevelt  v.  Mark,  6 
Johns.  Ch.  266,  291,  292.  [For  the  pres- 
ent state  of  the  law  ou  this  point,  see 
post,  §  128,  n.  2.] 


1  Acknowledgment  before  dissolution.  —  Before  dissolution,  an  acknowledgment  by 
one  partner  will  bind  the  firm.  Watson  v.  Woodman,  L.  R.  20  Eij.  721,  730  (semhJe 
but  see  Goodwin  v.  Parton,  41  L.  T.  Rep.  91,  42  L.  T.  Ref>.  568)  ;  Sears  i;.  Starbird, 
78  Cal.  225,  20  Pac.  547  ;  Tate  v.  Clements,  16  Fla.  339  ;  Abrahams  v.  Myers,  40  Md. 
499  ;  Faulkner  v.  Bailey,  123  Mass.  588  (semblc)  ;  Harding  v.  Butler,  156  Mass.  34, 
30  N.  E.  168  ;  Kenniston  v.  Avery,  16  N.  H.  117  ;  Tappan  v.  Kimball,  30  N.  H.  136  ; 
Wood  V.  Barber,  90  N.  C.  76  (semble) ;  Carlton  v.  Coffin,  28  Vt.  504  ;  Walker  i;.  Wait, 
50  Vt.  668. 

2  Acknowledgment  after  dissolution. — In  America  there  is  much  confusion  in  the 
authorities  on  this  point.  The  better  view  would  seem  to  be,  that  after  dissolution  the 
power  of  a  partner  to  bind  his  copartner  has  ceased,  and  an  acknowledgment  of  a  pre- 


160  THE   LAW    OF    PARTNERSHIP.  [CH.    VII. 

very  numerous  in  which  these  questions  are  raised  ;  and  we 
endeavor  to  exhibit  in  our  notes  the  principal  authorities.     It 

existing  firm  delit,  by  a  ])artiiil  jiayiiK^iit  or  a  new  promise,  will  not,  raise  the  bar  of 
the  statute  against  the  jiartners  who  take  no  part  in  it.  Bell  v.  Morrison,  1  I'et.  351  : 
Bispham  v.  Patterson,  2  McLean,  87  ;  Cronkhite  v.  Herrin,  15  F.  R.  888  ;  Wilson  v. 
Torbert,  3  Stew.  296  ;  Myatts  v.  Bell,  41  Ala.  222  ;  Espy  v.  Comer,  76  Ala.  501  ;  Curry 
V.  White,  51  Cal.  530  ;  Sears  v.  Starbird,  78  Cal.  225,  20  Pac.  547  ;  Tate  v.  Clements, 
16  Fla.  339  ;  Kallenbach  v.  Dickinson,  100  111.  427  ;  Yandes  v.  Lefavour,  2  Blackf. 
371  ;  Kirk  v.  Hiatt,  2  Ind.  322  ;  Peirce  v.  Tobey,  5  Met.  168  ;  Sigler  v.  Piatt,  16  Mich. 
206  ;  Gates  v.  Fisk,  45  ilich.  522,  8  N.  W.  558  (semble)  ;  Mayberry  v.  Willonghby,  5 
Neb.  368  ;  Mann  «.  Locke,  11  N.  H.  246  ;  Tappan  v.  Kimball,  30  N.  H.  136  ;  Van 
Keuren  v.  Parmelee,  2  N.  Y.  523  ;  Shoemaker  v.  Benedict,  11  N.  Y.  176  ;  Payne  v. 
Slate,  39  Barb.  634  ;  Graham  v.  Selover,  59  Barb.  313  ;  Kerper  v.  Wood,  48  Oh.  St. 
613,  29  N.  E.  501  ;  Belote  v.  Wynne,  7  Yerg.  534  ;  Muse  v.  Donelson,  2  Humph.  166  ; 
Folk  V.  Russell,  7  Baxt.  591  ;  Haddock  v.  Crocheron,  32  Tex.  276  ;  Conrad  v.  Buck, 
21  W.  Va.  396. 

In  some  authorities  however  a  distinction  is  made  between  acknowledgments  made 
before  and  those  made  after  the  statutory  period  has  run.  After  the  statutory  ])eriod 
has  run,  these  authorities  hold  that  the  firm  is  not  bound,  because  to  hold  it  bound 
would  give  to  a  partner  after  dissolution  the  power  to  charge  his  copartner  with  a  new 
debt.  Merrit  v.  Pollys,  16  B.  Mon.  355  ;  EUicott  v.  Nichols,  7  Gill,  85  ;  Newman  v. 
McComas,  43  Md.  70  ;  Whitney  v.  Reese,  11  Minn.  138  ;  Steele  f.  Jennings,  1  McMull. 
297.  But  if  the  acknowledgment  is  made  by  a  partner  before  the  statute  has  run,  though 
after  dissolution  it  binds  all  the  partners.  Burr  t'.  Williams,  20  Ark.  171  ;  Austin  y. 
Bostwick,  9  Conn.  496  ;  Bissell  v.  Adams,  35  Conn.  299  ;  Beardsley  v.  Hall,  36  Conn. 
270  ;  Brewster  v.  Hardeman,  Dudley  (Ga.),  138  ;  Tillinghast  v.  Nourse,  14  Ga.  641  ; 
Parker  v.  Moore,  2  La.  Ann.  1017  ;  Carroll  v.  Gayarre,  15  La.  Ann.  671  ;  Greenleaf  v. 
Quincy,  12  Me.  11  ;  Schindel  v.  Gates,  46  Md.  604;  White  v.  Hale,  3  Pick.  291  ; 
McClurg  V.  Howard,  45  Mo.  365  ;  Merritt  v.  Day,  38  N.  J.  32  ;  Casebolt  v.  Ackerman, 
46  N.  J.  169. 

In  a  few  jurisdictions  it  has  been  held  that  even  if  made  after  the  statute  has  run, 
an  acknowledgment  by  one  partner  after  dissolution  binds  all  the  partners.  Mclntire  v. 
Oliver,  2  Hawks,  209  ;  Willis  v.  Hill,  2  Dev.  &B.  231  ;  Walton  v.  Robinson,  5  Ire. 
341  (nullified  by  statute  ;  Wood  v.  Barber,  90  N.  C.  76)  ;  Turner  v.  Ross,  1  R.  I.  88 
(semble)  ;  Beitz  v.  Fuller,  1  McC.  541  ;  Veale  v.  Hassan,  3  McC.  273  ;  Wheelock  v. 
Doolittle,  18  Vt.  440  ;  Carlton  v.  Ludlow  Woolen  Mill,  28  Vt.  504  ;  Mix  v.  Shattuck, 
50  Vt.  421  ;  Shelton  v.  Cocke,  3  Munf.  191  ;  Brockenbrough  v.  Hackley,  6  Call,  51. 

In  Pennsylvania,  it  is  held  that  an  acknowledgment  by  the  liquidatinci  jmrtner  will 
remove  the  bar  of  the  statute.  Houser  v.  Irvine,  3  W.  &  S.  345  ;  Campbell  v.  Floyd, 
(Pa.),  25  Atl.  1033.  But  when  the  acknowledgment  is  by  any  other  than  the  liqui- 
dating partner,  it  does  not  affect  copartners.  Levy  v.  Cadet,  17  S.  &  R.  126  ;  Cole- 
man V.  Fobes,  22  Pa.  156  ;  Reppert  v.  Colvin,  48  Pa.  248  ;  Wilson  v.  Waugh,  101  Pa. 
233  ;  Kauffman  v.  Fisher,  3  Grant,  302. 

If  however  the  creditor  had  no  notice  of  the  dissolution  the  acknowledgment  by  one 
partner  binds  all.  Sage  v.  Ensign,  2  All.  245;  Buxton  v.  Edwards,  134  Mass.  567; 
Kenniston  v.  Aveiy,  16  N.  H.  117  ;  Tappan  v.  Kimball,  30  N.  H.  136  ;  Clement  v. 
Clement,  69  Wis.  599,  35  N.  W.  17. 

An  individual  promise  by  one  partner  to  pay  the  debt  does  not  remove  the  bar  of 
tlie  statute  against  the  firm.  Ford  v.  Clark,  72  Ga.  760  ;  Stewart's  Appeal,  105  Pa. 
307. 

It  is  to  be  added  that,  in  a  number  of  the  States  (and  the  number  is  increasing), 
statutes  similar  to  9  Geo.  4,  ch.  14,  have  rendered  the  acknowledgment  of  one  joint 
contractor  insufficient  to  take  any  case  out  of  the  statute  of  limitations  as  to  his 
co-contractors.      Generally,  as  in  the  English  statute,  though  not  uniformly,  an  excep- 


§  128.]  RIGHTS    AND    DUTIES    OF   PARTNERS.  IGl 

will  be  seen  that  in  these  cases,  not  only  the  general  question  of 
the  authority  of  the  partner  Is  considered,  but  the  particular 
questions  which  occur  when  the  new  promise  is  made,  if  at  all, 
not  only  by  an  acknowledgment,  but,  m  the  absence  of  this,  by 
part  payment  of  the  j)rincii)al  or  of  the  interest. 

§  128.  Admissions  after  Dissolution.  —  A  similar  principle  deter- 
mines all  the  questions  raised  by  the  acts  of  one  partner.  If  the 
partnership  has  ceased,  his  authority  has  gone,  unless  he  derives 
it  from  his  power  to  settle  the  estate  as  surviving  partner,  or  in 
some  other  especial  manner.  That  is,  he  can  no  longer  make  a 
new  promise,  which  shall  be  their  promise  as  well  as  his.  But  it 
does  not  follow  that  his  admissions  and  acknowledgments,  as 
those  of  one  well  acquainted  with  the  facts,  especially  if  they  are 
against  his  interest,  should  not  be  received  as  determining  a 
question,  not  of  future  promise,  but  of  a  past  fact.  We  cannot 
but  think,  however,  that  the  true  principle  which  should  decide 
this  much-vexed  question,  must  be  this  :  After  a  dissolution, 
however  caused,  the  new  words  and  acts  of  those  who  were  part- 
ners shall  have  no  effect  upon  the  rights  or  obligations  of  their 
former  copartners,  excepting  so  far  as  these  words  and  acts 
fairly  belong  to  the  settlement  of  the  concern,  and  the  power 
which  each  partner  has  in  winding  it  up.^ 

tion  is  niadft  of  an  acknowledgment  by  part  payment.  See  Mass  Pub.  Stat.  ch.  197, 
§  17  ;  Williams  v  Gridley,  9  Met.  482  ;  Maine  Rev.  Stat  ch.  146,  §  27  ;  Sibley  v. 
Lambert,  30  Me.  253  ;  Vt.  Gen.  St.  ch.  63,  §§  23,  28  ;  Carlton  v.  Ludlow  Woolen 
Mill,  27  Vt.  496  ;  Caldwell  v.  Lawrence,  20  Ga.  94  ;  Fonte  v.  Bacon,  24  Mi.ss.  156  ; 
Briscoe  v.  Anketell,  28  Miss.  361  ;  Webster  v.  Stearns,  44  N.  H.  498  ;  Griswold  v. 
Haven,  25  N.  Y.  595.  Such  a  statute  has  been  passed  in  Michigan.  Gates  v.  Fisk, 
45  Mich.  522,  8  N.  W.  558.  A  debj;  may  become  barred,  by  the  statute  of  limitations, 
as  to  one  member  ot  a  partnership  in  the  State,  and  not  as  to  those  out  of  the  State. 
Spaulding  v.  Ludlow  Woolen  Mill,  36  Vt.  150. 

Of  course,  any  partner  who  authorizes  or  ratifies  the  acknowledgment  is  bound  by 
it.    Wilson  V.  Waugh,  101  Pa.  233. 

This  (question  has  been  held  to  be  governed  by  lex  fori ;  consequently  an  acknowL 
edgment  made  by  a  partner  in  a  juri.sdiction  where  it  is  held  to  bind  the  firm  will  not 
aft'ect  the  limitation  in  another  jurisdiction  where  it  is  held  not  to  bind  the  firm. 
Kerper  v.  Wood,  48  Oh.  St.  613,  29  N.  E.  501. 

See  a  very  valuable  note  upon  this  subject,  Ames,  Cas.  Part.  618. 

^  Admissions  after  dissolution,  —  The  authorities  upon  this  ]5oint  are  in  hopeless 
conflict.  One  line  of  decisions  follows  the  case  of  Wood  v.  Braddick,  1  Taunt.  104. 
This  was  an  action  brought  to  recover  from  the  defendant  the  [)roceeds  of  certain  lin- 
ens, which  the  bankrupts,  in  the  year  1796,  had  consigned  for  sale  in  America,  as  the 
jplaintiffs  alleged,  to  the  defendant,  jointly  with  one  Cox,  who  was  then  his  partner, 
but,  as  the  defendant  contended,  to  Cox  only.  The  defendant  pleaded  the  general 
issue,  and  the  .statute  of  limitations.  At  the  trial  at  Guildhall,  before  Jlansfield,  C. 
J.,  the  plaintiffs  i>roduced  in  evidence  a  letter  from  Cox,  dated  the  24th  of  June,  1804, 
stating  a  balance  of  919/.  to  be  then  due  to  the  bankiupts  u]>on  this  consignment.  It 
was  in  proof  that  on  the  30th  of  July,  1S02.  Braddick  &  Cox  dissolved  their  partner- 

11 


162  THE    LAW    OF   PARTNERSHIP.  [CH     VII, 

§  129.  Admissions  before  Dissolution.  —  If  the  partnership  exists, 
the  question  then  is,  Do  the  act  or  the  words  refer  to  the  business 

ship,  as  from  the  17th  of  November,  1800.  Cockell  &  Lens,  Sergeants,  objected,  that 
this  letter,  being  written  after  the  dissolution  of  the  partnership,  was  not  aihnissible 
evidence  to  charge  Braddick.  The  Chief  Justice  overruled  the  objection,  but 
reserved  the  point ;  and  the  jury,  being  of  opinion  that  the  agency  was  undertaken  by 
Cox  on  the  iiartuersliip  account,  found  a  verdict  for  the  plaintiff.  Mansfield,  C.  J.  : 
*'  Clearly  the  admission  of  one  partner,  made  after  the  partnership  has  ceased,  is  not 
evidence  to  charge  the  other,  in  any  transaction  which  has  occurred  since  their  separa- 
tion ;  but  the  power  of  partners,  with  respect  to  rights  created  pending  the  partner- 
ship, remains  after  the  dissolution.  Since  it  is  clear  that  one  partner  can  bind  the 
other  during  all  the  partnership,  upon  what  principle  is  it,  that,  from  the  moment 
when  it  is  dissolved,  his  account  of  their  joint  contracts  should  cease  to  be  evidence  ; 
and  that  those  who  are  to-day  as  one  person  in  interest  should  to-morrow  become 
entirely  distinct  in  interest  with  regard  to  past  transactions  which  occurred  while  they 
were  so  united  ?" 

Heath,  J.:  "  Is  it  not  a  very  clear  pro))osition,  that  when  a  partnership  is  dissolved, 
it  is  not  dissolved  with  regard  to  things  i)ast,  but  only  with  regard  to  things  future  ? 
With  regard  to  things  past,  the  partnership  continues,  and  always  must  continue." 

The  i)rincii)le  of  Wood  v.  Biaddick  is  affirmed  in  Pritcliard  v.  Draper,  1  Russ.  & 
M.  191,  where  it  was  held,  that  the  declaration  of  one  of  two  partners,  that,  subse- 
quently to  dissolution,  a  debt  due  to  the  jiartnership  had  been  paid,  was  admissible  as 
evidence  against  the  other  partner.  See  Goddard  v.  Ingram,  3  Q.  B.  839;  Lacy  r. 
M'Xeile,  4  Dow.  &  R.  7,  9.  See  also  Parker  v.  Morrell,  2  C.  &  K.  599,  where  it  was 
held,  that  the  answer  in  chancery  of  one  who  had  been  a  partner  in  a  firm,  but  who 
had  retired  from  the  lirm  and  ceased  to  have  any  interest  in  it  ])efore  the  commence- 
ment of  the  suit,  is  not  admissible  in  evidence  against  the  continuing  partners  of  the 
firm,  although  it  relates  to  transactions  which  occurred  with  the  hrm  at  the  time 
when  the  retired  partner  was  a  member  of  it.  The  doctrine  of  Wood  v.  Braddick  is 
maintained  in  many  American  cases.  Reimsdyk  v.  Kane,  1  Gall.  630,  636  {scmbU); 
Austin  V.  Bostwick,  9  Conn.  496  :  Taylor  v.  Hillyer,  3  Blackf.  433  (scmblc);  Kirk  v. 
Hiatt,  2  Ind.  322  ;  Parker  i\  Merrill.  6  Me.  41;  Cady  v.  Shepherd,  11  Pick.  400  ;  Bridge 
V.  Gray,  14  Pick.  5.5  ;  Vinal  v.  Burrill,  16  Pick.  401;  Gay  v.  Bowen,  8  Met.  100  ;  Ide 
V.  Ingraliam,  5  Gray,  106  ;  Buxton  v  Edwards,  134  Mass.  567  ;  Pennoyer  r.  David,  8 
Mich.  407  ;  Mann  v.  Locke,  11  N.  H.  246  ;  Rich  v.  Flanders,  39  N.  H.  304  ;  Merritt 
V.  Day,  38  N.  J.  32  ;  McElroy  v.  Ludlum,  32  N.  J.  Eip  828  (but  see  Flanagin  r. 
Champion,  1  Green  Ch.  51);  Myers  v.  Standart,  11  Oh.  St.  29  ;  Feigley  v.  Whitaker, 
22  Oh.  St.  606;  Fripp  i).  Williams,  14  S.  C.  502  (see  the  earlier  cases,  Simpson  v. 
Geddes,  2  Bay,  533  ;  Kendrick  v.  Campbell,  1  Bail.  522  ;  Meggett  v.  Finney,  4 
Strobh.  220);  Woodworth  r.  Downer,  13  Vt.  522;  Loomis  v.  Looniis,  26  Vt.  198; 
Garland  v.  Agee,  7  Leigh,  362. 

In  oi)position  to  this  view  of  the  power  of  one  partner  after  dissolution,  it  is  held 
by  weighty  authorities  in  this  country,  that,  when  a  partnership  ceases  to  exist,  the 
power  of  each  partner  wholly  ceases  also  ;  so  that,  unless  he  have  special  authority, 
his  acts,  declarations,  &c.,  even  when  they  relate  to  past  partnership  transactions,  are 
utterly  inadmissible  as  against  his  firm.  Judge  Story,  who  takes  this  view,  says  it 
seems  difficult  upon  principle  to  perceive  how  the  acts,  declarations,  &c.,  of  one  jmrt- 
ner  after  dissolution  can  be  binding  upon  his  partnership  "any  more  than  the  decla- 
ra'ions,  or  acts,  or  acknowledgments  of  any  other  agent  of  the  partnership  would  be, 
after  his  agency  had  ceased.  In  the  latter  case,  they  are  constantly  held  inadmissible 
by  the  courts  of  common  law,  upon  grounds  which  seem  absolutely  iriesistible." 
Story  on  Part.  §  323.  Bell  v.  Morrison,  1  Pet.  351.  373  (semhle):  Thompson  v. 
Bowman,  6  Wall.  316  ;  Bis]>ham  v.  Patterson,  2  McLean,  87  :  Barringer  v.  Sneed,  3 
Stew.  201;  Demott  v.  Swaim,  5  Stew.  &  P.  293;  Burns  v.  McKenzie,  23  Cal.  101;  Miller  ». 


129.] 


RIGHTS    AND    DUTIES    OP   PARTNERS. 


163 


an 


of  the  partnership  ?  If  so,  it  binds  the  firm,  {q)  Thus, 
ahnission,  by  one  partner  (the  partnership  or  joint  liability  hav 
ing  been  proved  or  admitted),  of  a  fact  bearing  on  the  issne  of  a 
case  at  bar,  is   admissible  evidence,  (r)   The  partnership  being 


(7)  Thus  Abbott,  G.  J.,  in  Saiidilands 
V.  Marsh,  2  U.  &  Aid.  678  :  "  But  the 
true  coiistructiou  of  the  rule  is  this,  that 
the  act  and  assurance  of  one  partnei',  made 
with  reCerence  to  business  transacted  by 
the  firm,  will  bind  all  the  partners."  Rapp 
V.  Latham,  2  15.  &  Aid.  795,  801  ;  Lacy  v. 

M'Neile,  4  Dow.  &  K.  7.     See  also v. 

Layfiuld,  1  Salk.  292,  and  French  f.  Rowe, 
15  Iowa,  563. 

(r)  The  declarations  of  one  partner  are 
of  course,  as  a  general  rule,  admissible  in 
evidence,  only  when  they  are  admissions, 
and  are  supposed  to  have  been  made 
acrainst  the  interests  of  the  party  and  of 
his  firm.  Independently  of  statutes,  they 
are  comjietent  to  charge,  but  not  to  exon- 
eratfs  the  partnershii).  Hence,  in  a  suit 
against  A.  &  B.  as  partners,  the  declara- 
tions of  A.  are  inadmissible  in  behalf  of 


B.  to  disprove  the  partnership  alleged. 
Young  V.  Smith,  25  Mo.  341  ;  Clark  v. 
Huffaker,  26  Mo.  264.  See  Danforth  v. 
Corter,  4  la.  230. 

[So  where  the  defendant  had  a  claim 
against  two  members  of  a  firm,  and  they 
repiesented  themselves  as  the  only  part- 
ners ;  the  defendant,  having  dealt  with 
the  firm,  could  not  on  account  of  '  the 
representation  set  off  against  his  debt  to 
the  firm  the  debt  owed  to  him  by  the  two 
j)artners.  Rush  v.  Thompson,  112  Ind.  158, 
13  N.  E.  665.] 

But  before  one  partner's  acknowledg- 
ments can  thus  be  admitted  to  attect  others 
as  copartners,  a  joint  liability  must  be 
shown.  A  priina  facie  case  of  partner- 
ship, at  least,  must  be  made  out.  Nicliolls 
V.  Dovvding,  1  Stark.  81  ;  Gray  v.  Hodson, 
I  Esp.  135  ;  Grant  v.  Jackson,  Peake,  203  ; 


Neimerick,  19  111.  172  :  Winslow  v.  Newlan,  45  111.  145  ;  Walker  v.  Duberry,  1  A. 
K.  Marsh.  189  ;  Craig  v.  Alverson,  6  J.  J.  Marsh.  609  ;  Bentley  v.  White,  3  B,  Mon. 
263;  Daniel  0.  Nelson,  10  B.  Mon.  316;  Hamilton  v.  Summers,  12  B.  Mon.  11;  Lambeth 
v.  Vawter,  6  Kob.  (La.)  127  ;  Conery  v.  Hays,  19  La.  Ann.  325  ;  Owings  v.  Low,  5 
Gill  &  J.  134  ;  National  Bank  of  Commerce  v.  Meader,  40  Minn.  325,  41  N.  W. 
1043  ;  Maxey  v.  Strong,  53  Miss.  280  (but  see  Curry  v.  Kurtz,  33  Miss.  24);  Brady  v. 
Hill,  1  Mo.  315  ;  Pope  v.  Risley,  23  Mo.  185  ;  Dowzelot  r.  Rawlings,  58  J\Io.  75  ; 
Hackley  v.  Patrick,  3  Johns.  536  ;  Walden  v.  Sherburne,  15  Johns.  409  ;  Hopkins  v. 
Banks,  7  Cow.  650 ;  Gleason  v.  Clark,  9  Cow.  57  ;  Baker  v.  Stack^wole,  9  Cow.  420  ; 
Mercer  v.  Sayer,  Anth.  N.  P.  162  ;  Van  Keuren  v.  Parmelee,  2  N.  Y.  523,  530  ; 
Nichols  i\  White,  85  N.  Y.  531 ;  Bank  of  Vergennes  v.  Cameron,  7  Barb.  143  ;  Tas- 
.sey  r.  Church,  4  W.  &  S.  141  ;  Hogg  v.  Orgill,  34  Pa.  344;  Crumless  v.  Sturgess,  6 
Heisk.  190;  Hawkins  u.  Lee,  8  Lea,  42;  Kootes  v.  Wellford,  4  Munf.  215.  After  a 
partner  has  ceased  to  have  any  interest  in  the  firm,  his  declarations  charging  the  firm 
cannot  be  received  against  his  copartner  ;  being  realh'  in  his  own  interest,  not  against 
it.  So  the  admission  of  a  partner  after  a  discharge  in  bankruptcy  cannot  be  used 
against  a  firm.  Parker  v.  Morrell,  2  Ph.  453,  2  C.  &  K.  599  ;  Grant  v.  Jackson,  Peako 
N.  P.  203.  P>ut,  if  a  partner  has  not  received  his  certificate  of  discharge,  his  admission 
will  bind  his  co[>artners,  though  made  after  his  bankrujitcy.  Grant  v.  Jackson,  Peaki^, 
203.  See  Boyce  v.  Watson,  3  J.  J.  Marsh.  498  ;  Howard  v.  Cobb,  3  Daj',  309  ; 
3Iartin  v.  Root,  17  Mass.  227.  Nor  can  the  admission  of  a  partner  after  he  has  as- 
signed  all  his  interest  in  the  firm  be  received  to  charge  the  firm.  Jeffries  v.  Castleman, 
75  Ala.  262  ;  Gillighan  v.  Tebbetts,  33  Me.  360;  Hatheway's  A])pea'i,  52  Mich.  112. 
Whether  the  fact  that  the  declarations  were  made  to  one  who  had  no  notice  of  dis- 
solution would  affect  the  question  is  not  clear.  It  is  held  in  New  York  that  it  would 
not.  Brisban  v.  Boyd,  4  Paige,  17;  Williams  v.  Manning,  41  How.  Pr.  454;  Piingle 
V.  Leverich,  97  N.  Y.  181.  But  the  opposite  opinion  has  been  held.  Spears  v  Toland, 
1  A.  K.  Marsh.  203 ;  Myers  v.  Standart,  11  Oh.  St.  29. 


164 


THE    LAW    OP    PARTNERSHIP. 


[CH.  VII. 


proved  aliunde^  entries  of  account  made  by  one  partner  during 
the  existence  of  the  firm  are  admissible  evidence  to  cliarge 
all.  {f)  So  notice  or  knowledge  of  any  one  partner  is  notice  or 
knowledge  affecting  all  the  rest,  or  rather  the  partnership  as  a 
whole  ;  (m)  and  such  notice,  even  if  coupled  with  a  demand,  as 


Reimsa.vk  v.  Kane,  1  Gall.  635  ;  Teller  v. 
Muir,  2  Peimiiigtoii,  548  ;  Robbiiis  v. 
■Willaid,  6  Pick.  464  ;  Corps  v.  Robinson, 
2  Wash.  L'.  C.  3S8  ;  Harris  v.  Wilson,  7 
Wend.  57  ;  Buekiiani  v.  Barnain,  15  Conn. 
67  ;  Bispham  v.  Patterson,  2  McLean,  88  ; 
Flanagin  v.  Champion,  1  Green,  Ch.  51  ; 
Grafton  Bank  v.  Moore,  13  N.  H.  99  ; 
Dutton  u.  Woodman,  9  Cush.  255  ;  Alcott 
V.  Strong,  9  Cush.  323.  And  admissions 
by  a  party  that  he  is  a  partner  with  others 
bind  himself  only.  They  are  not  competent 
evidence  of  partnership  to  all.  Ante,  §  78. 
(/)  Walden  v.  Slierbnrne,  15  Johns. 
409.  See  Chami)lin  v.  Tilley,  3  Day,  307  ; 
Noyes  v.  Bruniau.x,  3  Yeates,  30.  [F-5ryee 
V.  Joynt,  63  Cal.  375.]  So,  if  two  part- 
ners are  garnishees,  and  one  answers  for 
both  and  acknowledges  a  joint  indebted- 
ness, judgment  may  be  entered  against  the 
tiiiii.  Anderson  i;.  Wanzer,  5  How.  (Miss.) 
587.  See,  fuither,  in  illustration  of  the 
general  rule,  Vicary's  Case,  Bac.  Abr.  tit. 
"  Evidence,"  623  ;  Hodenpyl  v.  Vinger- 
hold,  Chitty  on  Bills,  489,  note  ;  Cheap  v. 
Cramond,  4  B.  &  Aid.  663  ;  Lucas  v.  De 
la  Cour,  1  M.  &  S.  249  ;  Lacy  v.  M'Neile, 
4  Dow.  &  R.  7  ;  Rex  v.  Inhabitants  of 
Hardwick,  11  East,  578,  589  ;  NichoUs  v. 
Dowding,  1  Stark.  81  ;  Odiorne  v.  Maxcy, 
13  Mass.  182,  15  Mass.  44;  Bridge  v. 
Gray,  14  Pick.  61  ;  Bound  v.  Lathrop,  4 
Conn.  336  ;  Fisk  v.  Copeland,  1  Over. 
383 ;  Reimsdyk  v.  Kane,  1  Gall.  635  ; 
Williams  v.  Hodgson,  2  H.&  J. 474  ;  Hart  v. 
Palmer,  12  Wend.  523  ;  Cook  v.  Castner, 
9  Cush.  266  ;  Fickett  v.  Swift,  41  Me.  65  ; 
Foil  V.  McArthur,  31  Ala.  26  ;  Sniitha  v. 
Cureton,  31  Ala.  652  ;  Kahn  v.  Boltz,  39 
.Ala.  66.  It  makes  no  diH'erence,  as  to  the 
binding  force  of  the  declarations  of  any 
one  partner,  that  some  of  the  firm  are 
dormant,  Ka.skaskia  Bridge  Co.  i\  Shan- 
non, 6  111.  15,  25  ;  see  Lea  v.  Guice,  13 
Sm.  &  M.  656  ;  Corps  v.  Robinson,  2 
Wash.  C.  C.  388  ;  Allen  v.  Owens,  2 
S|>eers,  170  ;  nor  that  the  partner  making 
admissions  or  acknowledgments  respecting 


joint  affairs  is  not  a  party  to  the  suit  in 
which  they  are  offered  as  evidence,  see 
McCutchin  v.  Bankston,  2  Ga.  244,  247  ; 
Thvvaites  v.  Richardson,  Peake,  16.  But 
if  a  partnership  is  established  between 
co-defendants,  and  the  admissions  of  one 
are  offered  in  evidence  to  charge  all,  the 
copartners  may  show  that  such  admissions 
relate  to  other  than  the  partnership  con- 
cerns, Jaggers  v.  Binnings,  1  Stark.  64  ; 
or  to  transactions  antecedent  to  the 
partnership,  Cutt  v.  Howard,  3  Stark.  3  ; 
or  that  they  were  made  by  mistake,  Ridg- 
way  V.  Philip,  1  Cr.  M.  &  R.  415.  And  if 
a  partner  make  a  purchase,  appareiitlj' 
for  himself,  not  mentioning  his  firm,  and 
afterwards  declare  that  he  made  the  pur- 
chase for  the  use  of  the  partnership,  such 
declaration,  by  itself,  is  not  admissible  to 
charge  the  fiim  for  the  price  of  the  thing 
purchased,  on  the  ground  of  interest  in 
the  party  making  it.  White  v.  Gibson,  11 
Ired.  283. 

(u)  As  in  the  case  of  notice  by  or  to 
one  partner  in  legal  proceedings.  If  one 
of  several,  jointly  interested  in  a  cargo, 
effects  an  insurance  for  the  benefit  of  all, 
he  may  give  notice  of  abandonment  for 
all.  Hunt  ?'.  Royal  E.xchange  Ass.  Co.,  5 
M.  &  S.  47.  As  one  partner  may  bind  his 
firm  by  giving  notice,  so  he  may  by  receiv- 
ing it,  always  supposing  the  transaction  to 
be  bona  fide.  Lord  EUenborough,  C.  J., 
in  Bignold  r.  Waterhouse,  1  M.  &  S.  259  ; 
Alderson  v.  Pope;  1  Camf>.  404,  n.  ;  Ex 
parte  Waithman,  2  Mont.  &  A.  364.  Thus 
if  several  joint  defendants,  makers  of  a 
promissory  note,  suffer  judgment  by 
default,  service  of  a  rule  nisi,  to  compute 
the  principal  and  interest  due  on  the  note, 
made  upon  one,  is  service  on  all  ;  for  quoad 
hoc  they  are  partners.  Figgins  v.  Ward, 
2  Cr.  &  M.  424  ;  Carter  v.  Southall,  3  iM. 
&  W.  128.  See  further  Mayhew  v.  Fames, 
1  C.  &  P.  550  ;  Lansing  v.  M'Killup,  7 
Cow.  416  ;  Powell  v.  Waters,  8  Cow.  670  ; 
Gilly  V.  Singleton,  3  Litt.  249  ;  Fitch  v. 
Stamps,    6    How.  (Miss.)    487;  Hay  ward 


§  130.]  RIGHTS   AND    DUTIES   OF   PARTNERS.  165 

a  notice  to  quit  certain  premises,  (v)  or  a  demand  on  \<'hich 
trover  is  to  be  founded,  {w)  may  be  given  or  made  by  one  partner 
on  his  general  authority.  Almost  the  whole  law  on  this  subject 
resolves  itself  into  tlie  rule,  that  the  representations  or  misrepre- 
sentations of  a  partner  are  binding  on  the  firm,  provided  they  are 
made  in  the  course  of,  and  relate  to,  and  arc  material  to,  the  trans- 
action of  the  business  of  the  firm.^ 

§  130.  Povrex  to  vary  Business  of  Partnership.  —  From  the  same 
principle,  that  the  power  of  each  partner  grows  out  of  the  business 
of  the  firm,  and  is  measured  by  it,  another  rule  is  drawn,  namely, 
that  the  business  of  a  partnership  is  not  to  be  materially  varied, 
except  by  consent  of  the  other  partners.  It  cannot  be  changed 
as  to  its  object  and  character,  nor  materially  enlarged  beyond  its 
originally  intended  scope ;  nor  can  a  new  branch  of  business  be 
taken  up  and  added  to  the  old.     For  the  very  first  thing  for  a 

V.    Harmon,    17  111.   477  ;    Miser  v    Tro-  v.  March,  22   Me.   189.  190      And  notice 

vinger,  7  Ohio  St.  281.     In   like  manner,  to  the  surviving  partner  ot  the  dishonor  of 

notice    to   one    ot  two   or   nioie   j)artners  a  note  indorsed  b}'  the  firm  is  sufficient  to 

of  a  prior  unrecoided  deed  is  notice  to  all  bind  the  estate   of  the  deceased   jiartner, 

the  paitners,  and  will  render  void  a  subse-  though  the  holder  knew  ot  the  death  of 

quent  deed  of  the  same  land  to  all  the  the  deceased  partner  before  the  note  became 

partners.      Barney   v.  Cuiiitr,  1  U.  Chip.  due.    Dabuey  ".  Stidger,  4  Sm.  &  Jl.  749. 

315.     See  Watson  v.  Wells,  5  Conn.  468.  See  Cocke  v.  Hank  of  Tennessee,  6  Humpli. 

If  a  bill  accepted   by  a  firm  is  dishonored  51.      But  persons  wiio  are  joint  indoisers 

by  one   partner,    notice   of   the   dishonor  of   a   note  or  bill,  but   are   not  partners, 

need  not  be  given  to  the  other  partners ,  must  be  severally  notified  of  its  dishonor  ; 

and,  if  the   drawer  of  a  bill   be  a   part-  and,  without  notice  to  both,  it  seems  that 

ner     in    the    house    upon    which     it    is  neither  can    be  holden.    Shepard  v.  Haw- 

diawn,  proof  of   notice  to  the  drawer  of  ley,   1  Conn.  368  ;  Bank  of  Chenango  v. 

the  dishonor  is  not  necessary.     Porthouse  Root,   4   Cow.    126  ;    Dubney  i;.    Stidger, 

V.  Parker,  1    Camp.  82  ;    Gowan   v.  Jack-  su])ra.     See  1  Pars.  Notes  and  Bills,  502 ; 

son,  20   Johns.  176  ;   Bouldin   v.  Page,  24  post,,  §  146,  anf.e,  §  101. 
Mo.  595.       Farther,  if  a  note  indorsed  by  (v)   Doe  d  Eliot  v.  Halme,  2  ilan.  &  E. 

a  firm  becomes  due  after  its  drssolution,  433.      Otherwise,   if  the  joint  lesees   are 

notice  of  dishonor  given  to  one  of  the  late  not     partners.     Goodtitle    v.    Woodward, 

partners  will  be  sufficient,   if  the  holder  3  B   &  Aid.  689, 
has  not  been  notified  of  tlie  dissolution.  (ic)  Ste  ante  ;   §  105  and  note. 

Kott  V.  Downing,  6  La.  684.    See  Darling 

1  Upon  this  proposition  see,  in  addition  to  the  authorities  quoted,  W^ood  r.  Brad- 
dick,  1  Taunt.  104  ;  AVeed  y.  Kellogg,  6  McLean,  44  ;  Mnnson  v.  Wickwire,  21  Conn. 
513  ;  Wiley  v.  Griswold,  41  la.  375  ;  Dujnerris  v.  HallLsay.  27  La.  Ann.  132  ;  Hariy- 
.man  v.  R.)berts,  52  Md.  64  ;  Smith  v.  Collin.s,  115  Mass.  388  ;  Coleman  v.  Pearce,  26 
Minn.  123,  1  N.  W.  846  ;  Cady  r.  Kyle,  47  Mo.  346  ;  Rucktnan  v.  Decker,  23  N.  J. 
Ecp  233  ;  McKee  v.  Hamilton,  33  Oh.  St.  7  ;  Irby  v.  Brigham,  9  Humph.  750  ;  West- 
ern Assur.  Co.  V.  Towle,  65  Wis.  247.  The  representations  must  be  in  the  usual  course 
of  business.  Boor  v.  Lowrey,  103  Iiid.  468.  And  where  one  partner  declared  that  cer- 
tain property  belonged  to  his  copartner  individually  this  did  not  deprive  the  firm  of  the 
property  ;  and  one  who  in  reliance  on  the  declaration  bought  it  at  a  sheriffs  sale  as 
l>roperty  of  the  partner  could  not  hold  it  as  against  the  firm.  Williams  c.  Lewis,  115 
Ind.  45,  17  N  E,  262. 


166 


THE   LAW   OF    PARTNERSHIP. 


[CH.    VII. 


partnership  to  do  is  to  determine  what  business  it  shall  transact  ; 
that  must  be  the  determination  of  all,  and  remains  in  force  until 
changed  by  all.  (x)  At  the  same  time  there  may  be  an  apparent 
exception  to  this  rule  in  relation  to  third  parties.  If  a  partner 
enter  into  a  new  branch  of  business  in  the  name  of  the  firm,  but 
without  the  authority  of  the  firm,  and  this  is  unprofitable,  the 
firm  —  if  they  have  in  no  way  adopted  or  ratified  the  transactions 
—  may  refuse  to  participate  in  the  loss,  and  cast  the  whole  on 
that  partner,  treating  it  as  his  several  business.  And  any  third 
party  dealing  with  that  partner,  and  knowing,  or  having  sufficient 
means  of  knowing,  that  he  goes  beyond  the  business  of  the  firm 
and  transcends  his  rights,  can  look  only  to  him  ;  for  the  firm 
may  then  re{)udiate  this  new  business  as  well  to  this  third  person 
as  to  the  partner,  (y)     But  it  may  happen  that  this  new  business 


(x)  Tlie  lea<liiig,  and  perhaps  the  only 
case  directly  bearing  upon  the  proposition 
ol'  the  text  is  tliat  of  Natustdi  v.  Irving, 
cited  in  the  Appendix  to  Govv  on  Part. 
p.  398.  There  a  large  number  ot  persons 
had  united  in  forming  a  joint-stock  com- 
pany, for  the  purpose  of  effecting  iire  and 
life  assurances.  The  plaintiff,  a  share- 
holdei-  in  the  company,  on  behalf  of  him- 
self and  the  other  sharelioldeis,  filed  a  bill 
in  equity  against  the  piesident  and  direc- 
tors of  said  com})any  ;  praying,  amongst 
other  things,  that  they  might  be  restrained 
from  employing  the  capital,  credit,  &c., 
of  the  said  company  in  the  business  of 
marine  insurances.  Lord  Chancellor  Eldon, 
in  giving  his  opinion  upon  the  facts,  put 
the  following  case  ;  "  If  six  persons  join  m 
a  partnership  of  lile  assurance,  it  seems 
clear  that  neither  the  majority,  nor  any 
select  part  of  them,  nor  five  out  of  the  six, 
could  engage  that  partnership  in  marine 
insurances,  unless  the  contract  of  part- 
nership expres.sly  or  impliedly  gave  that 
power  ;  because  if  this  was  otherwise,  an 
individual  oi-  individuals,  by  engaging  in 
one  specified  concern,  might  be  implicated 
in  any  other  concern  whatever,  however 
ditTerent  in  its  nature,  against  his  consent. 
But  if  a  pait  of  the  six  openly  and  pub- 
licly professed  their  intention  to  engage 
the  partnership  in  another  concern,  and 
clearly  and  distinctly  biought  this  to  the 
knowledge  of  one  or  more  of  the  other 
partners ;  and  such  one  or  more  of  the 
other  partners  could  be  clearlv  shown  to 
have  acquiesced  in  such  intention,  and  to 


have  permitted  the  other  partners  to  have 
entered  ui)on  and  to  have  engaged  them- 
selves and  the  body  in  such  new  projects, 
and  thereby  to  have  placed  their  jjartners, 
so  engaged,  m  difficulties  and  embarrass- 
ments, unless  they  weie  permitted  to  jno- 
ceed  in  the  farther  execution  of  such 
projects,  — if  a  court  of  equity  would  not 
go  the  length  of  holding  that  such  con- 
duct was  consent,  it  would  scarcely  think 
parties  so  conducting  themselves  entitled 
to  the /estiniu) I.  remcdiuni  of  injunction." 
These  })rinciples  being  applicable  as  well 
to  a  jiartnership  of  six  hundred  as  to  one 
of  six,  his  lordship  said  that  ''  the  court 
would  restrain  particular  members  of  those 
bodies  from  engaging  other  members  in 
projects  in  which  they  have  not  consented 
to  be  engaged,  or  the  engaging  in  which 
they  have  not  encouraged,  assented  to, 
em])owered,  or  acquiesced  in,  expressly  or 
tacitly,  so  as  to  make  it  not  equitable 
that  they  should  seek  to  restrain  tiiem." 
It  wiis  further  considered  that  an  offer  to 
return  to  the  plaintifl' in  this  suit  his  cap. 
ital  with  interest;  or  to  indemnify  \\\n\ 
against  losses  from  transactions  outsidi* 
the  specified  purposes  of  the  institution, 
or  the  fact  that  the  plaintiff  could  sell  his 
shares  for  more  than  he  gave  for  them,  — 
that  any  or  all  these  circumstances,  did 
not  affect  his  right  to  hold  his  associates 
to  the  original  business  of  the  partnership 
and  to  prevent  them  by  injunction  from 
transgressing  its  reasonable  limits.  See 
Kean  v.  Johnson,  1  Stock.  401. 

(//)  See  cmlc,  §  85,  to  the  point  that 


§  131.]  RIGHTS    AND    DUTIES    OF   PARTNERS.  167 

has  nothing  in  itself  to  distinguish  it  from  the  general  business  of 
tlie  (irni,  and  that  the  third  person  had  no  notice  that  it  was  so 
distinguished ;  then  he  will  hold  the  firm,  and  on  the  same 
ground  on  which  he  would  be  unaffected  by  any  private  stipula- 
tion or  limitations  of  the  firm  not  made  known  to  him.  (z)  ^ 


SECTION  III. 

POWER   OF    ONE    PARTNER    TO   ISSUE   NEGOTIABLE    PAPER. 

§  131.  Power  to  issue  Negotiable  Paper.  —  The  whole  doctrine 
of  negotiable  paper,  so  far  as  it  differs  from  the  common  law  of 
contracts,  is  derived  from  the  law-merchant.  The  law  of  partner- 
ship, as  we  have  seen,  has  no  other  source.  And  when  they  meet, 
as  in  the  powers  of  partners  to  make,  indorse,  receive,  or  other- 
wise deal  with  negotiable  paper,  for  the  partnership,  we  have  a 
twofold  reason  for  solving  the  question  which  this  topic  presents, 
by  the  law-merchant,  as  that  has  been  established  by  adjudica- 
tion, or  by  tiiat  usage  of  merchants  which  is  the  foundation  of  the 
law-merchant.  It  was  established,  as  long  ago  as  the  reign  of 
William  III.,  that,  "■  by  the  custom  of  England,  when  there  are 
two  joint  traders,  and  one  accepts  a  bill  drawn  on  both,  for  him 
and  i)artner,  it  binds  both,  if  it  concerns  the  trade.' '  (a)  The 
same  doctrine  has  also  been  always  applied  both  to  the  making 
and  to  the  indorsement  of  bills  of  exchange  and  promissory  notes, 
as  well  in  law  as  in  equity .^  "  In  drawing  and  accepting  bills 
of  excliange,  it  never  was  doubted  but  that  one  partner  might 
bnid  the  i-est."  (6) 

the  nature  of  the  particular  business  of  a  225.     A  partnership  is  not  bound  by  the 

firm   is  generally  notice  to  the  world  of  acts  of  another  partnership  having  a  com- 

the  limitations  thereby  put  upon  the  power  nion  member,  unless  it  authorizes  or  rat- 

of  each  partner ;  and,  cousequently,  that  ifies  such  acts.     Cobb  v.  Illinois   Central 

persons  dealing  with  a  partner  in  matters  R.  R.  Co.,  38  Iowa,  601. 

beyond  the  scoi)e  of  that  particular  busi-  (z)  See  Barnley  v.  Rice,  IS  Tex.   481. 

ness  cannot  charge  the  partnership  there-  (n)   Pinkney   v.   Hall,  1    Salk.    126,   1 

on,  without  proof  of  that  partner's  special  Ld.  Raym.  175. 

authority.     Guillou  v.  Peterson,  9  Phila.  (/<)  Lord  Kenyon,  in  Harrison  v.  Jack- 

1  Defendant  sold  the  good-will  of  a  certain  business  to  plaintiff,  and  agreed  not  to 
engage  directly  or  indirectly  in  the  same  business  for  twenty  years.  Defendant  then 
formed  a  copartnership  with  a  third  Jtarty  for  carrying  on  a  business  within  the  geneial 
scope  of  which  the  forliidden  business  lay.  Defendant's  partner,  without  the  knowl- 
edge of  defendant,  entered  upon  the  forbidden  business  on  behalf  of  the  firm.  It  was 
held  that  defendant's  contract  was  broken.     Congdon  v.  Morgan,  13  S.  C.  190. 

2  One  partner  who  makes  a  note  in  the  course  of  business  binds  the  firm.     Wagner 


1G8  THE    LAW    OF    PARTNERSHIP.  [CH.    VII. 

§  132.  Authority  to  use  Firm  Name  presumed. —  The  power  of 
each  partner  to  put  the  name  of  the  firm  to  negotiable  paper  is  so 
universally  implied  from  the  very  existence  of  the  partnership, 
that  stipulations  among'  the  partners  that  one  or  more  of  them 
shall  not  have  this  right  will  not  affect  third  parties,  unless  made 
known  to  them  ;  and  this  is  true  whether  all  the  partners  be 
known  or  whether  some  be  unknown  and  dormant,  (c)     Nor  is  it 

son,  7  T.  R.  207.    See  Auou.,  Styles,  370  ;  Lewis,    13    Siu.    &   M.    226  ;    Crozier    v. 

Smith  V.  Jarves,  2  Ld.  Kayni.  1484  ;  Lane  Kirker,  4  Tex.  252.     On  the  other  hand, 

V.  Williams,  2  Vein.  277  ;  Smith  v.  Baily,  if  there  are  several  drawees  or  |)ayees  of  a 

11  Mod.  401  ;  Buller  N.  P.  270;  Sutton  bill  or  note,  who  are  not  partners,  an  ac- 

V.    Gregory,    2    Peake,     150  ;    Arden    v.  ceptance  or  indorsement  by  one  of  them 

Sharfje,    2  Esp.    525 ;    Swan  v.   Steele,   7  will    not    be    the    act   of   all,    nor    bind 

East,    210 ;    Ridley   v.   Taylor,    13    East,  all.       See    Carvick    v.    Viekery,    Doug., 

175  ;    Livingston    v.   IJoosevelt,   4   Johns.  653,    n.,  Holt.  297,  March,  64,  1  Beawes, 

265  ;  Smith  v.  Lusher,  5  Cow.  689  ;  Man-  445. 

liattan  Company    v.    Ledyard,    1    Caines,  (c)  Hubert   v.   Nelson,   Davies'   B.   L. 

191;  Kane    v.    Scofield,    2    Caines,    368;  8;  Winship  v.  Bank  of  the  United  States, 

McGowan  v.   Bank  of  Kentuck}',  5  Litt.  5  Pet.  529,  5  Mason,  176;  South  Carolina 

271  ;  Commercial  Bank  of  Manchester  v.  Bank  v.   Case,  8  B.  &  C.  427  ;  Grant  v. 

V.  Simmons,  61  Ala.  143  ;  Palmer  y.  Scott,  68  Ala.  380;  Silverman  v.  Chase,  90  111.  37; 
Motfitt  V.  Roche,  92  Ind.  96  ;  Martin  v.  Muncy,  40  La.  Ann.  190,  3  So.  640  ;  Fuller  v. 
Percival,  126  Mass.  381  ;  Wilson  v.  Richards,  28  Minn.  337  ;  Mace  i-.  Heath,  30  Neb. 
620,  46  N.  W.  918  ;  Wagner  v.  Frescid,  56  N.  H.  495  ;  Steuben  County  P.auk  v.  Alber- 
ger,  101  N.  Y.  202  ;  Moorehead  v.  Gilmore,  77  Pa.  118  ;  Morse  v.  Hageuah,  68  Wis. 
603,  32  N.  W.  634.  It  is  therefore  no  defence  to  a  firm  note  to  sliow  that  the  holder 
knew  that  one  partner  signed  it  without  consent  of  the  other,  provided  it  was  really  or 
ostensibly  given  for  firm  purposes.  Moffitt  v.  Roche,  92  Ind.  96.  A  jiartner  who  has 
authoiity  to  make  a  note  of  course  has  authority  to  alter  it.  Mace  ■;;.  Heath,  30  Neb. 
620,  46  N.  W.  918. 

Power  after  dissolution.  —  After  dissolution,  whether  brought  about  by  death  or 
otherwise,  a  partner  has  no  power  to  bind  the  firm  by  giving  a  firm  note,  even  for  a 
pre-existing  firm  debt,  or  in  renewal  of  an  old  firm  note.  Rose  v.  Gunn,  79  Ala.  411  ; 
Bank  of  Montreal  v.  Page,  98  111.  109  ;  Hayden  v.  Cretcher,  75  Ind.  108;  Dunlap  v. 
Limes,  49  la.  177  ;  Mej'er  v.  Atkins,  29  La.  Ann.  586  ;  Matteson  v.  Nathanson,  38 
Mich.  377  ;  Jenness  v.  Carleton,  40  Mich.  343;  Citizens'  Mutual  Ins.  Co.  v.  Ligou,  59 
Miss.  305  ;  Mauney  v.  Coit,  80  N.  C.  300  ;  Palmer  v.  Dodge,  4  Oh.  St.  21  ;  Gardner  v. 
Conn,  34  Oh.  St.'l87;  McCleery  v.  Thompson,  130  Pa.  443,  18  Atl.  735;  Brown  v. 
Chancellor,  61  Tex.  437;  Conrad  v.  Buck,  21  W.  Va.  396. 

Nor  can  a  partner  after  dissolution  bind  the  firm  by  indorsing  negotiable  paper  in 
the  name  of  the  firm.  Stair  v.  Richardson,  108  Ind.  429,  9  N.  E.  300  ;  Carleton  v. 
Jenness,  42  Mich.  110,  3  N.  W.  284. 

But  the  use  of  the  firm  name  is  l)inding  if  the  other  partners  authorize  or  ratify  the 
act.  Sanborn  v.  Stark,  31  F.  P.  18  ;  Murray  v.  Ayer,  16  R.  I.  665,  19  Atl.  241.  Or 
if  the  use  of  the  firm  name  was  required  by  a  Hiin  contract  made  before  dissolution. 
Star  Wagon  Co.  v.  Swezey,  52  la.  391,  3  N.  W.  421. 

The  peculiar  rule  prevails  in  Pennsylvania  that  a  licpiidating  partner  may  bind  the 
firm  by  giving  a  note  for  money  borrowed  to  pay  firm  debts.  Fulton  v.  Central  Bank, 
92  Pa.  112  ;  Siegfried  v.  Ludwig,  102  Pa.  547. 

A  settling  partner  after  dissolution  may  sign  the  firm  name  to  a  check  upon  the  bank 
account  of  the  firm,  for  the  purpose  of  paying  the  firm  debts.  Bradford  v.  Taylor,  61 
Tex.  508.     So  of  a  surviving  partner.     Backhouse  v.  Charlton,  8  Ch.  D.  444  (C.  A.). 


§  132.] 


RIGHTS    AND    DUTIES    OF   PARTNERS. 


169 


incumbent  upon  persons  dealing  with  a  partner  to  inquire  whether 
he  is  authorized  to  sign  the  partnership  name  to  commercial 
paper.  In  the  absence  of  facts  to  the  contrary,  they  have  a  right 
to  presume  that  he  has  this  power,  (d)  It  is  always  open  to  the 
])artners  to  show  that  negotiable  paper  bearing  their  name  was 
never  their  paper,  or  not  signed  with  their  name  in  and  for  their 
business,  or.  if  their  paper,  that  it  was  not  transferred  on  their 
account ;  and  if  this  be  so,  and  the  third  party  claiming  of  them 
had  no  belief,  grounded  on  sufficient  circumstances,  that  it  was 
their  paper,  tlien  they  are  not  held.  It  has  already  been  remarked 
that  an  individual  is  held  liable  as  a  partner  because  he  was  so  in 
fact,  or  because  he  was  held  out  as  one.  An  exactly  analogous 
rule  applies  to  negotiable  paper  bearing  the  name  of  a  firm;  it 
binds  the  firm  either  if  it  was  their  paper  negotiated  in  their 
business,  or  if  it  was  "  held  out  "  as  such  ;  that  is,  so  treated  and 
dealt  with  by  the  firm,  or  with  their  knowledge  and  without  their 
objection,  as  to  justify  others  in  believing  it  to  l)e  their  paper,  and 
the  making  or  transfer  of  it  their  transaction,  {h) 


Hawkes,  Chitty  on  Bills,42  ;  Bank  of  Ken- 
tucky 0.  Brooking,  2  Litt.  41  ;  WalJen 
o.  Sherburne,  15  Johns.  409,  413  ;  Whit- 
aker  v.  Brown,  16  Wend.  505  ;  Bank  of 
Rochester  v.  Monteath,  1  Denio,  402  ; 
[Rocky  Mountain  Nat.  Bank  v.  McCaskill, 
16  Cul.  408,  26  Tac.  821  ;  Stinison  v. 
Whitney,  130  Mass.  591.] 

(d)  Coursey  v.  Baker,  7  Harris  &  J.  28  ; 
Storer  v.  Hinkley,  Kirby,  147;  Champion 
V.  Musford,  Kirby,  172  ;  Hawes  v.  Dun- 
ton,  1  Bailey,  146  ;  Drake  v.  Elwyn,  1 
Caines,  184  ;"  Vallett  v.  Parker,  6  Wend. 
615;  Porter  v.  Cnnungs,  7  Wend.  172; 
Foster  v.  Andrews,  2  Pen.  &  W.  160  ; 
LeRoy  v.  Johnson,  2  Pet.  186,  197.  Nor, 
with  respect  to  this  implied  power  of  each 
partner,  is  there  any  ditference  between 
general  and  special  partnerships.  Living- 
ston V.  Roosevelt,  4  Johns.  251.  See 
Davidson  v.  Robertson,  3  Dow,  229  ; 
Williams  v.  Thomas,  6  Esp.  18.  There 
are  partnerships,  however,  which  are  not 
strictly  fraduiff  partnerships,  and  in  the 
course  ol  whose  business  the  use  of  ne- 
gotiable paper  is  generally  neither  custom- 
ary nor  necessary.  Partners  in  such  firms 
have  not  prima  facie  or  implied  authoritv 
to  bind  them  by  putting  the  firm  name 
upon  bills  or  notes.  Of  this  sort  are 
professional   partnerships,    and   those   for 


mining  and  farming  pnrpo.ses.  See  ante^ 
§  85.  But  the  mere  circumstance  that  the 
business  of  a  firm  consists  in  making 
profits  out  of  real  estate,  as  in  working  a 
stone  quarry,  will  not  take  the  case  out  of 
the  general  rule.  Thicknesse  v.  Bromi- 
low,  2  Cr.  k  J.  425,  430. 

The  act  of  drawing  a  bill  of  e.Kchange 
by  one  partner,  in  his  own  name,  upon 
the  firm  of  which  he  is  a  member,  for  the 
use  of  the  partnership  concern,  has  been 
held  to  be  an  acceptance  of  the  bill  by 
the  drawer  in  behalf  of  the  firm,  and  to 
bind  the  firm  as  on  an  accepted  bill. 
Dougal  V.  Cowles,  5  Day,  511.  See  also 
Beach  v.  State  Bank.  2  Ind.  488  ;  Miller 
V.  Thompson,  3  M.  &  G.  576.  And  it 
seems  that  in  such  case,  if  the  partnership 
were  not  held  to  be  bound  at  law,  yet,  if 
the  bill  were  actually  drawn  on  partner- 
ship account,  equity  would  enforce  pay- 
ment of  it.  Reimsdyk  v.  Kane,  1  Gall. 
630.  See,  as  to  the  subject  of  this  note 
generally,  1  Pars.  Notes  and  Bills,  123- 
148.  A  partner  may  indorse  a  note,  of 
which  his  firm  is  payee,  in  the  name  of 
his  firm,  to  himself;  and  may  then,  in 
his  own  name,  sue  and  recover  from  the 
maker.  Kirby  v.  T'ogswell,  1  Caines,  505  ; 
Burnham  v.  Whittier,  5  N.  H.  334. 

(6)  We  have  just  seen  that  it  is  within 


170 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII. 


§  133,  Issue  of  Negotiable  Paper  in  Fraud  of  Firm.  —  The  making 
or  indorsement  of  a  promissory  note,  in  the  name  of  the  firm,  by 
one  of  the  firm,  does  not  bind  the  lii-m,  if  the  payee  or  indorsee 
knows,  or  ouglit  from  the  circumstances  to  know,  that  it  is  on 
j)rivate  account,  or  unless  specially  authorized  or  ratified  by  the 
other  partners ;  (ba)  but  the  firm  will  be  held  if  the  thing  is  done 
apparently  In  the  course  of  business,  and  the  other  party  has  no 
])rivity  with  the  fraud  and  no  notice  or  knowledge  of  it.  But  a 
party  cannot,  as  to  his  copartners,  waive  notice  upon  a  note 
indorsed  by  him  for  his  own  benefit,  {bb) 


the  general  implied  power  of  each  partner 
to  bind  liis  firm  by  all  contracts  concern- 
ing negotiable  pajier.  As  against  hi.i 
copartners,  the  making,  accejiting,  or 
indorsing  of  such  pa[)er  by  one  partner  is 
valid  only  when  the  act  is  within  the 
scope  of  the  joint  business  and  is  actually 
on  the  joint  account.  But,  as  far  as  third 
parties  are  concerned,  such  act  of  a  single 
partner  charges  the  partnership,  if  only  it 
fairly  appear  to  be  within  the  joint  busi- 
ness and  on  the  joint  account.  Hence, 
wherever  the  partnership  name  is  signed 
by  a  partner  to  negotiable  paper  the  firm 
is  bound,  unless  in  some  way  the  title  of 
the  holder  can  be  impeached.  Wintle  v. 
Crowther,  1  Cr.  &  J.  316,  318  ,  Lane  v. 
Williams,  2  Vern.  277  ;  Baker  v.  Charl- 
ton, 1  Peake,  80  ;  Arden  v.  Sharpe,  2 
Esp.  523 ;  M'Nair  v.  Fleming,  1  Montagu 
on  Part.  37;  3  Dow,  229  ;  2  P>ell  Comm. 
672  ;  Lloyd  v.  Ashby,  2  B.  &  Ad.  23  ; 
Vere  v.  Ashby,  10  B.  &  C.  288;  Livingston 
V.  Roosevelt,  4  Johns.  251  ;  Winship  v. 
Bank  of  the  United  States,  5  Pet.  529  ; 
Etheridge  v.  Binney,  9  Pick.  272,  274  ; 
Miller  w.  Manice,  6  Hill,  114.  (Schwanck 
V.  Davis,  25  Neb.  196,  41  N.  W.  141.] 
And  it  has  been  held  that  the  fact  that 
the  payee  of  a  note,  made  V)y  one  partner 
in  the  name  of  the  firm,  believed  that  tlie 
money  for  which  the  note  was  given  was 
to  be  applied  to  the  individual  purposes 
of  the  acting  partner,  wotdd  not  inval- 
idate the  note  as  to  the  firm,  unless  such 
misappropriation  renlly  took  place.  Ham- 
ilton V.  Summers,  12  B.  Mon.  11.  Nor, 
if  a  partner  lias  borrowed  money  on  his 
own  credit,  and  given  his  separate  note 
therefor,  is  it  a  fraud  afterwards  to  sub- 
stitute the  note  of  the  firm,  provided  the 


money  borrowed  actually  came  to  the  use 
of  the  firm.  Neither,  if  the  original  loan 
was  made  on  the  credit  of  the  firm, 
though  the  separate  note  of  the  borrowing 
partner  was  executed  for  it,  would  it  be  a 
fraud  to  substitute  for  the  separate  secur- 
ity the  note  of  the  firm,  notwithstanding 
it  did  not  appear  that  the  money  went 
into  the  business  of  the  partnership. 
Union  Bank  v.  Eaton,  5  Humph.  499. 
See  Ala.  Coal  Mining  Co.  v.  Brainard,  35 
Ala.  476  ;  Connecticut  River  Bank  v. 
French,  6  Allen,  313  ;  Fielden  v.  Lahens, 
9  Bosw.  436;  Stephens  v.  Reynolds,  2 
Fost.  &  Fin.  147  -,  Dow  v.  Phillip.s,  24 
111.  249  ,  Maynard  v.  Fellows,  43  N.  H. 
255. 

(ba)  Ditts  V.  Lon.sdale,  49  Ind.  529  ; 
Reubin  v.  Cohen,  48  Cal.  545  ;  First  Nat. 
Bank  v.  Bieese,  39  Icwa,  640  ;  Hotchkiss 
?•  English,  4  Hun,  369,  6  Th.  &  C.  658  ; 
Tompkins  v.  Woodford,  5  W.  Va.  216; 
Graves  v.  Kellenberger,  51  Ind.  66  ;  Lime 
Rock  Ins.  Co.  v.  Treat,  58  Me.  415  ;  Zuel 
V.  Bowen,  78  111.  234  ;  Bankhead  r.  Allo- 
wa}',  6  Cold.  (Tenn.)  56  ;  Blodgettu.Weed, 
119  Mass.  217;  Crocker  i;.  Colwell,  46  N. 
Y.  212  ;  [Campbell  v.  Pence,  118  Ind.  313, 
20  N.  E.  840  ;  Central  Nat.  Bank  c.  Frye, 
148  xMass.  498,  20  N.  E.  325.]  A  firm  is  not 
bound  for  capital  contributed  by  any  part- 
ner, even  if  a  firm  note  be  given  therefor, 
if  the  note  be  given  without  the  authority 
of  the  other  partners.  Wiltram  v.  Van 
Wormer,  44  III.  97  ;  Heap  v.  Dobson,  15 
C.  B.  N.  s.  460  .  Ba.xter  v.  Plunkett,  4 
Houst.   (Del.)   450. 

{bb)  Windham  County  Bank  i'.  Kendall, 
7  R.  I.  77.  See  Bush  v.  Crawford  (U.  S. 
C.  Ct.),  9  Phila.  392,  where  it  is  held  that 
nothing  short  of  bad  faith  of  the  plaintiff 


§  134.] 


RIGHTS    AND    DUTIES   OF   PARTNERS. 


171 


§  134.  The  Burden  of  Proof.  —  Rule  in  America.  — The  question 
has  been  very  much  discussed,  on  whom  lies  the  burden  of  proof ; 
and  we  have  already  alluded  to  it,  in  connection  with  the  question 
to  whom  credit  is  given.  There  is  some  fluctuation  in  the  adjudi- 
cation both  of  England  and  of  this  country ;  but  we  think  there  is 
no  material  difference  in  the  principles  adopted  by  the  two  coun- 
tries. It  must  be  regarded  as  the  general  presumption  of  law, 
that  all  pai)er  upon  which  the  signature  of  the  firm  has  been  put 
by  a  partner,  is  the  paper  and  bears  the  signature  of  the  partner- 
ship ;  and  that  all  transfers  of  such  paper  by  him  were  lawful,  (c) 


can  be  available  as  a  defence  to  such  a 
note.  See  also,  to  same  point,  Canadian 
Bank  v.  Wilson,  36  U.  C.  Q.  B.  9  And 
if  the  person  receiving  such  a  note  indorses 
the  same  before  maturity  to  a  bona  fide 
holder,  for  value,  he  is  liable  in  damages 
to  the  defrauded  partners.  Calkins  v. 
Smith,  48  N.  Y.  614.  Nor  is  it  a  defence 
to  a  note  given  to  a  partnership,  that  one 
of  the  partners  agreed  that  it  might  be 
jiaid  by  off-setting  a  debt  due  from  the 
partner  so  agreeing.  Harper  v.  Wrigley, 
48  Ga.  493.  See  also  Stearns  i;.  Houghton, 
38  Vt.  583. 

Where  one  jtartner,  holding  notes  for 
the  benefit  of  the  firm,  attem]>ts  to  pawn 
or  pledge  them  for  his  own  private  debts, 
tlie  court  will  interfere  to  restrain  it  as 
an  act  of  fraud  <ni  his  copartners.  Stock- 
dale  V.  Ullery,  37  Pa.  486.  Moreover,  the 
title  of  the  holder  is  not  affected  by  any 
knowledge  acquired  by  him  subsequently 
to  his  reception  of  the  paper.  In  Swan  v. 
Steele,  7  East,  210,  see  the  very  instruc- 
tive opinion  of  Lord  Ellenborough,  C.  J. 
We  shall  find  this  same  principle  occur- 
ring and  being  applied  to  neaily  all  the 
questions  which  we  are  about  to  consider 
res])Hcting  the  liability  of  a  firm  upon 
negotiable  paper  issued  or  transferred  by 
one  partner.  See  post,  §  137,  respecting 
cases  where  paper  bearing  the  firm  name, 
but  originally  made  or  afterwards  trans- 
ferred in  fraud  of  the  firm,  has  come  into 
the  hands  of  a  bona  fide  holder  for  value. 

(c)  Manuf.  &  Mech.  Bank  v.  Win  ship, 
5  Pick.  11  ;  Etheridge  v.  Binney,  9  Pick. 
274  ;  Waldo  Bank  v.  Greely,  16  Me.  419  ; 
Barrett  v.  Swann,  17  Me.  ISO  ;  Vallett  v. 
Parker,  6  Wend.  615  ;  Doty  v.  Bates,  11 
Johns.  544  ;  Knappy.  McBride,  7  Ala.  19  ; 


Ensminger  v.  Marvin,  5  Blackf.  210 ; 
Miller  v.  Hines,  15  Ga.  197  ;  Thurston  v. 
Lloyd,  4  Md.  283  ;  Manning  v.  Hays,  6 
Md.  5  ;  Powell  v.  Messer,  18  Tex.  401  ; 
Hickman  v.  Kunkle,  27  Mo.  401  ;  Carrier 
V.  Cameron,  31  Mich.  373  ;  [Rocky 
Mountain  Nat.  Bank  v.  McCaskill,  16  Col. 
408,  26  Pac.  821  ;  Sherwood  v.  Snow,  46 
la.  481  ;  Deitz  v.  Kegnier,  27  Kas.  94  ; 
Lindh  v.  Crowley,  29  Kas.  756  ;  First  Nat. 
Bank  v.  Morgan,  73  N.  Y.  593  ;  Hogg  v. 
Orgill,  34  Pa.  344.]  If  a  creditor  of  a  part- 
nership take  a  bill  from  his  debtors,  drawn 
by  them  upon  another  firm,  and  this  bill 
is  afterwards,  in  the  usual  course  of  busi- 
ness, accepted  in  the  name  of  the  firm 
drawn  upon,  though  by  a  partner  who  is 
also  a  member  of  the  drawing  firm,  it  can- 
not, in  such  a  case,  be  inferred  as  matter 
of  law  from  this  latter  fact,  standing  alone, 
that  the  purpose  of  the  parties,  or  even  that 
the  effect  of  the  transaction,  is  to  subject  the 
funds  of  the  acceptors  to  the  payment  of 
the  debt.  These  facts  alone  appearing,  the 
acceptance  is,  prima  facie,  an  acceptance 
on  the  joint  account  of  the  accepting  firm, 
and  binds  a  partner  therein  who  is  not  a 
member  of  the  drawing  firm,  and  did  not 
expressly  assent  to  it.  Tutt  v.  Addanis, 
24  Mo.  186.  See  Phinsen  v.  Negley,  25 
Pa.  297.  Nor  is  the  fact  that  a  draft  or  bill, 
made  in  the  name  of  the  firm,  is  made  pay- 
able to  the  order  of  one  of  the  partners, 
any  indication  that  the  paper  was  not 
drawn  on  partnership  account,  and  in  the 
usual  course  of  the  business  of  the  firm. 
Nor  is  the  presumption  that  a  draft  or  bill, 
so  signed,  is  regular  partneiship  paper, 
changed  by  showing  that  such  paper  was 
discounted  at  the  request  of  the  partner 
who  drew  the  draft  in  the  name  of  the 


172 


THE   LAW   OF   PARTNERSHIP. 


[CH. 


VII. 


This,  therefore,  would  call  on  the  partnership  to  discharge  itself, 
and  therefore  would  lay  the  burden  of  proof  on  them. 

Thus  far  the  law  seems  to  be  clear.  Then  the  American  adjudi- 
cation very  decidedly  assumes  that  the  third  party  taking  this  i)aper, 
with  the  knowledge  that  it  was  given  for  the  private  and  personal 
debt  only  of  one  partner,  knows  enough  to  put  him  on  his  guard, 
and  that  he  is  now  bound  to  inquire  whether  the  firm  authorized 
this  use  of  their  name,  and  can  only  hold  them  on  the  ground  that 
they  did  so  authorize  it  in  fact ;  and  this  he  must  show  as  the 
foundation  of  his  claim.  In  other  words,  the  American  courts 
liuld  the  doctrine  that  a  third  party  taking  from  a  partner  the 
signature  of  his  firm  for  his  own  debt,  cannot  hold  that  firm, 
without  proof  of  authority,  adoption,  or  ratification  by  the  firm,  (d) 


firm  whose  name  was  inserted  as  payee, 
who  indorsed  it,  and  drew  out  the  proceeds. 
Haldeman  v.  Bank  of  Middlet(nvn,  28  Pa. 
440  ;  Phinsen  v.  Net^ley,  25  Pa.  297.  See 
Pierce  v.  Jackson,  21  Cal.  636  ;  Uhler  i\ 
Browning,  4  Dutch.  79;  Hurdi'.  Haggerty, 
24  111.  171  ;  Littell  v.  Fitch,  11  Mich.  525. 

A.,  the  indorser  of  a  promissory  note 
made  by  B.,  one  member  of  a  firm  consist- 
ing of  B.  &  C,  payable  to  the  order  of  A., 
who  indorsed  it  to  C,  A.'s  indorsement 
being  for  the  accommodation  of  the  firm, 
may  maintain  an  action  against  B.  &  C. 
jointly,  to  recover  the  amount  which  he, 
A.,  may  have  been  compelled  to  pay. 
Thayer  v.  Smith,   116  Mass.   363. 

{fl)  Chazournes  v.  Edwards,  3  Pick.  5  ; 
Homer  v.  Wood,  11  Cush.  62  ;  Davenport 
t'.  Runlett,  3  N.  H.  386  ;  Williams  v. 
Gilchrist,  11  N.  H.  535  ;  Livingston  v. 
Hastie,  2  Gaines,  246  ;  Lansing  v.  Gaine, 
2  Johns.  300  ;  Livingston  v.  Roosevelt,  4 
Johns.  251  ;  Laverty  v.  Burr,  1  Wend. 
529  ;  Warden  v.  Hughes,  3  Wend.  418  ; 
Whitaker  v.  Brown,  11  Wend.  75  ;  Ganse- 
voort  V.  Williams,  14  Wend.  133  ;  Joyce 
V.  Williams,  14  Wend.  141  ;  Wilson  v. 
Williams,  14  Wend.  146  :  Baird  v.  Coch- 
ran, 4  S.  &  R.  397  ;  Cotton  v.  Evans,  1 
Dev.  &  B.  Eq.  284  ;  Abpt  v.  Miller,  5 
Jones,  32  ;  Weed  v.  Richardson,  2  Dev.  & 
B.  535 ;  Hagar  v.  Mounts,  3  Blackf.  261  ; 
Taylor  r.  Hillyer,  3  Blackf.  433  :  Hick- 
man V.  Rieneking,  6  Blackf.  387  ;  Rogers 
V.  Batchelor,  12  Pet.  221  ;  Mauldin  v. 
Branch  Bank  at  Mobile,  2  Ala.  502 ; 
Darling  v.  March,  22  Me.  184  ;  Brown  v. 


Duncanson,  4  H.  &  McH,  350  ;  Poindexter 
V.  Waddy,  6  Munf.  418 ;  Robertson  v. 
Mills,  2  H.  &  G.  98  ;  Stearns  v.  Bnrnham, 
4  Me.  84;  Elliott  v.  Dudley,  19  Barb.  326  ; 
Lanier  v.  McCabe,  2  Fla.  32  ;  Tutt  v. 
Addams,  24  Mo.  186  ;  Powell  v.  Messer,  18 
Tex.  401  ;  Clay  v.  Cottrell,  18  Pa.  408 
The  fact  that  a  note  given  by  one  part- 
ner, in  the  name  of  his  firm,  but  mainly 
for  his  own  debt,  includes  within  it  a  small 
debt  of  the  firm,  will  not  make  the  firm 
liable  on  the  note.  King  v.  Faber,  22  Pa. 
21.  And  wherever  the  firm  name  is  put 
by  one  partner  upon  negotiable  paper  under 
circumstances  which  make  the  transaction 
actually  or  constructively  fraudulent,  and 
therefore  void  as  to  the  firm,  the  bill  or 
note,  also,  is  void  in  the  hands  of  the 
fraudulent  holder  as  to  any  of  the  other 
jiarties  to  it  ;  for,  otherwise,  the  ])artner- 
ship  would  eventually  be  made  liable 
upon  it.  Ridley  v.  Taylor,  13  East,  175  ; 
Livingston  v.  Hastie,  2  Gaines,  246  ;  Cha- 
zournes V.  Edwards,  3  Pick.  5  ;  Williams 
V.  Walbridge,  3  Wend.  415  ;  Hagar  v. 
Mounts,  3  Blackf.  261.  But  see  Bo  wen 
V.  Mead,  1  Mich.  432.  As  to  the  ques- 
tion of  the  consent  of  the  firm  to  the 
act  of  one  partner,  by  which  he  pledgi'S 
the  partnership  name  for  his  private  debt, 
it  is  not  a  matter  of  legal  presumption,  but 
a  matter  of  fact,  of  which  the  jury  must 
be  satisfactorily  convinced.  Hence,  where 
the  jury  were  instructed  that,  if  one  of  two 
partners  was  ])resent  and  heaid  the  other 
partner  make  an  arrangement  by  which 
the  partnership  name  was  pledged  in  a 


§  135.] 


IlIGHTS    AND    DUTIES    OF    PARTNERS. 


173 


§  135.    Rule    in    England. 


The  weiglit  of  authority  in  tlie 
English  courts  seems  to  be  in  favor  of  rules  substantially  simi- 
lar. («)     That  is,  they  also  hold,  that,  if  a  creditor  of  one  partner 


matter  outside  of  the  partnershij)  concerns, 
the  law  would  presume  that  the  Ibnner 
assented  to  it,  it  was  held,  that  such  in- 
struction was  ground  for  a  new  trial. 
Mercein  t).  Andrus,  10  Wend.  261;  Foster 
V.  Andrews,  2  Pen.  &,  W.  I(j0  ;  Jones  v. 
Kootli,  10  Vt.  268  ;  McKinney  v.  Brights, 
16  Pa.  399.  But  where  a  partner  gives 
the  ])artnership  name  for  his  individual 
debt,  tlie  assent  of  his  copartners  to  the 
act,  or  their  ratification  of  it,  may  be 
implied  from  circumstances,  and  need  not 
be  proved  by  express  agreement.  Ganse- 
voort  V.  Williams,  14  Wend.  133;  Noble 
V.  M"Clintock,  2  W.  &  S.  152  ;  Cha- 
zournes  v.  Edwards,  3  Pick.  11  ;  Cotton  v. 
Evans,  1  Dcv.  &  B.  Eip  284  ;  Abpt  i'. 
Miller,  5  Jones,  32  ;  Brewster  v.  Mott,  5 
111.  378  ;  Powell  v.  Messer,  18  Tex.  401  ; 
Kemegs  v.  Richards,  11  Barb.  312  ; 
Wheeler  v.  Kice,  8  Cush.  205.  See 
Elliott  V.  Dudley,  19  Barb.  326.  Nor 
need  there  be  any  new  and  independent 
consideration  for  the  act  of  the  partners, 
ratifying  and  promising  to  be  bound  by 
the  act  of  a  copartner  who  has  wrongfully 
used  the  ])artnership  name  for  his  own 
benefit.  Commercial  Bank  v.  Warren,  15 
N.  Y.  577.  In  Flagg  v.  Upham,  10  Pick. 
147,  it  appeared  that  Valentine,  one  of 
two  partners,  had  given  the  firm  note  for 
his  several  debt  ;  and  that  afterwards  his 
copartner,  acting  under  a  mistake  of  law, 
acknowledged  himself  liable  upon  the  note, 
and  gave  his  written  guaranty  for  its  pay- 
ment. The  payee  bringing  his  action 
upon  the  guaranty,  the  court  said  :  "  The 
note  was  made  in  the  partnership  name, 
purported  to  bind  both  partners,  and  was 
binding  upon  the  partners,  if  made  with 
their  consent.  Supposing  it  to  be  made 
by  Valentine  for  his  several  debt,  without 
the  consent  of  the  defendant,  it  would  not, 
indeed,  be  binding  upon  hin)  ;  but  no  one 
else  could  make  the  objection,  and  it 
depended  on  himself  to  in-sist  on,  or  to 
waive,  the  objection.  Under  these  circum- 
stances, knowing  the  terms  of  the  partnei- 
ship  between  Valentine  and  himself,  and 
knowing  the  consideration  for  which  the 


note  was  given,  we  are  of  opinion  that  his 
acknowledgment  of  his  own  liability,  and 
his  express  obligation  to  guarantee  the 
l)ayment,  were  a  waiver  of  any  objection 
which  he  ndght  have  made  to  the  note, 
and  therefore  that  this  guarantee  was 
given  upon  a  good  consideration,  and  that 
he  is  bound  by  it.''  See  Stearns  v.  Burn- 
ham,  4  Me.  84  ;  Leversou  v.  Lane,  13 
C,  B.  N.  s.  278.  In  Taylor  v.  Hillyer,  3 
Blackf.  433,  where  one  of  two  partners 
had  given  a  note,  in  the  name  of  his  firm, 
for  his  private  debt,  and  this  was  known 
to  the  payee,  a  sub.secjuent  oral  promise  by 
the  other  partner  to  pay  the  note  was 
deemed  to  be  within  the  statute  of  frauds, 
and  therefore  not  binding  on  him.  See 
Mercein  v.  Andrus,  10  Wend.  461  ; 
Fielden  v.  Lahens,  9  Bosw.  436  ;  Whit- 
more  V.  Adams,  17  Iowa,  567  ;  Burleigh 
V.    Parton,  21   Tex.    585. 

(c)  The  English  and  American  rules  on 
this  point  have  frequently  been  contrasted 
in  the  courts  of  this  country.  The  views 
taken  of  the  points  of  <litlerenee  between 
the  two,  though  variously  stated,  are  in 
the  main  in  unison  with  those  of  the  text. 
Thus  in  Chazournes  v.  Edwards,  3  Pick. 
5,  Parker,  C.  J.,  after  stating  the  Ameri- 
can rule,  says  :  "The  only  case  which 
has  a  contrary  tendency  is  that  of  Ridley 
V.  Taylor,  13  East,  175,  in  which  case, 
however,  the  i)rinciple  above  stated  is 
admitted  ;  but  it  was  thought  that  the 
facts  did  not  show  that  knowledge  on  the 
part  of  the  creditor  which  would  consti- 
tute the  transaction  fraudulent  on  his  part. 
There  were  circumstances  in  the  case  from 
which  it  was  thought  the  plaintiffs  might 
reasonably  infer  that  the  bill  given  to  them 
by  their  debtor  was  one  which  he  had  a 
right  within  his  general  authority  as  a 
partner  to  transfer.  Though  the  decision 
does  not  seem  to  be  in  exact  conformity 
with  the  rule  as  before  settled  in  several 
cases,  yet  the  principle  is  clearly  ad- 
mitted." In  Dob  V.  Halsey,  16  Johns. 
38,  Spencer  J.,  thus  expresses  the  distinc- 
tion :  "The  only  difference  between  the 
decision   of    this   court  and   that   of    the 


174 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII. 


take  partnership  paper  in  payment  of  his  debt  from  that  part- 
ner, and  there  are  no  further  facts  in  the  case,  the  partnership 
would  not   be   held,  and   the    act   of  the    liolder   of  that   paper 

would  be  deemed  fraudulent  in  law.  (/)     But,  if  further  facts 

King's  Bench  consists  in  tiiis  :  We  require  is  re([uired  negativini^  a  presumed  concur- 

tlie  separate  creditor,  wlio  lias  obtained  the  rtuce  of    the  copartner."     See  opinion  of 

partnership  paper  for  the  private  debt  of  Bronson,   J.,  in   Wilson  v.    Williams,   14 

one  of  the  partners,  to  show  the  assent  of  Wend.    146,  158  ;  of   Tracy,    Senator,    in 

the  wliole  firm    to  be  bound.     The  rule  State  v.    Catskill  Bank,   18  Wend.  480  ; 

of  the  King's  Bench   throws   the    burden  Rogers  v.  Batchelor,  12  Pet.  221;  Bank  of 

of  avoiding  such   security  on  the  firm,  by  Tennessee  v.  Salfarans,  3  Humph.  597- 

requiring  them  to  prove,  that  the  act  was  (/)  This   is   the  principle  of    Hope   v. 

covinous  on  the  part  of   the  partner  for  Oust,  cited  by  Lawrence,  J.,  in  1  East,  52. 

whose  private  debt  the  paper  of  the  firm  The  same  principle  was  applied  in  Shirretf 

was  given,  by  showing  that  it  was  done  v.  Wilks,   1   f^ast,   48,  the  case  in  which 

without  the  knowledge,  and  against  the  Hope   v.   Cust,  supra,  was   cited.       Lord 

consent,  of  the  other  partners,  and  that  Kenyon,  C.  J.,  said  :      "  This  is  an  action 

the  fact  was  known  to  the  separate  creditor  brought    against    three    persons,    Wilks, 

when    he   took   the   paper  of    the   firm."  Bishop,  and  Robson,  as  acceptors  of  a  bill 

See    Laverty  r.    Burr,   1  Wend.   .^)29,  531,  of  exchange.     It  appears  that  the  accept- 

opinion  of  Sutherland,  J.     The  ojunion  of  ance  was  in  fact  made  by  Bishop  alone,  in 

Kelson,  J.,  in  Gansevoort  v.  Williams.  14  the  name  of  the  firm.      The  consideration 

Wend.  133,  upon  the  same  jjoint,  is  very  for  this  bill  was  some  porter,  which  had 

full  and  elaborate.     He  says  :     "  The  Eng-  been    sold   by  the   plaintiffs   to   Wilks   & 

lish  cases  upon  this  subject  are  not  always  Bishop  only,  at  a  time  when  Kobson  had 

consistent  with  themselves  ;    and  even  the  no   concern   with   the   house.      Then    the 

same  court,  while  they  profess  to  adhere  plaintiffs,  knowing  this,  draw  the  bill  upon 

to  this  general   position,  namely,  that  the  all  the  three  partners,  and  knowingly  take 

partner  denying  the  authority  of  his  asso-  an  acceptance  from  one  of  them  to  bind 

ciate    must    prove  affirmatively  that  the  the  other  two,  one  of  whom,  Robson,  had 

holder  knew  the  paper  was  given  in  a  trans-  no  concern  with   the  matter,  and  was  no 

action   unconnected  with  the  ])artnership,  debtor  of  theirs,  —  no  assent  of  his  being 

and  also  that  he  did  not  assent,  sometimes  found,  and  nothing  stated  to  show  that  he 

substantially  disregard  the  latter  qualifi-  had  any  knowledge  of  the  transaction.    It 

cation  of  the  rule  in  the  application  of  it  is  hard  enongh  for  one  partner  in  any  case 

to  facts."  He  illustrates  the  above  remarks  to  be  able   to   bind   another   without  his 

by  a  citation  of   some  of  the  leading  Eng-  knowledge  or  consent;    but  it  would  be 

lish  authorities,  from  the  examination  of  carrying  the  liability  of   partners  for  each 

which  he  concludes  "  that  while  the  Eng-  other's  acts  to  a  most  unjust  extent,  if  we 

lish  courts  hold  to  the  position  that  the  suffered  a  new  partner  to  be  bound  in  this 

firm  is  liable  on  a  bill  or  note  made  by  one  manner  for  an  old  debt  incurred  by  other 

out  of  the  partnership  business,  unless  the  persons.      The  plaintiffs,  therefore,  ought 

holder  knows  that  it  was  so   made,  and  not  in  justice  to  have  taken  this  security, 

that  the  other  partners  did  not  concur,  the  by  which  they  were  to  bind  one  who  was 

frequent  ])ractical  operation  and  effect  of  it  not  their  debtor:  the  transaction  is  fraudu- 

under  their  direction  does  not  essentially  lent  upon  the  face  of   it."     So  in  Green  r. 

ditler   from    the  rules   as   settled  in    this  Drakin,  2  Stark.  347.      There  H.  and  B. 

court.     They  undoubtedly  put  the  defence  being  partners,  the  plaintiff  lent  H.  500/, 

of  the  copartner  upon  the  ground  of  fraud,  to  enable   liini  to  enter   into  partnership 

committed  upon  him  by  his  associate  and  with  D.,  the  defendant,  and  shortly  after 

the  holder ;  but  this  is  sometimes  inferred  D.  H.  and  B.  became  partners.      To  pay 

from  the  fact  that  the  bill  or  note  is  given  part  of  the  sum  borrowed,  H.  drew  a  bill 

for  a  private  debt,  and  that  known  to  the  of  exchange  in  the  partnership  name,  to 

holder  ;  and  at  other  times  further  proof  his  own  order,  and  endorsed  the  same  to 


§  135.] 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


175 


come  in,  these  do  not  seem  to  be  construed  with  the  same  sever- 
ity, in  reference  to  the  holder,  as  they  would  be  in  this  country. 
Thus,  if  the  paper  be  larger  than  the  debt,  and  not  agreeing  with 
it  in  point  of  time,  and  is  indorsed  before  the  holder  sees  it,  such 
facts  have  been  considered  as  warranting  the  conclusion  that  the 
holder  honestly  believed,  and  might  rationally  have  believed,  that 
the  firm  authorized  the  transfer.  (^)     But,  while  it  is  true  that 


the  phiintifr.  Being  called  as  a  witness, 
he  testified  that  he  had  drawn  the  bill 
in  question  without  the  knowledge  of  his 
cojiartners,  but  that  the  plaintiff  did  not 
know  this.  The  defendant  had  given  no 
notice  of  his  intention  to  dispute  the  con- 
sideiation  of  the  bill.  But  Lord  Ellen- 
borough  was  of  opinion  that  the  nature  of 
the  transaction  was  intiinsically  notice, 
and  he  directed,  that  the  plaintiff  should 
be  nonsuited,  on  the  ground  that  one  part- 
ner had  no  right  to  bind  another  without 
his  knowledge,  bj*  drawing  a  bill  for  his 
own  private  debt.  Ex  parte  Goulding,  2 
Glyn  &  J.  118.  See  Jones  r.  Yates,  9  B. 
&  C.  532  ;  Ex  parte  Thorpe,  3  ]Mont.  & 
A.  716 ;  JUx  parte  Bon  bonus,  8  Ves. 
540  ;  Ex  parte  Peele,  6  Ves.  604  ;  May  v. 
Chapman,  16  M.  &  W.  355  ;  Smith  v.  Cole- 
man,  7  Jur.  1053.  In  Franklin  y.  M'Gusty, 
1  Knapp,  301,  the  Master  of  the  Rolls 
said  :  "  I  take  it  to  be  clear,  from  all  the 
cases  upon  the  subject,  that  it  lies  upon 
a  separate  creditor  who  takes  a  partnership 
security  t'orthejiayment  of  his  separatedebt, 
if  it  be  taken  si'/np^/ci'/'tfr,  and  there  is  nothing 
more  in  the  case,  to  prove  that  it  was  given 
with  the  consent  of  the  other  partners." 
And  see  Blinn  v.  Evans,  24  111.  317. 

((/)  The  principal  case  is  Kiilley  v.  Tay- 
lor, 13  East,  175.  The  plaintiffs  in 
November,  1806,  sold  to  Ewbank,  of 
the  firm  of  Ord  &  Ewbank,  linen- 
drapers,  on  his  separate  account,  a  cargo 
of  coals,  to  the  amount  of  34^.  lis.  In 
ilay  following, Ewbank  paid  5^.  on  account, 
and  gave  his  note  for  the  balance.  This 
note  was  dishonored,  and  taken  up  by  the 
plaintiffs,  who  shortly  after  received  from 
Ewbank,  for  the  same  balance,  the  bill  in 
suit.  This  bill,  for  40/.,  was  drawn  and 
indorsed  by  Ewbank  in  the  style  and  firm 
of  Ord  &  Ewbank,  and  was  before  that 
time  accepted  by  the  defendant  Taylor. 
After  delivering  this  accejitance  to  the 
plaintiffs,  Ewbank  applied  to  the  plaintiffs 


for  the  balance  of  9^.  19s.  9d.;  but  the 
plaintiffs  refused  to  pay  it  until  the  bill 
upon  the  defendant  should  have  been  paid. 
The  jilaintiffs  negotiated  the  bill  for  40/., 
but  were  subsei[uently  obliged  to  jiay  it, 
and  thereupon  deliited  Ewbank  alone'  for 
the  amount.  Ord  &  Ewbank  having  become 
bankrupt,  the  defendant  was  sued  as  ac- 
ceptor, and  a  verdict  found  for  the  plain- 
tiff's to  the  amount  of  the  bill,  subject  to 
the  opinion  of  the  court  on  the  above 
fact.s.  It  was  held,  in  the  King's  Bench, 
that  the  verdict  should  stand  to  the  amount 
of  Ewbank's  debt. 

The  same  circumstances,  of  the  partner- 
ship paper  being  for  an  amount  larger  than 
the  private  debt,  and  of  its  being  drawn, 
accepted,  and  indorsed  before  the  creditor 
saw  it,  and  of  its  differing  in  point  of 
time,  seem  to  have  determined  the  opinion 
of  the  court  in  Ex  parte  Kirby,  1  Buck,  511. 
There  T.,  M.,  and  F.  were  in  partnership, 
under  the  firm  of  M.,  F.,&Co.  T.  also 
carried  on  business  on  his  own  account, 
and  being  separately  indebted  to  K.  to  the 
amount  of  100/.,  he  sent  to  K.  a  bill  of 
exchange  for  300/.  already  drawn  and 
accepted,  and  also  indorsed  by  M.,  F.,  & 
Co.,  the  payees,  but  which  wanted  nearly 
three  months  of  being  due.  At  the  same 
time,  T.  re(piested  K.  to  place  100/.  to  his 
credit,  and  to  send  him  a  bill  for  the  bal- 
ance, 200/.  K.  accordingly  sent  a  draft 
for  200/.,  which  was  duly  paid.  The  bill 
for  300/.  being  dishonored,  and  M.,F.,  & 
Co.  having  become  bankrupt,  K.  was  held 
to  have  made  a  bona  fide  exchange  of 
security,  and  to  be  entitled  to  prove  against 
the  joint  estate,  though  not  against  the 
separate  estate  of  T. 

Upon  the  same  principle,  apparentl_v, 
it  was  held,  in  Ex  parte  Bonbonus,  8  Ves. 
540,  that  the  mere  fact  that  money 
advanced  to  one  partner  upon  the  security 
of  the  firm  was  earned  to  his  separate 
account,  even  with  the  knowledge  of  the 


176 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII. 


paper  agreeing  in  amount  and  time  with  the  debt,  and  therefore 
<nore  obviously  made  for  the  debt,  would  be  more  suspicious,  we 


k'lidcr,  was  not  sufficient  to  make  the  trans- 
action fraudulent  as  to  the  other  copartners, 
md  thereb}-  to  discharge  the  firm  from  lia- 
bility. Lord  Eldon  said  :  "  This  petition  is 
presented  upon  a  principle  which  it  is  very 
difficult  to  maintain,  that  if  a  partner,  for 
his  own  accommodation,  pledges  the  jiart- 
nership,  as  the  money  comes  to  the  account 
of  the  single  partner  only,  the  partnership  is 
uot  bound.  I  cannot  accede  to  that.  I  agree, 
if  it  is  manifest  to  the  persons  advancing 
money  that  it  is  upon  the  separate  account, 
and  so,  that  it  is  against  good  faith  that 
he  should  pledge  the  partnership,  then 
they  should  show  that  he  had  authority 
to  bind  the  partnership.  But  if  it  is  in 
the  ordinary  course  of  commercial  transac- 
tions, as  upon  discount,  it  would  be  mon- 
strous to  hold,  tjiat  a  man  borrowing 
money  upon  a  bill  of  exchange,  jiledging 
the  partnership,  without  any  knowledge  in 
the  banker  that  it  is  a  separate  transaction, 
merely  because  that  money  is  all  cariied 
into  the  books  of  the  individual,  therefore 
the  partnership  should  not  be  bound.  No 
ease  has  gone  that  length.  It  was  doubted 
whether  Hope  i'.  Cust  was  not  carried  too 
far,  yet  that  does  not  reach  this  trans- 
action ;  nor  Shirreff  v.  Wilks,  as  to  which 
1  agree  with  Lord  Kenyon,  that,  as  part- 
ners, whether  they  expressly  provide 
against  it  in  their  articles  (as  they  gen- 
erally do,  though  unnecessaiily)  or  not,  do 
not  act  with  good  faith  when  pledging  the 
partnershi))  property  for  the  debt  of  the 
individual,  so  it  is  a  fraud  in  the  person 
taking  that  pledge  for  his  separate  debt." 
Further,  it  has  been  held  both  here  and  in 
England,  that  if  one  partner,  to  pay  his 
separate  debt,  give  the  partnershi])  accep- 
tance to  an  anioiint  greater  than  the  debt, 
the  creditor  may,  in  an  action  against  the 
firm,  recover  the  diflerence  between  the 
amount  of  the  bill  and  his  separate  demand; 
the  whole  transaction,  it  seems,  not  being 
vitiateil  by  the  fraud  as  to  ])art.  Thus,  in 
Wintle  V.  Crowther,  1  Cr.  &  J.  316,  the 
defendants,  Crowther  &  Combes,  were 
Sued  as  the  accejitors  of  two  bills  of  ex- 
change, —  one  for  130/.  lOs.  M.,  the 
other  for  45/.  10s.  Respecting  the  former 
bill,  these  facts  were  in  evidence :  Crow- 


ther &  Combes  carried  on  business  in  ]inrt- 
nership  as  coal  merchants.  Combes  being 
a  dormant  partner.  Crowther  was  also 
engaged  in  another  kind  of  business  on  his 
separate  account,  and  therein  became  sepa- 
rately indebted  to  the  plaintiffs  for  8U/. 
The  plaiiititfs  drew  on  him  two  bills  of 
exchange  ;  the  one  for  40/.,  the  other  for 
38/.  8s.  6c/.,  the  first  of  which  was  dis- 
honored. When  the  second  became  due, 
Crowther  took  to  the  plaintilf  the  bill  for 
130/.  10s.  6c/.,  which  was  accepted  in  the 
name  of  Crowther  &  Co.,  in  the  handwrit- 
ing of  Crowther.  The  two  separate  bills 
of  Crowther  were  given  up,  and,  as  the 
evidence  indicated  very  strongly,  in  ex- 
change for  the  partnership  bill  for  130/. 
10s.  6c^.  The  cause  was  twice  tried.  Upon 
the  first  trial,  a  verdict  was  found  for  the 
defendants  ;  but  it  was  set  aside  as  being 
against  evidence.  Upon  the  second  trial, 
the  jury  found  for  the  plaintiffs  upon  both 
bills  ;  and  the  plaintiffs  having  consented 
to  reduce  this  verdict  by  the  amount  of 
Crowther's  two  separate  bills  for  40/.  and 
38/.  8s.  6c/.  (a  clear  admission  of  fraud,  as 
to  that  part  of  the  transaction  at  least),  it 
was  held  in  the  Exchequer  that  they  might 
retain  their  verdict  for  the  residue.  Wilson 
V.  Lewis,  2  Scott's  N.  K.  115  ;  Gamble  v. 
Grimes,  2  Ind.  392.  See  also  Barber  v. 
Backhouse,  1  Peake,  61. 

The  English  rule  seems  to  be  very 
clearly  stated  by  the  Master  of  the  Rolls, 
in  Frankland  v.  M'Gusty,  1  Knapp,  301  : 
"  I  take  it  to  be  clear,  from  all  the  casrs 
upon  the  subject,  that  it  lies  upon  a  se])- 
arate  creditor  who  takes  a  partnership 
security  for  the  payment  of  his  separate 
debt,  if  it  be  taken  simpliciter,  ami  there 
is  nothing  more  in  the  case,  to  prove  that 
it  was  given  with  the  consent  of  the  other 
])artners.  But  there  may  be  other  circum- 
stances attending  the  transaction,  which 
may  afford  the  separate  creditor  a  reason- 
able ground  of  belief  that  the  security  so 
given  in  the  partnership  name  is  given 
with  the  consent  of  the  other  ]iartners  ; 
and  these  circumstances  occurred  in  the 
case  which  was  cited,  and  which  seemed  to 
be  inconsistent  with  the  other  authorities. 
I  refer  now  to  the  case  of  Ridley  v.  Taylor. 


§  135.] 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


177 


have  some  doubt  whether  this  coincidence  between  the  private 
debt  to  be  paid,  and  the  paper  of  the  firm  which  pays  it,  with  no 
evidence  of  authority  or  adoption  by  the  firm,  would  always  be 
suificient,  in  England,  to  discharge  the  firm.  But,  on  the  other 
hand,  we  are  quite  confident  that  American  courts  would  require 
better  reason  for  believing  in  the  good  faith  of  the  holder,  than 
any  coincidence  between  the  date  and  amount  of  the  firm's  paper 
and  those  of  the  private  debt  which  it  pays  or  secures.  In  other 
words,  the  fact  that  the  private  creditor  of  a  partner  takes  from 
him  the  paper  of  the  firm  to  pay  his  debt,  raises  a  stronger  pre- 
sumption of  fraud  in  this  country  than  in  England. 

Lord  Eldon  says,  very  truly,  that  it  may  be  of  great  moment  to 
a  partnership  that  the  mercantile  credit  of  one  of  the  partners 
should  be  preserved,  and  that  the  courts  sliould  not  embarrass 
the  lawful  use  of  the  paper  of  a  firm,  by  a  partner,  for  his  own 
accommodation,  seeing  that  this  is  often  connected  with  the 
advantage  of  the  firm.  (/<)  But  to  all  considerations  of  this  kind 
thei'e  is  one  answer.,  The  power  of  a  partner  is  limited  by  the 
business  of  the  firm  ;  he  who  knows  that  a  partner's  act  is  not 
within  the  business  of  the  firm,  knows  that  it  is  not  authorized ; 


In  that  case  the  bill  was  dated  eighteen 
days  before  its  deliveiy  by  the  partner,  to 
his  separate  creditor,  and  it  was  not  known 
by  the  creditor  that  it  was  drawn  and 
indorsed  by  the  debtor  alone  ;  and  the  bill 
was  to  a  greater  amount  than  the  separate 
debt.  The  court,  therefore,  wei-e  of  opin- 
ion, that  there  was  reasonable  ground  for 
the  separate  creditor  believing  it  not  to 
have  been  given  to  him  in  fraud  of  the 
partnership,  and  that  the  general  presump- 
tion, that  a  partnership  security,  when 
applied  in  payment  of  a  separate  debt,  is 
in  fraud  of  the  partnership,  was  repelled 
by  the  special  circumstances  which  be- 
longed to  that  particular  occasion.  Upon 
a  consideration,  therefore,  of  all  the  au- 
thorities, I  am  of  opinion  that  the  law  is, 
that  taken  simpliciter  the  separate  creditor 
must  show  the  knowledge  of  the  partner- 
ship ;  but,  if  there  are  circumstances  to 
show  a  reasonable  belief  that  it  was  given 
with  the  consent  of  the  partnership,  it  lies 
upon  the  partners  to  j)rove  the  fraud.  I 
think  that  will  reconcile  all  the  cases."  We 
have  already  seen  (§  135,  note  (d)),  that, 
in  this  country,  if  one  partner  use  the  part- 
nership paper  under  such  circumstances  of 


separate  advantage  to  himself,  and  of  col- 
lusion or  of  negligence  on  the  part  of  the 
one  dealing  with  him,  as  to  make  the  trans- 
action prima  facie  fraudulent  and  void  as 
to  the  firm,  the  firm  may  still  be  held 
upon  jiroof  of  its  previous  consent  to,  or 
subsequent  adoption  of,  the  single  part- 
ner's act.  The  same  is  also  the  doctrine 
of  the  English  courts.  Thus,  in  Ex  parte 
Bonbonus,  stated  above,  Lord  Eldon  said  : 
"  There  is  no  doubt  now,  tlie  law  has  taken 
this  course  ;  that  if,  under  the  cinami- 
stances,  the  party  taking  the  paper  can  be 
considered  as  being  advertised  in  the 
nature  of  the  transaction,  that  it  was  not 
intemled  to  be  a  partnership  proceeding,  as 
if  it  was  for  an  antecedent  debt,  prima  facie 
it  will  not  bind  them  :  but  it  will,  if  you 
can  show  previous  authority  or  subsecjuent 
approbation  ;  a  strong  case  of  subseijuent 
ap|)robntion  raising  an  inference  of  previous 
jiositive  authority."  See  Tallmadge  v. 
Penoyer,  35  Barl'..  120. 

(Ji)  Ex  parte  Bonbonus,  8  Ves.  544. 
See  The  Trader's  Bank  of  Rochester  v. 
Bradner,  43  Barb.  379 ;  Freeman  v.  Car- 
penter,  17  Wis.  126. 


12 


178  THE   LAW    OF   PARTNERSHIP.  [CH.    VII. 

and,  if  all  he  knows  is  that  the  act  of  the  partner  is  for  his  own 
immediate  and  direct  and  several  henelit,  he  has  no  right  to  pre- 
sume that  the  firm  are  benefited  also,  and  therefore  authorized  it ; 
because  it  is  generally  very  easy  for  him  to  ascertain  how  this  is, 
if  he  wishes  not  to  be  a  party  to  a  fraud. 

§  136.  Other  Acts  of  Partner  in  Fraud  of  Firm.  —  Similar  doctrines 
must  be  applied  if  a  partner  disposes  of  any  other  securities  ;  or 
of  the  goods  or  property  of  any  kind,  of  the  firm,  in  payment  of 
his  personal  debt,  or  for  his  personal  relief,  (i)  And,  generally, 
the  true  rule  should  be,  and  we  are  confident  that  it  is  so  in  the 
United  States,  that  any  act  whatever  of  a  partner,  certainly  for 
his  own  individual  and  several  benefit,  and  not  obviously  for  that 
of  the  firm  also,  does  not  bind  the  firm,  until  the  holder  proves 
their  authority  or  ratification.  When  a  note  signed  in  the  firm 
name  was  given  not  for  partnership  purposes,  and  a  partner  said 
he  would  settle  it,  "  if  he  could  get  the  books,  notes,  and  accounts 
from  the  partner  who  signed  the  note,"  and  he  did  not  get  them, 
it  was  held  that  he  was  not  liable.  (iV)  And  a  release,  by  one 
partner,  of  a  debt  due  to  the  partnership,  or  a  receipt  of  payment, 
which  he  has  unquestionably  authority  to  give  if  in  good  faith, 
will  be  inoperative  if  given  for  a  consideration  which  is  known, 
or  ought  to  be  known,  to  inure  only  to  his  own  benefit.  And 
many  decisions  illustrating  this  principle  may  be  found  in  the 
note,  (j) 


(0  See  ante,  §  90.  The  adjudications  seem  to  be  somewhat  in 

(//)   Burleigh  v.  Parton,  21  Tex.  f>85.  conflict.     But  the  doctrine  of  quite  a  num- 

(j)  Evernghim  v.   Ensworth,    7  Wend,  ber  of  cases  seems  to  be,  that  as  one  part- 

326  ;     Gram    v.    Cailwell,    5    Cow.    489  ;  ner  has  an  undoubted   right  to  sell   the 

Farrar  v.   Hutchinson,   9  A.    &    E.   641  ;  goods  of  the  partnership,  or  to  contract  for 

Greeley  v.  Wyeth,  10  N.  H.  16  ;  Minor  v.  its   services  ;    and   as   he   may  take   pay 

Gaw,   11  Sm.   &  M,  322.     See,  however,  therefor  in  behalf  of  the  partnership  in 

Halls  V.  Coe,  4  McCord,  136;  Beckham  v.  either  specific  articles  or  money;    and  as 

Peag,  2  Bailey,  133.     An  arrangement  is  an  appropriation  by  him  of  such  articles  or 

sometimes  made  between  one  partner  and  money,  once  received  for  the  partnershi{>, 

a  customer  of  the  firm,   by  which  it   is  to  his  private  use,  would  not  subject  the 

agreed  that  goods  sold  or  services  rendered  party  from  whom  he  received  them  to  an 

to  such  customer  by  the  partnership  shall  action  by  the  firm,  — the  nature  of  the 

he  paid  for  by  a  debt  due  from  that  partner  case    is  not   changed,   if  the  party,  thus 

alone,  or  by  articles  furnished  for  his  sepa-  dealing  «ith  one  partner,   knows   at   the 

rate  use.     Thus,  one  of  a  firm  of  grocers  time  that  what  he  pays  for  labor,  materials, 

may  agree  with  a  tavern-keeper  that  the  &c.,  furnished  him  by  the  partnership,  is 

debt  of  the  latter  for  provisions  bought  of  intended  to  come  to  the  use  of  that  partner 

the  partnership  shall  be  set  off  against  the  alone.     The  disposition  of  the  articles,  or 

debt  of  the  former  for  entertainment  fur-  money,  received  by  one  partner,  for  benefits 

nished  at  tlie  inn.    Is  such  an  engagement,  conferred  by  the  partnership,  is  a  matter 

enteredintoby  one  partner,  valid  as  against  entirely   between   the   different    partners 

his  copartners,  who  are  not  privy  to  it  ?  Greeley  v.  Wyeth,  10  N.  H.  15 ;  White  v. 


§  137.] 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


179 


§  137.  yKThen  Fraudulent  Paper  binds  Firm.  —  A  bill  of  exchange 
thus  drawn  fraudulently  or  so  accepted,  or  a  promissory  note  so 
made  or  indorsed,  does  not  bind  the  firm  to  an  indorsee  of  the 
original  wrongful  holder  or  indorsee,  even  if  this  second  indorsee 
be  wholly  innocent,  unless  he  can  show  that  he  paid  a  considera- 
tion for  it.  (k)     Nor  would  it  be  good  in  his  hands,  whatever  the 


Toles,  7  Ala.  569  ;  Strong  v.  Fish,  13  Vt. 
277  ;  Halls  v.  Coe,  4  McCord,  136  ;  Hen- 
derson V.  Wild,  2  Camp.  561  ;  Perry  v. 
Butt,  14  Ga.  699.  See  also  M'Kee  v. 
Stroup,  Rice,  291  ;  Arnold  v.  Brown,  24 
Pick.  89,  93  ;  Yale  v.  Yale,  13  Conn.  185  ; 
contra.  Pierce  v.  Pass,  1  Porter,  232 ; 
Goode  I'.  M'Cartney,  10  Tex.  193  ;  Nor- 
nient  v.  Johnson,  10  Ired.  89  ;  Kamey  v. 
JMcBride,  4  Strobh.  12.  The  practical 
rule  applicable  to  the  point  is,  we  think, 
well  stated  in  Warder  v.  Newdigate,  11  B. 
Mon.  174,  177.  Where  the  plaintitfs, 
partners,  had  hoarded  with  the  defendant, 
and  each  had  told  him  "that  what  one 
might  call  for  would  be  the  same  as  if  both 
sliould  order  it,"  the  defendant's  account 
for  linuors,  &c.,  furnished  to  each,  was 
held  to  create  a  joint  indebtedness,  and  to 
constitute  a  valid  counter-claim  to  the 
deniiuid  of  the  two  plaintirts  for  goods  sold 
and  delivered.  Hartung  v.  Siccanli,  3  E. 
D.  Smith,  560.  It  has  been  held,  that  a 
suit  at  law  cannot  be  maintained  in  the 
names  of  all  the  partners,  for  a  debt  from 
which  one  of  the  joint  plaiutilfs  has 
already  discharged  the  defendant,  although 
such  discharge  may  have  been  a  fraud 
upon  the  firm,  in  which  the  released 
debtor  was  participant ;  as  where  it  has 
been  given  in  consideration  of  one  part- 
ner's receiving  a  discharge  from  his  private 
and  separate  debt.  Jones  v.  Yates,  9  B. 
&  C.  532,  539 ;  Wallace  v.  Kelsall,  7  M. 
&  W.  264  ;  Gordon  v.  Ellis,  7  M.  &  G. 
607,  621  ;  Greeley  v.  Wyeth,  10  N.  H.  15  ; 
Homer  v.  Wood,  11  Gush.  62.  Upon  simi- 
lar grounds,  it  is  said,  if  a  partnership 
draw  a  bill  of  exchange,  and  one  partner 
agrees  with  the  drawee,  though  in  fraud  of 
the  firm,  that  he  will  provide  for  it  when 
due,  tlie  firm  cannot  maintain  an  action  on 
the  bill  against  the  acceptor.  Piichmond 
i).  Heapy,  1  Stark.  202  ;  Johnson  v.  Peck, 
3  Stark.  66  ;  Si>arrow  v.  Chisman,  9  B.  & 
C.  241.     See  further  Longman  v.  Pole,  1 


Moody  &  M.  223 ;  and  compare  w  ith  Jones 
V.  Yates,  supra ;  Henderson  v.  Wild,  2 
Camp.  561.  See  also  Minor  v.  Gaw,  11 
Sm.  &  M.  322  ;  Brewster  v.  Mott,  5  111. 
378  ;  Purdy  v.  Powers,  6  Barr,  492. 
Though  a  discharge  or  a  release  from  a 
debt  by  one  of  several  plaintitfs  who  are 
partners,  is,  even  when  fraudulently  given, 
a  good  defence  to  the  joint  action,  yet  a 
receipt  of  payment,  given  by  one  of  several 
plaintitfs,  copartners,  is  nothing  more,  as 
evidence,  than  a  primajhcie  acknowledg- 
ment that  the  debt  sued  has  been  paid  ; 
and  the  plaintitfs  may,  notwithstanding, 
show  the  contrary.  Skaife  v.  Jackson,  3 
B.  &  C.  421  ;  Farrar  v.  Hutchinson,  9  A. 
&  E.  641 ;  Oi)inion  of  Parke,  B.,  in  Wal- 
lace V.  Ktdsall,  3  B.  &  C.  273.  See  Sher- 
wood  V.  Barton,  36  Barb.   284. 

(k)  Grant  v.  Hawkes,  Chitty  on  Bills, 
42 ;  Heath  v.  Sansom,  2  B.  &  Ad.  291. 
In  this  last  case,  Sansom  &  Evans  were 
partners  under  the  firm  of  Sansom  k  Co. 
Sansonr  was  also  a  partner  in  the  Droit- 
witch  Patent  Salt  Company  ;  and  being 
indebted  to  them,  drew  a  bill  in  the  name 
of  Sansom  &  Co.,  payable  to  the  Salt 
Company.  The  latter  indorsed  the  bill  to 
the  plaintiff,  though  not,  as  it  ayipeared, 
for  any  valuable  consideration.  The  plain- 
tiff brought  his  action  against  Sansom  & 
Evans.  It  was  held,  that  the  Droitwich 
Company  could  not  have  sued  Evans  on 
the  note,  it  being  given  to  them  in  fraud 
of  Evans  ;  and  that,  as  it  did  not  ajipear 
why  the  plaintiH  sued  the  makers  of  the 
note,  whom  he  did  not  know,  rather  than 
the  indorsers,  who  were  a  solvent  and 
well-known  partnership,  it  was  incumbent 
upon  the  plaintiff,  under  the  circum- 
stances, to  show  that  he  gave  a  valuable 
consideration  for  the  indorsement  to  him. 
It  was  held,  also,  Parke,  J.,  dissenticnte, 
that  in  all  cases  where,  from  defect  of 
consideration,  the  original  payees  cannot 
recover  on  the  note  or  bill,  the  indorsee, 


180 


THE   LAW    OF    PARTNERSHIP. 


[CH,    VII, 


consideration  he  gave,  if  he  also  was  aware  of  the  fraud  by  which 
his  indorser  obtained  it.  (Z) 


to  maintain  an  action  against  the  maker  or 
acceptor,  must  prove  consideration  given 
by  himself  or  a  prior  indorsee,  though  lie 
may  have  had  no  notice  that  such  proof 
will  be  called  for.  But  where,  in  an  ac- 
tion by  indorsee  against  acceptors  of  a  l>ill 
of  exchange,  some  of  the  defendants 
l)leaded  that  they  did  not  accei)t,  and  it 
was  ])ioved  that  all  the  defendants  were 
partners,  and  that  one  of  them,  who  had 
suttVred  judgment  by  default,  had  accepted 
the  bill  in  the  name  of  the  firm,  in  fraud 
of  the  partnershij),  and  not  for  partner- 
ship puri)oses,  it  was  held,  that  such  proof, 
without  evidence  of  knowledge  on  the  part 
of  the  plaintiti',  did  not,  under  the  issue, 
oblige  the  plaintiff  to  prove  the  circum- 
stances under  which  the  bill  was  indorsed 
to  him.  JMusgrave  v.  Drake,  5  Q.  B.  185. 
See  Heywood  r.  Watson,  4  Bing.  496 ; 
and  see  the  Mechanics'  Bank  v.  Foster, 
44  Barb.  87. 

(I)  If  the  partnership  prove  the  note 
or  bill  upon  which  it  is  sued  to  have  been 
issued  or  transferred  in  fraud  of  their 
rights,  the  burden  is  now  upon  the  claim- 
ant, through  the  original  wrongful  holder, 
to  show  that  he  took  it  fairly,  and  not 
under  circumstances  which  could  reason- 
ably operate  as  notice  of  the  fraud.  Mun- 
roe  v.  Cooper,  5  Pick.  412  ;  Arden  v. 
Sharpe,  2  Esp.  524.  See  Blair  Miller  v. 
Douglass,  Fac.  Coll.  No.  41.  p.  154  ; 
cited  in  Collyer  on  Part.  §  495.  And 
in  an  action  against  one  paitner  by 
the  payee  of  a  partnership  note,  the  other 
partner  is  a  competent  witness  for  the 
defendant,  to  prove  that  the  consideration 
of  said  note  was  for  the  witness's  exclusive 
benefit,  given  to  secure  a  debt  due  by  him 
on  his  own  account  ;  and  that  when  he 
signed  the  note  he  informed  the  plaintiff 
that  he  was  not  authorized  to  sign  the  de- 
fendant's name  to  it.  Robertson  v.  Mills, 
2  H  &  G.  98.  .But  it  is  not  necessary 
that  actual  bad  faith  .should  be  fastened 
upon  the  second  indorsee  of  a  fraudu- 
lently circulated  bill  or  note,  to  defeat  his 
claim  aaninst  the  firm.  It  is  sufficient  if 
the  ciriMimstances  under  which  he  became 
such  iudnrsee  show  that,  but  for  his  gross 
negligence,    he   would    have   learned  the 


fraud  in  which  the  pajter  originated,  or  by 
which  it  had  been  transferred.  N.  Y.  F. 
Ins.  Co.  r.  Bennett,  5  Conn.  574;  Smyth  v. 
Strader,  4  How.  404.  And,  it  seems,  that 
if  a  note  is  offered  at  a  bank,  by  one  \\ho 
became  a  party  to  it  as  intermediate  in- 
dorser, to  be  discounted  for  the  benefit  of 
the  offerer,  the  transaction  on  its  face 
would  import,  that  the  last  indorsement 
was  intended  merely  to  aid  the  negoti- 
ability of  the  paper,  and  would  throw 
upon  the  bank  discounting  the  paj)er  un- 
der such  circumstances,  the  onus  of  show- 
ing the  tiansaction  to  have  been  regular. 
Mauldin  v.  Branch  Bank  at  Mobile,  2  Ala. 
502.  See  Bank  of  Vergennes  v.  Cameron, 
7  Barb.  143,  150;  Cooper  r.  McClarkan, 
22  Pa.  80.  But  if  the  holder  of  a  part- 
nership negotiable  security,  issued  or 
negotiated  through  the  fraud  of  one  of 
the  paitners,  show  himself  to  be  a  bona 
Jidc  indorsee  for  value,  without  notice  of 
the  fraud,  the  undoubted  general  lule  is, 
that,  in  such  hands,  the  jiaper  is  binding 
on  the  firm  ;  and,  as  we  have  already 
seen,  knowledge  acquired  by  the  holder 
subsequently  to  his  taking  the  pa])er  will 
not  affect  the  bona  Jides  o\'  the  tiansaction. 
Arden  v.  Sharpe,  2  Esp.  524  ;  Wells  v. 
Masterman,  2  Esp.  731  ;  Lacy  v.  Wolcott, 
2  Dow.  &  R.  458 ;  Sanderson  v.  Brooks- 
bank,  4  C.  &  P.  286  ;  Usher  v.  Dauncey, 
4  Camp.  97  ;  Sutton  v.  Gregory,  2  Peake, 
150  ;  Ex  parte  Bushell,  8  Jur.  937  ;  Bank 
of  Kentucky  v.  Brooking,  2  Litt.  45 ; 
Livingston  v.  Roosevelt,  4  Johns.  279  ; 
Smith  V.  Lusher,  5  Cow.  689  ;  Vallett  v. 
Parker,  6  Wend.  619  ;  Catskill  Bank  v. 
Stall,  15  Wend.  364,  18  Wend.  466  ; 
Vernon  v.  Manhattan  Co.,  17  Wend.  524, 
22  Wend.  183  ;  Evans  v.  Wells,  22  Wend. 
325,  333,  20  Wend.  251  ;  North  River 
Bank  v.  Aymar,  3  Hill,  262  ;  Gildersleeve 
V.  Mahony,  5  Duer,  383  ;  Rich  i'.  Davis, 
4  Cal.  22  ;  I.e  Roy  v.  John.son,  2  Pet.  186; 
Emerson  v.  Harmon,  14  Me.  271  ;  Waldo 
Bank  v.  Lumbert,  16  Me.  416  ;  Dudley  v. 
Litt.lefield,  21  Me.  418  ;  Duncan  v.  Clark, 
2  Rich.  587  ;  Babcock  v.  Stone,  3  Mc- 
Lean, 172 ;  Commercial  Bank  v.  Lewis, 
13  Sm.  &  M.  226;  Freeman  r.  Ross,  15 
Ga.  252  ;  Calkins  v.  Smith,  48  N.  Y.  614. 


§  139.] 


RIGHTS    AND    DUTIES    OP    PARTNERS. 


181 


§  138.  Firm  when  Liable  on  Individual  Note.  —  Taking  the  indi- 
vidual note  of  a  member  of  a  firm  for  goods  sold  to  the  firm  will 
not  discharge  the  other  members  from  liability  for  the  goods, 
unless  there  be  an  agreement  with  the  firm  to  that  eifect.  And 
this  is  so  although  the  note  be  negotiable,  if  it  remains  in  the 
hands  of  the  payee. 0}') 

On  the  other  hand,  if  paper  be  drawn  or  discounted  or  received, 
bearing  only  the  signature  of  one  partner,  and  the  proceeds  are 
directly  carried  to  the  partnei'ship  funds,  the  partnership  cannot 
be  charged  ;  because  it  is  considered  that  the  credit  is  given  on 
negotiable  paper  only  to  those  whose  name  it  bears,  (m)  But  as 
between  the  partners  it  is  a  partnersliij^  note  ;  and,  if  one  partner 
pays  it,  he  may  charge  it  to  the  account  of  the  firm,  (nim) 

§  139.  Usual  Signature  binds  Firm.  —  The  strictness  of  the  rule 
has  been  relaxed  so  far  as  to  hold  the  firm  liable,  when,  by  proof 
of  usage  or  otherwise,  it  was  found  that  this  was  the  way  in 
which  they  signed  their  paper ;  for  this,  in  fact,  makes  the  part- 
ner's name  the  name  of  the  firm,  as  to  these  transactions,  (z^) 


Hence,  equity  will  restrniu  by  injunction 
the  negotiation  of  a  bill  of  exchange, 
tluiugh  in  the  hands  of  a  holder  for  value, 
if  he  took  it  knowing  that  it  had  been 
improperly  accepted,  by  one  of  the  i>art- 
iiers,  in  the  name  of  the  partnership. 
Hood  V.  Aston,  1  Riiss.  412.  In  general, 
however,  the  fact  that  one  partner  has 
given  the  partnership  name  on  his  own 
separate  account  is  a  matter  of  legal  de- 
fence only,  and  equity  cannot  relieve 
unless  defence  at  law  be  impracticable. 
Sneed  v.  Cogle,  4  Litt.  162. 

To  an  action  by  indorsee  against  A.  & 
B.,  as  drawers  of  a  bill  of  exchange,  in- 
dorsed to  C,  and  by  him  to  the  plaintiff, 
A.  pleaded  that  lie  and  B.  were  in  copart- 
nership as  brewers ;  that  B.  made  and 
indorsed  the  bill,  using  the  name  of  the 
firm,  in  fraud  of  A.,  and  not  for  the  pur- 
poses of  the  copartnership,  but  for  his 
own  private  purposes,  namely,  for  a  pri- 
vate debt  due  fiom  him  to  C,  and  without 
tlie  knowledge  or  consent  of  A.;  that  there 
was  no  consideration  or  vahie  to  him,  A., 
for  the  drawing  or  indorsement  of  the  bill : 
of  all  which  premises,  C,  at  the  time  of 
the  indorsement  to  him,  had  knowledge 
and  notice  ;  and  that  at  the  time  when 
the  bill  was  indorsed  and  delivered  to  the 
plaintitT,  he  had  full  knowlt^dge  and  notice 


of  all  the  premises  in  the  plea  aforesaid. 
Replication,  that,  at  the  time  when  the 
bill  was  indorsed  and  delivered  to  the 
plaintiff,  he  had  not  any  such  knowledge 
or  notice  as  in  the  plea  mentioned  ;  and 
issue  thereon.  At  the  trial,  the  jury 
found  that  C.  had  no  knowledge  of  the 
original  fraud  in  the  drawing  of  the  bill ; 
but  that  the  plaintiff,  at  the  time  of  the 
indorsement  to  him,  had  knowledge  of  that 
fraud.  It  was  held,  that  the  plea  was  not 
proved.  May  v.  Chapman,  16  M.  &  W.  3.^5. 
(jj)  Folk  V.  Wilson,  21  Md.  538.  [See 
ante,  §  89.] 

(hi)  Farmers'  Bank  of  Mo.  v.  Bayless, 
35  Mo.  428,  41  Mo.  274  ;  Emly  v.  Lye,  15 
East,  7  ;  Siffkin  v.  Walker,  2  Camp."  308  ; 
Ex  parte  Hunter,  1  Atk.  223  ;  Ex  parte 
Bolitho,  Buck,  100  ;  Denton  v.  Rodie,  3 
Camp.  493  ;  Bevan  v.  Lewis,  1  Sim.  376. 
See  Loyd  v.  Freshfield,  2  C.  &  P.  325; 
Grneff  y.  Hitchni^n,  5  Watts,  454  ;  Ja(|ues 
I'.  Mar(|uand,  6  Cow.  497;  Willis  u.  Hill, 
2  Dev.  &  B.  231  ;  Allen  v.  Coit,  6  Hill, 
318  ;  Rogers  v.  Coit,  6  Hill,  322  ;  Green 
V.  Tanner,  8  Met.  411.      [See  ante,  §  88.] 

(jnm)  Sprague  y.  Ainsworth,  40  Vt.  47. 

ill)  South  Carolina  Rank  v.  Case.  8  B. 
&  C.  427.  And  see  Hubbell  v.  M'oolf,  15 
Ind.  204  ;  Schollenberger  v.  Seldouridge, 
49  Fa.  83. 


182  THE    LAW    OF    PARTNERSHIP.  [CH.    VII. 

So,  too,  if  a  partner  uses  neither  his  own  name  nor  that  of  the 
firm,  but  a  fictitious  one,  and  does  this  in  partnership  business 
and  on  partnership  account,  if  his  partnership  can  be  shown  to 
have  authorized  or  to  have  adopted  the  act,  they  will  be  held  as  if 
this  name  were  theirs,  (o) 

§  140.  Two  Firms  with  Common  Member.  —  If  there  be  two 
houses  of  the  same  name,  entirely  independent  and  disconnected 
in  their  business,  no  other  difficulty  can  arise  than  what  may 
occur  when  one  man  is  charged  as  liable  on  paper  which 
another  man  of  the  same  name  has  made.  It  is  a  question  of 
fact,  and  not  of  law.  But  if  there  be  one  person  who  is  a  part- 
ner in  both  of  these  houses,  a  new  question  arises.  And  it  seems 
to  be  held,  that  a  partner  in  one  may  be  made  liable  on  the  paper 
of  the  other,  unless  he  could  show  that  the  holder  knew  that  the 
paper  was  that  of  the  other  exclusively  :  (5-)  as  a  general  rule, 
it  may  be  said  that  if  two  or  more  firms  are  connected  in  busi- 
ness, and  use  the  same  name,  a  holder  of  the  paper  having  that 
name  may  charge  upon  it  either  of  the  partnerships,  at  his  own 
election  ;  unless  he  knew,  or  ought  to  have  known,  definitively, 
that  it  belonged  to  one  of  them,  and  not  to  the  other.  But  though 
he  may  thus  elect  to  consider  it  as  the  paper  of  one  or  the  other, 
he  cannot  treat  it  as  the  paper  of  both,  unless  their  connection  be 
such  as  to  make  them  in  fact  but  one  firm,  (r) 

§  141.  Joint  and  Several  Notes.  —  A  joint  and  several  note  by  all 
the  members  of  a  firm  is  not  strictly  a  partnership  note,  nor  has 
it  the  same  effect ;  ^  nor  could  the  holder,  in  case  of  insolvency, 


(0)  Williamson  v.  Johnson,  1  B.  &  C.  (?•)  M'Nair  v.  Fleming,  cited  in  Jlont. 

146.  on   Part.  37,  3   Dow.  229  ;  Miller  v.  Con- 

(q)   Baker  v.  Charlton,  1  Peake,  80.  solidation  Bank,  48  Pa.  514. 


^  A  note  signed  by  the  partners  individually  is  not  upon  its  face  a  partnership  note  ; 
and  the  presumption  is  that  on  such  a  note  the  partners  individually  are  bound,  but 
not  the  firm.  Freeman  v.  Cami)bell,  55  Cal.  19"  ;  Ex  parte  Weston,  12  Met.  1.  But 
if  the  note  was  given  for  partnership  purposes,  it  binds  the  firm.  In  re  Thomas, 
17  N.  B.  R.  54,  8  Hiss.  139;  De  Jarnette  r.  McQueen,  31  Ala.  230;  Iddings  v. 
Pierson,  100  Ind.  418  ;  Carson  v.  Byers,  67  la.  606,  25  N.  W.  826  ;  Ex  parte  Nason, 
70  Me.  363  ;  Trowbridge  v.  Cushman,  24  Pick.  310  ;  Agawam  Bank  v.  Morris,  4  Gush. 
99  ;  Maynard  v.  Fellows,  43  N.  H.  255  :  McKee  v.  Hamilton,  33  Oh.  St.  7  ;  Wairiner 
V.  Mitchell,  128  Pa.  153,  18  Atl.  337  :  Kendrick  v.  Tarbell,  27  Vt.  512.  So  of  a  bond: 
Ex  parte  Stone,  L.  R.  8  Ch.  914  ;  Howell  v.  Moores,  127  111.  67  ;  Berkshire  AVoolen 
Co.  V.  Juillard,  75  N.  Y.  535.  But  see  In  re  Holbrook,  2  Low.  259  ;  In  re  Herrick, 
13  N.  B.  R.  312  ;  Turner  v.  Jaycox,  40  N.  Y.  470  ;  Crouch  v.  Emmerson,  3  Humph. 
209.  So  where  one  partner  draws  and  the  other  indorses  a  note  for  partnership  pur- 
poses, it  has  been  held  a  firm  note.  Colwell  v.  Weybosset  Nat.  Bank,  16  R.  I.  2S8, 
15  Atl.  80,  17  Atl  913. 


§  l^lj 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


183 


claim  from  the  partnership  funds  ;  and,  if  it  be  signed  by  some 
of  the  jjartners  only,  it  will  have  no  operation  against  those  not 
signing  it.  (s) 

That  one  partner  may  sign  a  note  so  as  to  hold  all  jointly  and 
himself  severally,  there  can  be  no  doubt.  If  A.  makes  a  joint 
and  several  note,  and  signs  it  "A.,  B.,  &  Co.,"  and  also  "A.," 
he  may  perhaps  be  so  held.  If  there  be  no  words  making  it  joint 
and  several,  it  is  only  the  joint  note  of  all,  which  it  is  by  the  sig- 
nature A.,  B.,&  Co. ;  and  therefore  the  signature  A.  is  surplusage 
and  inoperative.^  But  if  the  signature  is  "A.,  B.,  &  Co.,  by  A.," 
then  it  is  certainly  the  signature  of  the  company  by  an  agent, 
who  might  be  held  severally,  if  want  of  authority  or  othei*  cir- 
cumstances made  him  so  liable,  but  who  is  no  more  held  in 
severalty  because  he  is  a  partner  than  he  would  be  if  he  were 
not.  If  the  words  were,  "  I  i)romise,"  etc.,  it  might  tend  to  hold 
the  signer  severally,  but  would  not,  we  think,  be  suthcient  for 
this.(p) 


(s)  Peri'ingy.  Hono,  4  Bing.  28  ;  Crouch 
V.  Bowman,  3  Huiiiiih.  209.  See  Norton  v. 
Seymour,  3  C  B.  792 ;  Kendrick  v.  Tarbell, 
27  Vt.  512  ;  In  re  Warren,  Daveis,  320  ; 
Filley  v.  Plielps,  18  Conn.  294  ;  De  Jarnette 
V.  McQueen,  31  Ala.  230  ;  ((7ile,  §  97. 

(^>)  See  Galway  v.  Matthew,  ]  Camp. 
403.  This  case  expressly  decides  that  on 
a  note  of  tlie  above  description  the  whole 
firm  are  liable.  But  it  is  an  inference  only 
that  in  such  a  case  the  partner  signing  his 
own  and  the  firm's  name,  could  be  separa- 
tely sued.  This,  however,  is  expressly 
decided  in  Hall  v.  Smith,  IB.  &  C.  407". 
But  Hall  V.  Smith  h;is  been  overruled  in 
the  Exchequer,  and  cannot  now  be  regarded 
as  an  authoritative  decision.  See  Ex 
parte  Buckley,  14  M.  &  W.  469.  Parke, 
B. :  "I  really  must  say  that  I  think  Hall 
V.  Smith  cannot  be  supported."  Alder- 
son,  B.,  concurred.  Piatt.:  "I  have  no 
doubt  that  Hall  v.  Smith  cannot  be  sup- 
ported." Maclae  v.  Sutherland,  3  E.  &  B. 
34,  35  ;  Staats  v.  Howlett,  4  Denio,  559. 
Compare  Owen  v.  Van  Uster,  10  C.  B. 
319.  See  also  Fx  parte  Christie,  8  Jur. 
919.  See  also  Wilks  v.  Back,  2  East,  142  ; 
Doty  V.  Bates,  11    Johns.  544.      In  this 


last  case,  a  note  made  by  one  partner, 
and  beginning,  "  I  promise  to  pay,  "  but 
signed  with  the  name  of  the  firm,  was  held 
binding  on  the  partnership,  as  meaning, 
"7,  07ie  of  the  partners,  promise  on 
behalf  of  the  firm,"  &c.  A  note  signed  by 
one  partner  only,  "  for  himself  and  part- 
ners," will  satisfy  the  terms  of  an  Act  of 
Parliament,  which  requires  a  writing  to  be 
signed  "  with  his  or  their  name  or  names," 
and  will,  therefore,  be  a  valid  note,  and 
binding  on  the  firm.  Meux  i\  Humphrev, 
8  T.  R.  2*57.  See  Smith  v.  Bailey,  11  Mod. 
401.  And  if  in  an  action  against  the 
drawers  of  a  bill,  or  the  makers  of  a 
promissory  note,  the  declaration  states  the 
defendants  to  have  made  the  bill  or  note, 
"  their  own  proper  hands  being  thereunto 
subscribed,"  a  bill  or  note  subscribed  with 
the  partnership  name  of  the  defendants  by 
one  of  them  is  suflHeient  to  support  such 
averment.  Jones  v.  Mars,  2  Camp.  305  ; 
Porter  v.  Cumings,  7  Wend.  172.  See 
Snow  V.  Howard,  35  Barb.  55.  Whether 
it  is  within  the  general  implied  powers  of 
one  partner  to  hind  his  copartner  in  an 
obligation  which  shall  make  him  severally 
liable  to  a  creditor,  so  as  to  deprive  such 


^  Where  a  partner  signs  commercial  paper  with  the  firm  name  and  adds  his  own 
name  under  it,  the  partner  seems  not  to  be  held  liable  separatelv.  In  re  Barnard, 
32  Ch.  D.  447  (C.  A.) ;  Makomsou  v.  Malcomson,  L.  R.  1  Ire.  228. 


184  THE    LAW    OF    PARTNERSHIP.  [CH.   VII. 

S  142.  Debt  incurred  before  Formation  of  Partnership.  —  If  a 
partnership  be  contemi)latcd  and  agreed  upon,  and  a  purchase  is 
made  or  a  debt  otherwise  incurred  by  one  of  the  partners  for  the 
partnership,  but  before  the  actual  formation  of  the  partnership,  it 
is  only  the  debt  of  that  partner :  but  this  indebtedness  is  a  suth- 
cient  consideration  to  sustain  tlie  subsequent  promise  of  the 
partnership  when  formed,  given  in  lieu  of  it  or  to  secure  it.  Q) 

§  143.  Accommodation  Paper,  —  There  are  some  acts  in  rela- 
tion to  negotiable  paper  which  carry  with  them  the  presumption 
that  the  partner  doing  them  was  not  authorized.  One  of  these  is 
the  indorsing  of  paper  which  does  not  belong  to  the  firm.  This 
is,  in  fact,  lending  or  giving  the  credit  of  the  firm.  There  can  be 
no  doubt  that  this  is  frequently  done  by  mercantile  firms.  Some- 
times they  lend  their  credit,  and  are  paid  for  it  by  a  compensation 
for  the  guaranty.  Sometimes  they  reciprocate  accommodation 
paper  with  another  firm,  each  indorsing  for  the  benefit  of  the 
other  ;  and  the  notes  are  of  the  same  amount,  or  equalized  in  some 
way,  and  perhaps  made  for  some  Ijroken  amount,  to  give  them 
the  appearance  of  business  paper.  Of  course,  a  partnership  is 
liable  where  it  authorizes  any  such  use  of  its  name.  But  this  is 
no  part  of  general  and  regular  mercantile  business,  and  therefore 
the  presumption  of  the  law  is  rather  against  the  authority  of  the 
partner  who  so  signs  the  name,  (m)  But  this  presumption  may 
be  overcome  not  only  by  direct  evidence  of  authority,  but  from 
usnge  or  frequent  recognition  of  such  signature,  or  such  other 
similar  facts  as  would  satisfy  a  jury  that  the  signature  was  for  the 
partnership  and  by  its  authority. (y) 

copartner    of  a  defence  in  abatement  for  is  in  reality  for  the  benefit  of  the  partner- 

the  nonjoinder  of  his  codebtor  as  defend-  ship,  rather  than  for  that  of  him  to  whom 

ant,    when   prosecuted   at   law   upon   the  it  is  given.     As  where  a  bill,  drawn  by 

obligation,   is  doubted    by  Wells,  J.,   in  oue  ]iartner  upon  the  firm,  and  accepted 

Ganson  v.  Lathrop,  25  Barb.  455.  by  liim  in  the  firm's  name,  for  the  acconi- 

(/)  Saville  ?'.  Robertson,  4  T.   R.  720.  niodation    of   the   payee,  is  given  in  ex- 

(«)  The  principle  is  clearly  stated  by  change  for  the  paper  of  the  latter,  to  be 

Walwortii,  Chancellor,  in  Stall  v.  Catskill  used  in  raising  money  for  the  purposes  of 

Bank,  18  Wend.  466,  477.    See  also  Bank  the  partnership.  Gano  v.  Samuel,  14  Ohio, 

of  Tennessee  v.  Saffarrans,  3  Humph.  597.  592. 

New  York  F.  Ins.  Co.  v.  Bennett,  5  Conn.  (v)  Bank  of  Tennessee  v.  SaflTarrans,  3 

574  ;  Mauldin  v.   Branch  Bank  at  Mobile,  Humph.  597;  Whaleyv.  Moody,  2  Humph. 

2  Ala.  502  ;  Lang  v.  Waring,  17  Ala.  145  ;  495  ;  Oansevoort  v.  Williams,   14  Wend. 

Gansevoort  v.    Williams,  14   Wend.   133,  133,  139  ;    Chenowith  v.    Chamberlin,  6 

139  ;    Williams   v.  Walbridge,    3  Wend.  B.  Mon.  60  ;  Sweetser  v.  French,  2  Cush. 

415;  Austin  r.  Vandermark,  4  Hill,  261  ;  309;  Bank  of   Kentucky  v.   Brooking,  2 

Bank  of  Vergennes  v.   Cameron,  7   Barb.  Lift.  41,  45  ;  Darling  v.   March,   22  Me. 

143,  150.     But  this  presumption  does  not  184,  188  ;  Tanner  v.  Hall,   1   Barr,   417  ; 

arise  where  accommodation  paper,  executed  Dundass  r.  Gallagher,  4  Barr,  205.      But, 

by  one  partner  in  the  name  of  the  firm,  though  it  ajipear  that  each  of  two  part- 


§  1^-i] 


RIGHTS    AND    DUTIES    OF   PARTNERS. 


185 


§  144.  Guaranty  iii  Name  of  Firm.  —  It  is  also  a  general  rule, 
that  no  pailner  has  any  authority  implied  from  the  mere  fact  of 
partnership  to  become  surety  for  any  debt  in  any  way,  and  bind 
the  partnership  thereto,  (iw)  The  reason  from  which  this  rule 
originated,  is,  that  the  proper  business  of  a  partnership  is  most 
usually  buying  and  selling ;  and  therefore  there  is  seldom  a  pre- 
sumption that  anything  but  this  is  within  their  business.  And 
the  same  rule  applies,  for  the  same  reason,  to  guaranties  given  by 
one  partner  in  the  name  of  the  firm.  But  the  question  is  always 
0])en  to  evidence  ;  and  the  holder  of  the  guaranty  may  show  not 
only  the  peculiar  usage  of  that  firm,  or  their  frequent  recognition 
of  such  guaranties,  (a;)  but  also  that  the  nature  of  their  business 
is  such  as  to  make  this  giving  of  guaranties  a  part  of  it.  So 
Lord  Mansfield  said  in  relation  to  bankers  ;  (y)  and  it  has  been 


ners  has  repeatedly,  with  the  knowledge 
and  assent  of  the  other,  indorsed  accom- 
modation notes  in  the  firm  name,  this  is 
not  sufficient  evidence  that  either  of  them 
is  authorized  to  sign  the  firm  name  to  such 
paper  as  maker  and  surety.  Early  v.  Reed, 
6  Hill,  12.  Paper,  however,  to 'which  the 
partnership  name  has  been  affixed  by  one 
partner  by  way  of  accommodation,  is 
always  binding  upon  the  firm,  in  the 
hands  of  a  bona  fide  holder  of  value, 
taking  it  without  notice  of  the  circum- 
stances, express  or  implied.  Id. ;  C'atskill 
Bank  v.  Stall,  15  Wend.  364  :  Austin  v. 
Yandermark,  4  Hill,  2f)9  ;  Gano  v.  Samuel, 
14  Ohio,  592  ;  Waldo  Bank  v  Lumbert, 
16  Me.  416  ;  Mauldin  i'.  Branch  Bank  at 
Mobile,  2  Ala.  503,  513  ;  Beach  v.  State 
Bank,  2  Ind.  488. 

(«•)  Foot  V.  Sabin,  19  Johns.  154; 
Laverty  v.  Burr,  1  Wend.  531  ;  N.  Y.  F. 
Ins.  Co.  V.  Bennett,  5  Conn.  574,  580  ; 
Andrews  v.  Planters'  Bank,  7  Sm.  &  M. 
192  ;  Langan  v.  Hewt-tt.  13  Sm.  &  M. 
122  ;  Wagnon  v.  Clay,  1  A.  K.  Marsh.  257  ; 
Rollins  I'.  Stevens,  31  Me.  454  ;  New 
York  F.  Ins.  Co.  v.  Bennett,  5  Conn.  583  ; 
Butler  V.  Stocking,  8  X.  Y.  408.  See 
farther  for  the  general  principle,  Sweetser 
V.  French,  2  Cush.  309,  314  ;  Rolston  v. 
Click,  1  Stewart,  526  ;  Kibbler  v.  De 
Forest,  6  Ala.  92  ;  Bank  of  Rochester  v. 
Bowen,  7  Wend.  158  ;  Long  v.  Carter,  3 
Ired.  238.  The  ratification  by  a  firm  of 
the    unauthorized  act  of   one  partner,  in 


signing  the  firm  name  to  a  contract  of 
suretyship,  is  ineffectual  as  against  existing 
partnership  creditors,  being  in  substance 
an  adoption  by  the  firm  of  a  private  debt 
of  one  i)artner.  Kidder  v.  Page,  48  N. 
H.  3S0. 

(./ )  And  a  recognition  and  adoption, 
express  or  implied,  subsequent  to  the 
giving  of  the  guaranty,  may  be  given  in 
evidence  as  well  as  a  prior  authority  ;  and 
either  the  one  or  the  other  may  be  shown 
by  parol  as  well  as  by  a  written  document. 
Duncan  v.  Lowndes,  3  Cami).  478  ;  Ex 
2}arte  Nolte,  2  Glyn  k  J.  305,  306  ;  Craw- 
ford V.  Sterling,  4  Esp.  207  ;  Halseham  i'. 
Young,  5  Q.  B.  833  ;  Long  v.  Carter,  3 
Ired.  241  ;  Mayberry  v.  Bainton,  2  Harr. 
Del.  24.  See  Coursey  v.  Baker,  7  H.  & 
J.  28.  In  Sweetser  v.  French,  2  Cush. 
309,  314,  Metcalf,  J.,  states  very  clearly 
the  law  respecting  guaranties  as  established 
both  in  England  and  this  country.  See 
also  Hamill  v.  Purvis,  2  Barr,  177  ;  Sutton 
V.  Irwine,  12  S.  &  R.  13.  Partners  may 
give  in  evidence  a  disclaimer  of  a  guaranty, 

and  a  refusal  to  be  concerned  in  it. 

V.  Layfield,  1  Salk.  292.  And  whether  a 
guaranty  has  been  given  by  one  partner 
with  the  privity  and  consent  of  all,  is 
a  question  for  the  jury.  Payne  v.  Ives,  3 
Dow.  &  R.  664. 

(v)  Hope  V.  Gust,  1  East,  53.  If  a 
guaranty  given  by  one  partner  can  be 
considered  as  an  assurance  or  represen- 
tation made  in   the  usual  course  of,  and 


186  THE   LAW    OF    PARTNERSHIP.  [CH.    VII. 

held,  that  in  horse-dealing  it  is  so  customary  to  sell  with  war- 
ranty, or  rather  so  rare  to  sell  without  it,  that  a  buyer  may 
presume  that  a  partner  (or  any  agent)  having  authority  to  sell 
has  thereby  authority  to  warrant,  (z)  The  power  or  authority 
to  sell  generally  does  not  carry  with  it  the  power  to  warrant ;  but 
we  should  be  disposed  to  hold  that  a  warranty  by  any  partner,  of 
the  ])roperty  of  the  firm  lawfully  sold  by  him,  Avould  hold  the 
firm,  if  made  and  received  in  good  faith,  (a) 

§  145.  Power  to  indorse  Negotiable  Paper. —  [The  indorsement 
of  commercial  paper  has  a  double  effect :  it  passes  property  and 
it  binds  the  indorser  to  a  subsequent  holder.  We  have  seen  that 
one  partner  has  power  to  transfer  firm  property,  and  therefore  to 
indorse  a  firm  note  for  the  purpose  of  transferring  it :  ^  he  has  the 
power  by  his  indorsement  in  the  firm  name  also  to  bind  the  firm 
to  subsequent  holders.^ 

If  he  indorses  firm  paper  for  his  private  purpose,  the  indorsee 
cannot  of  course  hold  the  paper  against  the  firm ;  nor  could  any 
subsequent  holder  with  notice.^  It  becomes  important  therefore  to 
determine  what  transactions,  apparent  on  the  face  of  the  note, 
are  notice  of  fraud  on  the  firm.  Where  the  private  note  of  a 
partner  is  indorsed  by  the  firm  name,  the  firm  not  being  a  party 

with  reference  to,  the  business  of  the  firm,  Sandilands  v.   Marsh,   2  B.  &  Aid.   679. 

it   will    be   binding   on    the   partnership,  See  Penn  v.  Harrison,  3  T.  R.  760. 
as  being  an  act  entirely  within  the  scope  (a)   In  Sweet  v.  Bradlej',  24  Barb.  549, 

of  one  partner's  authorit.y.  .  See  Crawford  the   defendant,  a  member  of    the  firm  of 

V.  Sterling,  4  Ksp.  209;  Sutton  i'.  Irwine,  B.    Bradley  &  Co.,  sold  some  promissory 

12  S.  &  r!  13.      Bat  one  partner  will  not  notes  belonging  to  the  firm,  received  the 

be  deemed  to  have  the  power  of  giving  a  proceeds,  and  applied  them  to   the  use  of 

guaranty  in  the  name  of  the   firm,  merely  the  firm.      At   the  sale,    he  assured  the 

in  consequence  of  its  being  a  rcaxonahU  purchaser  of    the    pajier  that   he   would 

mode  of  carrying  into  etiect  an  acknowl-  warrant  that   the  notes  were  given  in  the 

edged  partnership  contract.      Brettel    v.  regular  course   r)f  business,  and  would  be 

"VvTlliams   4  Exch.  623.  paid  ;  that  the  makers  and  indorsers  were 

(;:)  "  A  case  may  be  put,   where  two  responsible  and  men  of  abundant  means, 

persons   in    partnership,    for   the   .sale   of  Tlie  notes  having  been   bought  upon  the 

horses,  should    agree  between  themselves  strength  of   these  and  other  similar  repre- 

never  to  warrant  any  horse  ;  yet,  though  sentations,  which  proved  to  be  false,  it  was 

tliis  be  their  course  of  business,  there  is  no  held   that   the    firm    was   bound    by   the 

doubt  that  if  upon  the  sale  of  a  horse,  the  representations  of  the  partner  who  sold  the 

].io].erty  of  the  partnership,  one   of  them  notes  ;  and  that  an  action  would  lie  against 

.sho\ild  give  a  warranty,  the  other  would  all    the   members  of    the  firm,  ujion   the 

be  thereby  bound."    Per  Abbott,  C.  J.,  in  warranty. 

1  Ante,  §  108. 

2  Waldo  Bank  v.  Lumbert,  16  Iile.  416  ;  Tevis  v.  Tevis,  24  Mo.  535  ,  Tompkins  v. 
Woodvard,  5  W.  Va.  216. 

■  8  Second  Nat.  Bank  v.  Hume,  4   Mack.   90;    Allen  v.  Cary,  33  La.  Ann.    1455; 
Livingstone  v.  Roosevelt,  4  Johns.  251. 


§  147.]  RIGHTS    AND    DUTIES   OF   PARTNERS.  187 

to  the  note,  the  indorsement  is  clearly  for  the  accommodation  of 
the  partner,  and  any  holder  lias  notice  that  it  was  not  made  in 
the  course  of  business,  and  is  put  upon  his  inquiry.^  But  where 
the  note  of  an  individual  partner  is  made  payable  to  a  firm,  and 
is  indorsed  by  the  partner  in  fraud  of  the  firm,  an  innocent  holder 
for  value  may  enforce  it  against  the  firm,^  although  the  individual 
creditor  to  whom  it  was  given  could  not,  in  the  ordinary  case.^ 
So  where  a  j)artner  draws  a  firm  draft  to  his  own  order,  this  is 
not  of  itself  notice  of  irregularity.*  Where  a  partner  in  two  firms 
makes  a  note  in  the  name  of  one  firm  payable  to  tlie  other,  and 
indorses  the  name  of  the  other  firm,  a  subsequent  holder  for  value 
is  not  affected  witli  notice.^] 

§  146.  Notice  of  Dishonor. —  [Notice  of  the  dishonor  of  negoti- 
able paper  is  good  if  sent  to  a  single  partner,  whether  before  or 
after  dissolution. '^j 


SECTION  IV. 

OF  THE   POWER   OF   A  MAJORITY   OF   THE   PARTNERS. 

§  147.  Power  of  a  Majority.  —  Whether  a  majority  in  numbers  of 
the  partners  can  lawfully  control  the  rest,  and  conduct  the  affairs 

1  National  Bank  of  the  Commonwealth  v.  Law,  127  Mass.  72  ;  Tanner  v.  Hall,  1 
Ban-,  417;  Cooper  v.  McClurkan,  22  Pa.  80  ;  (but  see  Ihmsen  v.  Negley,  25  Pa.  297;) 
Tompkins  r.  Woodyard,  5  W.  Va.  216.  Contra,  Bank  of  Commonwealth  v.  Mudgett, 
44  N.  Y.  514. 

2  Redlon  v.  Churchill,  73  Me.  146  ;  Manning  v.  Hays,  6  Md.  5  ;  Atlas  Nat.  Bank 
V.  Savery,  127  Mass.  75. 

3  Mechanics'  Bank  v.  Barnes,  86  Mich.  632,  49  N  W.  475  ;  Tevis  v.  Tevis,  24  Mo. 
535  ;  Commercial  Bank  v.  Warren,  15  N.  Y.  577. 

4  Haldeman  v.  Bank  of  Middletown,  28  Pa.  440. 

5  Atlantic  State  Bank  v.  Savery,  82  N.  Y.  291.  But  if  the  note  were  made  to  the 
order  of  the  partner,  so  that  the  second  firm  was  a  party  only  as  indorser,  this  would 
seem  to  be  notice  that  the  note  was  not  given  in  the  course  of  business  of  the  second 
firm.  Contra,  however,  Ihmsen  v.  Negley,  25  Pa.  297.  Where  a  partner  drew  and 
signed  a  note,  and  under  his  own  signature  added  that  of  the  firm,  it  was  held  to  be  a 
question  for  the  jury  whether  the  form  of  the  note  was  notice  of  any  iiTegularity. 
Sherwood  v.  Snow,  46  la.  481.     See  Ames,  Cases  on  Part.  527  n.,  533  n. 

6  Coster  V.  Thomason,  19  Ala.  717  ;  Slocomb  v.  Lizardi,  21  La.  Ann.  355  ;  People's 
Bank  v.  Keech,  26  JId.  521  ;  BouMin  v.  Page,  24  Mo.  594  ;  Fourth  Nat.  Bank  r. 
Altheimer,  91  Mo.  190,  3  S.  W.  858  ;  Hubbard  v.  Matthews,  54  N.  Y.  43.  See  Bank 
of  America  v.  Shaw,  142  Mass.  290,  7  N.  E.  779.  If  one  partner  resides  at  a  distance 
from  the  firm  business  and  tlie  place  of  payment,  notice  to  him  alone  has  been  held  not 
sufficient.  Hume  v.  Watt,  5  Kas.  34.  After  the  death  of  a  partner,  notice  to  the  sur- 
viving partner  has  been  held  sufficient  to  bind  the  estate  of  the  deceased  jiartiier. 
Dabney  v.  Stidger,  4  Sm.  &  M.  749.  But  see  Cocke  v.  Bank  of  Tennessee,  6  Humph. 
51,  contra. 


188  THE   LAW   OF   PARTNERSHIP.  [CH.    Til. 

of  the  partnership  at  their  own  pleasure,  has  been  much  discussed. 
At  one  time  there  was  certainly  a  strong  tendency  to  sustain  this 
power,  and  to  extend  it  over  all  the  affairs  of  the  partnership, 
provided  only  that  it  was  exercised  honestly  and  deliberately,  and 
with  every  reasonable  opportunity  to  the  minority  to  make  their 
wishes  and  the  reasons  for  their  wishes  known  and  duly  con- 
sidered. It  has,  as  certainly,  been  the  tendency  of  the  courts  in 
later  years  to  limit  this  power  narrowly,  and  almost  confine  it 
within  what  may  be  called  the  domestic  acts  of  the  firm  ;  as,  for 
example,  the  appointment  or  salary  of  a  clerk,  the  arrangements 
of  the  counting-room,  method  of  conducting  sales,  or  keeping 
accounts,  and  the  like.  And,  even  as  to  these,  it  is  put  upon  the 
apparent  necessity  of  deciding  as  to  how  that  shall  be  done  which 
must  be  done  in  some  way.  Whereas,  if  the  partnership  cannot 
agree  about  a  purchase,  or  a  sale,  it  may  be  omitted,  and  the 
business  nevertheless  go  on.  Recent  American  decisions  appear 
to  enlarge  this  power  somewhat.  Thus,  it  has  been  held  that  a 
majority  of  a  firm  established  to  publish  a  newspaper  has  author- 
ity to  appoint  or  remove  a  publisher,  (^oa')  It  will  be  apparent, 
however,  from  the  authorities  presented  in  our  note,  that  the  law 
as  to  the  power  and  authority  of  a  majority  of  copartners  cannot 
be  considered  as  definitively  established.  (6) 

(rtffl)    Peacock   v.    Cummings,    46   Pa.  major    part    of    the    part-owners    should 

434.     But  see  Yeager  v.  Wallace,  57   Pa.  conclude  the  rest.     And   in    Falkland  v. 

365.  Cheney,  5   Bro.  P.  C.    476,   1   Bro.   P.   C. 

ib)  Chitty  says  (3  Laws  of  Commerce,  (Dublin  ed.)  90,  it  seems  to  have  been 
236)  that,  in  the  absence  of  express  stip-  laid  down  as  a  general  principle  that,  in 
Illations  between  the  partners,  "  a  majoi--  all  sea  adventures,  the  act  of  a  majority 
ity  must  decide  as  to  the  disposal  of  the  binds  the  whole.  But  in  that  case  such 
partnership  property  ;  or,  if  no  majority  power  was  given  to  the  majority  by  the 
can  be  obtained  to  decide  as  to  such  dis-  articles  of  association.  See  Lloyd  v.  Loa- 
posal,  or  there  are  but  two  partners  in  the  ring,  6  Ves.  777.  Perhaps  the  weightiest 
firm,  one  or  more  partners  may  manage  authority  to  be  found  in  the  English 
the  concern  as  they  think  fit ;  provided  it  books  is  the  dictum  of  Lord  Eldon  in 
be  within  the  rules  of  good  faith,  and  Const  v.  Harris,  Turner  &  R.  516,  525. 
warranted  by  the  circumstances  of  the  After  declaring  that  the  act  of  the  major- 
case."  To  this  CoUyer  adds  (Collyer  on  ity  of  the  partners  is  to  be  considered  the 
Part.  §  197):  "It  will  be  observed  that  act  of  all,  he  adds:  "I  call  that  the  act 
this  opinion  is  given  with  considerable  of  all,  which  is  the  act  of  the  majority, 
caution,  and  jierhaps  it  may  be  laid  down  provided  all  are  consulted  and  the  nuijor- 
that,  in  a  partnership  without  articles,  the  ity  are  actiug  bond  fide  ;  meeting,  not  for 
power  of  the  majorit}'  to  bind  the  minor-  the  purpose  of  negativing  what  any  one 
ity  is  confined  to  the  ordinary  transactions  may  have  to  offer,  but  for  the  purpose  of 
of  the  fiartnership."  The  English  author-  negativing  what,  when  they  are  met  to- 
ities  on  the  point  are  few,  and  by  no  means  gether,  they  ma)',  after  due  consideration, 
conclusive.  In  Robinson  v.  Thompson,  1  think  proper  to  negative.  For  a  majority 
Vern.  465,  it  was  held,  that  an  account  of  of  partners  to  say,  '  We  do  not  care  what 
the   profits  of   a  voyage  settled   by   the  one  partner  may  say  :  we,  being  the  ma- 


U8.j 


RIGHTS    AND    DUTIES    OF   PARTNERS. 


189 


§  148.  As  to  Third  Persons.  —  We  may  consider  this  question 
in  reference  to  third  persons,  and  also  in  reference  to  the  partners 
themselves.  If  the  majority  propose  to  deal  with  a  customer, 
either  in  the  way  of  purchase  or  sale,  in  a  manner  to  which  the 
minority  do  not  assent,  it  is  certain  that  the  minority,  whether 
they  withhold  authority  or  not,  will  be  bound,  if  they  do  not  com- 
municate tlieir  dissent  to  the  customer,  provided  the  transaction 
be  within  the  scope  of  the  partnership  business  ;  for  so  would  the 
majority  be  bound  if  the  minority  so  did  it,  and  so  would  all  the 
|)artners  be  bound  if  any  one  of  them  so  did  it.  On  the  other 
hand,  if  it  be  not  within  the  business  of  the  firm,  neither  a 
majority  nor  a  minority  would  be  bound  to  third  persons,  unless 
these  persons  could  show  themselves  to  have  believed  and  to  have 
been  authorized  to  believe  that  it  was  within  the  business  of  the 
firm,  or  that  the  firm  had  made  it  theirs  by  adoption  or 
ratification. 

All  that  we  have  said  results  necessarily  from  principles  which 
have  been  fully  considered  in  former  chapters.     Let  us  here  sup- 


jority,  will  do  what  we  please,'  is,  I  ap- 
prehend, what  this  couvt  will  not  allow. 
In  all  partnerships,  whether  it  is  expressed 
in  the  deed  or  not,  the  partners  are  bound 
to  be  true  and  faithful  to  each  other  :  they 
are  to  act  upon  the  joint  opinion  of 
all,  and  the  discretion  and  judgment  of 
any  one  cannot  be  excluded  ;  what  weight 
is  to  be  given  to  it  is  another  question." 

The  American  authorities  are  not  much 
more  numerous  nor  satisfactory.  The  opin- 
ion of  the  court  in  Kirk  f. Hodgson,  3  Johns. 
Ch.  400,  contains  expressions  which,  con- 
sidered by  tliemselves,  would  appear  to 
give  unqualified  support  to  the  above  dida 
of  Lord  Eldon.  But  Chancellor  Kent, 
who  rendered  the  decision  in  that  case, 
says  of  it,  in  his  Commentaries,  that  it 
"related  onlj'  to  the  case  of  the  manage- 
ment of  the  interior  concerns  of  the 
partners  among  themselves  ;  and  to  that 
it  is  to  be  confined."  3  Kent  Comm.  [45]. 
"We  have,  however,  two  cases  in  which 
the  doctrine  is  asserted,  that  where  a  firm, 
without  articles,  consists  of  more  than 
two  members,  any  contract  within  the 
sphere  of  the  joint  business,  made  in  good 
faith  by  the  majority,  will  be  binding  on 
the  whole,  notwithstanding  at  the  time 
of,  or  previous  to,  the  making  of  the 
agreement,  the  minority  expressly  dissent. 


and  communicate  their  dissent  to  the 
third  party  with  whom  it  is  made.  See 
Johnston  v.  Button,  27  Ala.  245  ;  Camp- 
bidl  V.  Bowen,  49  Ga.  417.  See  also 
Western  Stage  Co.  v.  Walker,  2  Iowa,  504  ; 
Irvine  v.  Forbe.s,  11  Barb.  587.  In  Kirk 
V.  Hodgsdon,  3  Johns.  Ch.  400,  E.,  K., 
&  D.,  in  trade,  employed  H.  as  their 
clerk,  at  a  fixed  annual  salary,  but  with 
the  understanding  that  the  salary  should 
be  increased  with  the  increase  of  the  firm, 
business  and  of  H.'s  duties.  In  the  third 
year,  it  was  discovered  that  H.  had  over- 
drawn money  of  the  firm  and  applied  it 
to  his  own  use ;  and  this  breach  of  trust 
was  confessed  by  him.  Nevertheless,  a 
majority  of  the  firm,  E.  &  D.,  continued 
H.  afterwards  in  his  employment.  It  was 
held,  that  this  fact  was  decisive  in  favor 
of  the  continuance  of  the  rights  of  H. 
and  of  his  claim  to  the  stijiulated  increase 
of  salary  ;  that  it  was  evidence  that  he 
had  not  forfeited  the  confidence  of  the 
firm,  and  that  the  overdiawings,  charged 
and  confessed,  were  not  understood  by 
them  to  be  acts  of  intentional  fraud  ;  and 
that  they  could  not,  therefore,  be  set  up 
by  the  firm  against  his  claim,  founded  on 
their  promises  and  acknowledgments,  and 
his  services. 


190  THE   LAW   OF   PARTNERSHIP.  [CH.  VII. 

pose  that  the  question  refers  to  some  single  act.  The  majority  of 
a  house  dealing  in  cotton  wish  to  sell  one  hundred  bales  at  a 
certain  price,  and  the  minority  refuse  to  consent ;  the  majority 
make  the  sale,  deliver  the  cotton,  and  take  notes  or  money  for  it ; 
can  the  buyer  hold  this  cotton  by  good  title  ?  Certainly,  if  the 
minority  express  no  dissent ;  but,  if  they  do  express  dissent  and 
positive  prohibition,  is  the  transaction  then  valid  ?  It  might  not 
be  easy  to  reach  the  question  at  law.  The  minority  alone,  that 
is,  without  the  majority,  would  find  it  difficult  to  maintain  reple- 
vin or  trover,  or  any  other  action,  for  the  cotton  or  its  value. 
And  it  would  not  seem,  commonly  at  least,  to  be  a  case  in  which 
a  court  would  permit  a  minority  to  use  the  names  of  the  majority 
as  coplaintiffs  against  their  will.  If  the  minority  sold  the  same 
cotton  to  another  customer,  and  let  the  two  purchasers  contest 
the  title  of  each  other,  the  purchaser  from  the  minority  alone 
would  certainly  have  no  better  title  than  the  purchaser  from  the 
majority  alone.  If  the  question  were  considered  in  equity,  all 
the  circumstances  of  the  case  would  be  duly  regarded,  and,  among 
others,  the  right  or  absence  of  right  of  the  minority  to  dissolve 
the  partnership  at  will,  (c)  For,  if  they  have  this  right,  it  would 
seem  that  they  could  exercise  it,  in  case  of  irreconcilable  and 
material  difference  of  view  or  purpose.  And,  if  they  did  not 
exercise  it,  they  might  be  considered  as  yielding  to  the  majority, 
for  the  sake  of  preserving  the  partnership,  and  so  adopting  the 
transaction.  If  they  could  not  dissolve  it,  because  it  was  estab- 
lislied  for  a  time  certain,  and  if  the  conduct  of  the  majority  was 
unreasonable  and  oppressive,  this  would  be  a  good  ground  for  the 
other  partners  asking  of  the  court  a  dissolution  of  the  partner- 
ship; and  generally,  if  they  did  not,  it  would,  we  think,  be  taken 


(c)   In  both  the  cases,  Johnston  v.  Dut-  term,    as    having    any    bearing    on    the 

ton,  27   Ala.  245,  and  Western  Stage  Co.  case      under     consideration.      Conceding 

r.  Walker,  2  Iowa,  50i,  cited  in  preceding  they    are    law,    which    is    doubtful,    the 

note,  the  partnership  was,  by  articles,  to  decisions   rest   solely   upon    the    ground, 

continue  for  a  time  certain,  and  in   both  that  the  limitation  of  the  right  of  disso- 

the  actions  were  at  law.     In  Johnston  v.  lution  is  incompatible  with  the  nature  of 

Button,  the  attention  of  the  court  seems  the  partnership  contract ;    and  this  prin- 

to  have  been  called   to  views   similar  to  ci])le  does  not  militate  against  the  posi- 

those  represented  in  the   text.      See  argu-  tions  we  have  asserted.     The  dissent,   in 

nient  of  counsel,  pp.  2.50,  251.   The  court,  the  present  case,  cannot  be  regarded  as  a 

however,    said,    p.    253  :      "We    do   not  dissolution  ;    for,    if    effectual,    it    would 

consider    the    cases     to    which   we    have  not,   necessarily,    produce  that  result,  al- 

been   referred,    holding  that  one    partner  though  it  might   operate   to   change   the 

has  the  riijht,  at  pleasure,    to   dissolve  a  mode   of    conducting    the    business.      In 

partnei\ship,  although  the  articles  provide  other  words,  it  might  be  carried  on  with- 

that   it    is   to    continue    for  a    specified  out  contracting  debts." 


§  149.]  RIGHTS    AND    DUTIES   OF    PARTNERS.  191 

as  before,  that  by  not  dissolving  the  partnership  they  acceded  to 
the  wishes  of  the  majoi-ity.  But  there  certainly  might  be  cases 
in  which  the  act  of  the  majority  would  be  injurious  to  the  minor- 
ity, and  an  immediate  dissolution  even  more  so,  and  the  majority 
would  be  deemed  to  have  no  right  to  inflict  upon  a  minority  either 
of  these  mischiefs.  Then  the  court  would  decree  such  annulling 
of  the  act,  or  compensation,  or  other  remedy,  as  justice  between 
all  the  parties  and  the  power  of  the  court  should  authorize  and 
require.  But  tiiese  considerations  touch  rather  the  rights  and 
interests  of  the  partners.  So  far  as  the  customer,  the  third  party, 
is  concerned,  —  always  supposing  the  transaction  honest  as  to  him, 
—  we  should  say  that  the  question  of  the  power  of  a  majority 
would  be  put  aside  both  in  law  and  in  equity  by  the  general  rule, 
that,  if  the  transaction  were  within  the  business  of  the  firm,  it 
bound  all  the  partners  who  gave  no  notice  to  the  third  party  ;  and, 
on  the  other  hand,  that  it  did  not  bind  recusant  and  jjrotesting 
partners  who  gave  sufficient  notice  of  their  dissent ;  (c?)  and  that, 
if  it  was  without  the  business  of  the  partnership,  it  bound  nobody 
but  those  who  authorized  the  act  or  ratified  it. 

§  149.  Between  the  Partners  themselves.  —  If  the  question  of  a 
majority  related  only  to  those  things  to  which  no  person  out  of 
the  partnership  was  privy,  it  would  assume  a  somewhat  different 
aspect.  Suppose,  for  example,  a  majority  chose  to  enlarge  or 
vary  the  business  importantly,  or  enter  upon  a  new  business, 
which  things  no  partner  can  do  by  his  implied  authority,  can  the 
majority  compel  the  minority  to  acquiesce  in  this  ?  We  should 
say  that  they  certainly  could  not.  (e)  And  yet  it  must  generally 
be  the  case,  that  if  the  majority  persisted,  and  the  minority  did 
not  dissolve  the  partnership  or  seek  relief  from  a  court  of  equity, 
but  did  go  on  with  the  business  in  the  manner  proposed  by  the 
majority,  this  would  be  deemed  evidence  of  their  consent.     Still, 

(d)  See  ante,  §  147,  note  (b).  were  afterwards  altered  by  the  company 

(t)  Natnseh   v.   Irving,  Gow  on  Part,  so   as   to  allow  a  trade  in  ardent  spirits 

App.  p.  398  ;  ante,   §   131,  note  (x).     See  to    be     carried    on.      The     court     said  : 

Conist  y.  Harris,  Turn.  &  R.  524;  Living-  "  We  can  have  no  hesitation  in  holding, 

ston    I'.    Lynch,    4   Johns.    Ch.    573.     In  that  this  was  such  a  substantial  alteration 

Abbott   V.  Johnson,  32    N.    H.   9,   it  ap-  as    discliarged    the    plaintiffs  from    their 

peared  tiiat  a  number  of  ])ersons,  among  obligation    to   proceed  with    the   partner- 

them  the  plaintiffs,  formed  a  written  agree-  ship,  unless  they  agreed  to  the   change, 

ment    of    copartnership,   for  the    purpose  and  that  it  gave  them  the  right  to  retire 

of  carrying  on  a  retail  trade  in  domestic  from   the  firm,  ...  if  they  did  it  under 

and  foreign  goods.     By  one  of  the  articles  circumstances  which  were  such  as  to  do 

it   was    provided    that    there    should    be  no  injury  to  the  partners  who  chose  to  go 

"neither    purchase    nor    .sale   of    anient  on  under  the  new  arrangement." 
spirits    by    the    concern."      The   articles 


192  THE    LAW    OF    PARTNERSHIP.  [CH.    VIL 

tlie  universal  principle  would  apply,  that  waiver  or  consent  is 
implied  by  acquiescence  only  when  that  acquiescence  is  free  and 
voluntary  ;  and  therefore  this  evidence,  or  presumption,  might  be 
rebutted  by  showing  that  circumstances  had  placed  the  minority 
so  far  in  the  power  of  the  majority  that  they  must  go  on  and  sub- 
mit for  a  time,  reserving  all  their  rights  of  dissent,  or  suffer 
important  injury,  and  then  their  so  going  on  would  not  be  held  as 
necessarily  implying  a  waiver  or  loss  of  any  right.  These  views 
are,  to  some  extent,  only  theoretic  ;  and  it  is  perhaps  a  little 
remarkable  that  cases  of  conflict  of  interest  or  wishes  between 
partners  have  not  been  before  the  courts  of  England  or  this 
country  often  enough  to  settle  the  question  by  adjudication  as  to 
the  power  of  a  majority.  ^ 


SECTION  V. 

OF  THE  DUTY  OF  PARTNERS  TOWARD  EACH  OTHER. 

§  150.    Good  Faith  between   Partners.  —  The   first  and  highest 
duty  which  partners  owe  to  each  other,  is  that  of  perfect  good 


^  Power  of  majority.  — The  tendency  of  the  modern  cases  seems  to  be  in  the  direc- 
tion of  giving  to  a  majority  of  the  partners  entire  power  to  act  in  all  matters  within 
the  scope  of  the  firm  business.  See  Clarke  v.  Slate  Valley  R.  R.,  136  Pa.  408,  20  Atl. 
562,  where  it  was  held  that  two  partners  out  of  three  have  power  to  sign  a  warrant  of 
attornej',  in  order  to  authorize  a  suit  in  the  firm  name.  So  it  has  been  held  that  in 
the  absence  of  fraud  a  majority  of  the  partners  in  a  firm  formed  to  sell  ice  may  give  a 
good  title  to  ice  of  the  firm,  though  the  dissent  of  the  minority  is  made  known  to  the 
purchaser.     Staples  v.  Sprague,  75  Me.  458. 

On  the  other  hand,  no  mere  majority  of  the  partners  has  a  right  to  change  the 
location  of  the  business  without  consent  of  all.  Jennings's  Appeal,  (Pa.)  16  Atl.  19,  2 
Monaghan,  184.  And  where  the  lease  of  business  premises  ex[)ired  duiing  the  contin- 
uance of  the  partnership,  and  the  partners  could  not  agree  to  continue  business  there, 
it  was  held  that  part  of  the  partners  could  not  fix  the  location  of  the  business,  but  all 
must  agree.  Clements  v.  Norris,  8  Ch.  D.  129  (C.  A.)  This  was,  to  be  sure,  a  case 
of  disagreement  between  two  partners  ;  and  the  decision  might  perhaps  have  been 
different  if  a  majority  had  desired  to  continue  the  business  in  the  old  location. 

Where  a  partner  leaves  the  place  where  the  business  is  carried  on,  tlie  remaining 
partners  must  of  course  exercise  entire  control  over  the  business,  though  no  doubt 
they  have  no  power  to  vary  the  nature  of  it.  So  where  one  partner  who  alone  had 
control  of  the  finances  of  the  firm  went  away,  having  named  another  partner  to  take 
his  place,  it  was  held  that  the  remaining  paitners,  and  not  the  single  one  named,  had 
control  over  the  finances,  and  miglit  arram/e  a  settlement  of  the  affairs  of  the  firm. 
Sweet  V.  Morrison,  103  N.  Y.  235,  8  X.  F..  396. 


§  150.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  193 

faith,  (ee)  ^  In  the  Roman  civil  law,  tlic  "  societas  "  of  mer- 
chants for  trade,  and  of  husband  and  wife,  were  considered 
closely  analogous,  and  in  many  respects  governed  by  the  same 
principles.  (/)  Indeed,  what  we  have  already  said  indicates 
suHiciently  how  much  partners  are  in  the  power  or  at  the  mercy 
of  each  other,  and  there  certainly  seems  to  be  no  relation  in  life, 
calling,  either  by  its  own  exigencies  or  by  the  rules  of  law,  for  a 
more  absolute  good  faith  than  the  relation  of  partnership.  (^) 

After  this  comes  the  duty  of  having  and  using  the  skill  and 
knowledge  which  the  partnership  requires  ;  of  applying  to  all 
its  affairs  due  care  ;  of  devoting  to  them  a  reasonable  measure 
of  time  and  labor  ;  and  of  conducting  all  its  concerns,  private 
or  public,  with  due  economy.  For  the  breach  of  any  one  of 
these  duties,  the  party  is  held  responsible.  (A)  A  court  of 
equity,  in  particular,  will  always  decree  such  com|)eiisation,  in 
form  or  kind  and  amount,  as  shall  be  needed  to  make  good  any 
losses  arising  from  any  violation  or  disregard  of  these  duties.  (?) 

The  rule  would  extend,  by  the  reason  of  it,  to  the  manner  of 
doing  anything.  Hence,  as  no  partner  should  do  that  which 
he  has  no  lawful  power  to  do,  so  he  should  do  everything  he 
has  power  to  do  either  by  the  general  law  of  partnership  or  by 
special  stipulation  in  the  articles,  —  as,  for  example,  the  assign- 
ing of  his  .share,  ^  or  the  giving  of  partnership  security,  —  in 
such  a  way  as  a  due  regard  for  the  interests,  of  the  partnership 
would  require.  (  j) 

(ee)   See  Nicholson  v.  Janeway,  1  Green  of  Iledfield,  C.  J.,  in  Pierce  v.  Daniels,  24 

(N.  J.),  285.  [Ellis  V.  Allen,  80  Ala.  515,  Vt.  624. 
2  So.  676.]  (i)  See  post,  ch.  8,  §  204  et  scq.,  respect- 

(/)  Vin.    Comm.    lib.   3,    tit.  26,  §  2 ;  ing  the  remedies  between  partners  which 

Pothier,  Contr.  de  Soc.  ch.  3.  courts  of  equity  administer.     See  Lefever 

(g)  Baker  v.    Charlton,    1   Peake,    80.  v.  Underwood,  41   Pa.  505.      If  a  partner 

See   England  v.  Carling,  8  Beav.  129,  for  neglects  to   render   the  personal   services 

an  example  of  bad  faith  between  partners,  which    he   ought   to    render,    he  will   be 

and   of   the  displeasure  with  which  it  is  charged  with  their  value  in  settlement  of 

viewed  by  the  court.     See  also  Blissett  v.  the  partnership  account.    Jlarsh's  Appeal, 

Daniel,  11    Hare,  493,  Ault  i'.   Goodrich,  69  Pa.  30. 
4  Russ.  434.  (/)  The  rule  that  each  partner  must  do 

(h)  See  post,  §    154,  as   to  how   far  a  all  he  can  for  the  benefit  of  his  firm  has, 

partner    may   engage   in    other   business,  of  course,  its  limitation  in  the  reason  of 

besides  that  of  the  firm.     See  the  remarks  the  thing  and  the  circumstances  of  each 

1  The  duty  of  good  faith  toward  his  partners  is  especially  incumbent  upon  a  man- 
aging partner.  Brooks  v.  Martin,  2  Wall.  70  ;  Kimberly  v.  Arms,  129  U.  S.  512  ; 
Fulmer's  Appeal,  90  Pa.  143. 

2  The  sale  of  one  partner's  interest  to  another  is  not  a  breach  of  duty.  Cassels  v. 
Stewart,  6  App.  Cas.  64. 

13 


194 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII. 


In  every  bargain  which  he  makes,  he  must  remember  a  prin- 
ciple laid  down  emphatically  by  Lord  Eldon,  —  that  it  is  his  duty 
to  use  the  property  for  their  benefit  whose  property  it  is ;  (^) 
that  is,  for  the  benefit  of  the  whole  as  one  concern,  or  one  body, 
for  so  it  is  owned.  ISo  if  a  partner  by  any  means  gets  possession 
of  a  fund  properly  belonging  to  the  firm,  he  must  share  any  profit 
or  advantage  arising  from  it,  with  his  copartners. (M) 

§151.  Partner  charged  with  Loss  caused  by  His  Fault.  —  If 
losses  occur  by  reason  of  a  breach  of  duty  by  a  partner,  in  any 
way  whatever,  whether  through  fraud,  negligence,  ignorance,  or 
extravagance,  and, whether  by  design  or  not,  they  must  rest  on 
the  partner  whose  faulty  conduct  has  caused  them ;  and  he  can- 
not require  the  partnership  to  contribute  in  any  way  towards 
them.  {I)     But  a  partner  is  not  liable  to  his  copartners  for  a  loss 


particular  case.  See  Rowe  v.  Wood,  2  Jac. 
&  W.  556. 

(k)  Crawshay  v.  Collins,  15  Ves.  226  ; 
Honore  v.  Colmesnil,  1  J.  J.   Marsh.  507, 
541.    Hence,  when  all  the  proprietors  of  a 
morning    payier,  save    one,  were  also  the 
owners  of  an  evening  paper,  published  in 
the  same  place,  an  injunction  was  granted 
to  restrain  the  proprietors  of  the  evening 
paper  from  publishing  therein  any  informa- 
tion obtained  at  the  expense  of  the  morn- 
ing paper,  until  it  should  first  have  been 
published  in  the  morning  paper.       Glass- 
ington  V.  Thwaites,  1  Sim.  &  S.  124,  133. 
And  if   a  copartnership  own  a  dwelling- 
house  which  is  occupied  exclusively  by  the 
family  of  one  of  the  partners,  this  partner 
i.°   liable    for    rent    to   the  firm,    though 
there   be   no   special    agreement    to  that 
effect.     Holden  v.  Peace,  4  Ired.  Eq.  223, 
[So  where    a  partnership  owned  a  mine, 
together  with  houses  and  machinery,  and 
the  managing  partner  owned  an  adjoining 
mine  and  used  the  plant  in  working  his 
own   mine,    it   was   held    that    he   must 
account  to  the  firm  foi  the  rental  value  of 
the  property  he  used.      Pierce  v.  Pierce, 
89    Mich.    233,    50  N.    W.    851.]      The 
case    of    Beecher  v.  Guilbane,   Mosley,  3, 
is    thus    reported :      "If    one   copartner 
borrows  money  of  the  other  on  his  note, 
he  shall  pay  interest  for  it,  though  he  had 
more  money  in  the    stock  than  what  he 
borrowed  ;    for   the   stock   is   only   to  be 
employed  in  augmentation  of  the  trade, 
for  their  mutual  benefit  ;    but  neither  of 


them  can  make  use  of  it  for  their  own 
private  advantage."  See  Kelley  r.  Green- 
leaf,  3  Story,  93  ;  Roberts  v.  Totten,  13 
Ark.  609  ;    Pierce  v.  Daniels,  25  Vt.  624.  ^ 

If  one  jiartner  employ  partnership  funds 
in  a  private  trade  or  adventure,  he  must 
account  not  only  for  the  interest  on  the 
funds  thus  withdrawn  from  the  partner- 
shi[),    but   also   for  the   profits   of     such 
separate  trade.     Brown   v.    Litton,    1    P. 
Wms.  140  ;    Crawshay  v.  Collins,  15  Ves. 
218  ;  Stoughtou  v.  Lynch,   1  Johns.   Ch. 
467  ;     Solomon   v.    Solomon,   2    Ga.    18. 
And  if  such  acts  of  one  partner  threaten 
the  destruction  of  the  joint  property,  or 
render   it   probable  that  the    solvency  of 
the  firm  and  the  rights  of    the  creditors 
depend  upon  the  interference  of  chancery, 
equity  may  interpose  by  injunction,  even 
though  a  dissolution  of    the  firm  be  not 
prayed  for.  Miles  v.  Thomas,  9  Sim.  607  ; 
Gratz  V.  Bayard,  11  S.  &  R.  41,  48.      The 
same  ]irinciples  as  to  the  use  of  the  joint 
property  apply  to  partners  who  wind  up 
the  affairs  of  the  partnership  after  dissolu- 
tion.     See  post,  ch.  12,  13,  upon  the  dis- 
solution of  a  partnership  and  its  effects. 
(kk)  Easonv.  Cherry,  6  Jones,  Eq.  261. 
(/)  Devall    V.   Burbridge,  6    W.  &  S. 
529  ;  Jessup  v.  Cook,  1  Halst.  434.      See 
M'llreath  v.  Margetson,  4  Doug.  278  ;  In 
re  Webb,   2  J.   B.   Moore,    500  :    Lyles  v. 
Styles,  2  Wash.  C.  C.  224.      See  Beste  v. 
His  Creditors,  15  La.  Ann.  55.   [So  where 
a  partner  improperly  pays  an  unjust  bill, 
he  and  not  the  firm  must  be  charged  with 


§  151.]  RIGHTS    AND    DUTIES    OF   PARTNERS,  195 

caused  by  an  honest  mistake  of  judgment,  unless  it  amounts  to 
gross  negligence  or  ignorance.  (^11) 

The  question  may  occur  whether  a  negligence  and  consequent 
loss,  in  one  respect,  would  be  made  up,  or  excused,  by  great  suc- 
cesses and  pi'olit  in  anotiier.  It  would  perhaps  be  impossible 
to  frame  a  definite  rule  which  w^ould  govern  all  cases  of  this 
kind.  The  general  principle  w^ould  be  something  like  this:  If 
it  were  one  transaction,  quite  indivisible,  and  tlie  partner  con- 
ducted it  in  some  respects  with  a  want  of  attention,  which  caused 
some  loss,  and  in  others  with  unusual  care  and  skill  and  energy, 
which  increased  the  profits,  it  could  not  be  deemed  on  the  whole 
a  case  of  wrong  demanding  compensation.  If,  however,  he  had 
conducted  throughout  as  be  should  have  done,  excepting  in  one 
or  two  particulars,  and  his  default  in  these  caused  material 
injury,  he  should  not  be  beld  excused  for  thus  lessening  the 
profits  of  the  firm  l)y  the  fact  that  they  were  still,  on  the  whole 
transaction,  very  considerai)le.  For  the  partnership  is  entitled 
to  all  its  profits,  and  may  ask  compensation  of  any  one  whose 
wrongful  act  takes  them  or  a  part  of  them  away,  whether  he  be 
a  partner  or  not,  and  whether  much  or  little  be  left.  And  if 
there  be  many  transactions,  or  one  business  divisible  into  many 
transactions,  that  he  did  his  duty  for  the  most  part  would  cer- 
tainly be  neither  excuse  nor  compensation  for  not  doing  it  at  all 
times.  And  ^ve  should  doubt  whether  equity  would  find  it  easy 
to  regard  him  as  protected  against  all  claims  for  default  or  vio- 
lation of  duty,  because  in  certain  things  he  did  more  than  his 
duty.  (??!) 

From  the  requirement  of  perfectly  good  faith,  it  follows  that 
no  partner  must  deceive  his  copartners,  for  his  benefit  and  their 
injury,  either  by  false  representations  or  by  concealments.  Thus, 
if  he  persuades  them  into  any  course  of  business,  or  to  any  single 
transaction,  by  these  means,  and  losses  occur,  he  must  sustain 
them  or  compensate  for  them.  So,  if  he  proposes  to  buy  of  them 
the  wdiole  or  any  part  of  their  share  of  their  business,  and  by  any 
false  statement  or  intimation  on  his  part,  or  any  concealment 
or  prevarication,  influences  them  to  enter  into  an  arrangement 
to  effect  his  wishes,  it  will  not  be  obligatory  on  them,  (w) 

the  amount.    Yetzer  v.  Applegate,  (la.)  50  (m)  See  Pothier,  Contr.  de  Soc.  n.  12.5. 

N.  W.  66  ;  Moore's  Appeal,  (Pa.)  19  Atl.  (?i)  Maddeforcl  v.  Austwick,  1  Sim.  89, 

753.]  is  a  leading  case.     Tlie  same  principles  are 

(II)  Morris  v.  Allen,   1   McCarter,  44  ;  asserted   and  maintained    in  the  cases  of 

and   see  Stephens  v.   Orman,    10   Fla.    9.  Sexton  v.  Sexton,  9  Oratt.  204,  and  Hop- 

[Charlton  v.  Sloan,  76   la.  288,  41  N.  W.  kins   v.   Watt,    13    111.    298  ;    Knij,dit   v. 

303.]  Marjoribanks,  11    Reav.    322,  2   ^laen.   & 

G.  io.     [Brooks  v.  Martin,  2  Wall.  70. 


196  THE    LAW    OP    PARTNERSHIP.  [CH.   VII. 

§  152.  Partner  Making  Secret  Advantage.  —  If  lie  makes  any 
private  bargain  with  third  parties  for  his  own  benefit,  which 
either  infiicts  a  loss  upon  the  partnership,  or  turns  to  himself 
advantages  which  belong  to  all  in  common,  he  will  be  held  to 
make  compensation  for  this,  or  to  restore  these  advantages  to 
the  partnership  in  some  way.  (o)  ^  Thus,  if  the  partnership  have 
a  valuable  leasehold  property,  and,  when  it  is  about  to  expire,  a 
partner  privately  gets  a  renewal  of  it  to  himself,  he  cannot  take 
advantage  of  this  to  impose  hard  terms  on  his  partncj's,  but  will 
be  held  to  have  obtained  it  for  them  as  well  as  for  himself,  (p ) 

So,  if  he  obtains  goods  for  the  partnership  by  barter  of  his  own 
goods,  he  cannot  charge  an  extra  price  for  his  goods.  If  he  is 
properly  carrying  on  a  separate  business,  he  may  charge  a  fair 
living  price ;  so  perhaps  he  may  if  he  has  them  on  hand  in  any 
way.  But  if  he  purchased  them  for  this  bargain  with  the  part- 
nership funds  or  credit,  or  if  he  for  the  partnership  might  have 
bought  in  the  same  way,  he  will  be  allowed  to  put  upon  them 
only  the  price  he  paid,  (q')     So  if  he  acts  in  buying  for  his  firm 


(o)  Fawcett  v.  Whitehouse,  1  Russ.  &  ship  ;  and  this   renewal  mnst  be  held  to 

M.   132,  135,  141,  148  ;  Hichens  v.  Con-  have    been    so   obtained."     The   renewal, 

greve,   1  Russ.  &  M.  132,   150,  note  (6),  during  a  copartnership,  of  a  lease  held  by 

4  Russ.   562  ;  also  Carter  v.  Home,  1  Eq.  a  firm,  and  rendered  more  valuable  bj-  the 

Ca.  Abr.  "Account,"  A.,  pi.  13  ;  Russell  business  of  the  firm,  though  made  by  one 

V.  Austwick,    1    Sim.   52  ;     [Kimberly  v.  partner  to  himself,  and  though  it  would 

Arms,  129  U.  S.  512.]  not  have  been  made  to  the  firm,  inures  to 

(p)  Featherstonaugh    v.    Fenwick,    17  the  benefit  of  the  firm.     Mitchell  v.  Reed, 

Yes.   298,   310  ;    Dougherty  v.  Van  Nos-  61  N.  Y.  123  ;  Struthers  v.  Pearce,  51  N. 

trand,  1  Hoff.  Ch.  68,  69  ;  Leach  v.  Leach,  Y.  357. 

18    Pick.  68,  76  ;    Anderson  v.    Lemon,  8  (q)  Burton   v.  Wookej',  6  Madd.    367. 

N.   Y.  236,  4   Sandf.    552.      In  Feather-  The  plaintiff  and  defendant  entered  into 

stonaughr.  Fenwick,  .szi^jra,  the  Master  of  partnership  together  to  deal  in  lapis  ca  I- 

the  Rolls   said  :      "  It  is  clear  that   one  aminaris.     The    defendant,    who   was    a 

partner  cannot  treat  privatel}%  and  behind  shopkeeper,  was  to  take  the  active  part  in 

the  backs  of  his  copartners,  for  a  lease  of  the  concern,  and  to  purchase  the  article 

the    premises,    where    the  joint   trade   is  from  the  miners  in  whose  neighborhood  he 

carried  on,  for  his  own  individual  benefit,  lived.      After  some    tune,  the   defendant 

If  he  does  so  treat,  and  obtains  a  lease  in  adopted  a  course  of  dealing,  by  which,  in 

his  own  name,  it  is  a  trust  for  the  partner-  place  of  paying  the  miners  for  the  article 

1  So  where  a  partner  on  whose  recommendation  the  firm  bought  land  received  mye 
land  from  the  seller  by  way  of  commission,  he  took  it  in  trust  for  the  firm.  Hodge  v. 
Twitchell,  33  Minn.  389,  23  N.  W.  547.  So  where  in  the  course  of  selling  firm 
property  or  of  other  partnership  transactions  one  partner  gets  a  secret  commission 
from  the  purchaser,  he  will  be  required  to  hold  it  for  the  firm.  Newell  v.  Cochran,  41 
Minn.  374,  43  N.  W.  84  ;  Watts  v.  Patton,  66  Miss.  54,  5  So.  628  ;  Whitman  v. 
Bowden,  27  S.  C.  53,  2  S.  E.  630.  The  arrangement  being  fraudulent^  one  partner  will 
not  be  allowed  to  maintain  an  action  on  a  contract  to  pay  such  a  secret  commission. 
Gleason  v.  Chicago,.  M.  &  S.  P.  R.  R.  (la.)  43  N.  W.  517- 


§  153.] 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


197 


a  particular  kind  of  goods  which  he  also  buys  and  sells  on  his 
own  account,  the  firm  are  entitled  to  any  profit  he  may  make  on 
his  own  goods  sold  to  the  firm,  (r)  And  if,  on  the  other  hand, 
a  partner  gives  the  goods  of  the  partnership  in  barter  for  some- 
thing he  buys,  or  otherwise  uses  them  for  his  own  benefit,  he 
must  allow  the  partnership  the  full  market-price  for  them,  or 
what  any  customer  would  have  i)aid,  unless  the  usage  of  the  firm 
or  their  stipulations  permit  him  to  make  his  personal  profit  out 
of  them. 

§  153.  Hovr  far  Partner  may  transact  Independent  Business.  —  It 
is  quite  well  settled  that  a  partner  has  no  right  to  carry  away  his 
knowledge,  his  skill,  his  capital  or  credit,  his  care  or  labor,  iiito 
another  business,  whether  only  his  own  or  that  of  another  firm, 
to  the  injury  of  his  first  copartners.  That  is,  he  may  not  do  this 
such  a  way  as  to  deprive  them  of  business,  of  profits  or  advan- 
tages, which  they  had  a  right  to  expect  from  their  connection 
with  him.  (6-)     As  there  is  in  practice  no  such  thing  as  a  uni- 


with  money,  he  paid  them  with  shop- 
goods  ;  and  in  his  account  with  the 
plaintiir  he  charged  him  as  for  cash  paid, 
to  the  amount  of   the  price  of  the  goods. 

Tlie  ([uestion  was,  whether  he  couhl 
justify  this  charge,  or  whether  he  must  not 
divide  the  prolit  made  by  him  ou  the  sale 
of  the  goods  with  the  phxiutitf. 

Tiie  Vice-Chaucellor  said:  "I  must 
decree  an  account  of  the  profit  made  by 
the  defendant  in  his  barter  of  goods,  and 
must  dechare  that  the  pUiintitf  is  entitled 
to  an  e(iual  division  of  that  profit  with  the 
defendant." 

(r)  Bentley  v.  Craven,  18  Beav.  7.5.  In 
this  case  the  firm  carried  on  the  business 
of  sugar-refiners.  One  of  the  members 
was  a  wholesale  grocer,  who  had  great 
knowledge  of  the  proper  time  for  buying 
sugai's,  and  who,  therefore,  was  selected  as 
the  buying  agent  of  the  firm.  He  bought 
sugars  on  his  own  account,  in  anticipation 
that  the  firm  would  need  them  ;  and,  when 
the}'  were  required,  sold  them  to  the  firm 
at  the  then  market-ju-ice.  It  was  held  that 
the  firm  was  entitled  to  any  profit  he 
might  have  made.  But  when  a  partner- 
ship is  entered  into  for  the  purpose  of 
transacting  a  commission  business, —  one 
to  furnish  buildings  and  fixtures,  and  the 
other  to  keep  the  books  and  give  his 
personal  attention  to  the  management  of 


the  business, —  the  latter  may,  after  the 
houses  furnished  by  the  former  are  full, 
and  the  former  refuses  to  furnish  further 
warehouseroom,  put  up  other  warehouses, 
and  extend  the  business,  to  his  own  exclu- 
sive profit,  provided  he  does  not  neglect 
the  business  of  the  firm.  Parnell  v.  Rob- 
inson, 53  Ga.  26. 

{s'l  See  Boulay  Paty,  Cours  de  Droit, 
Com.  torn.  ii.  94.  Sir,  John  Leach  said, 
in  Glassington  v.  Thwaites,  1  Sim.  &  S.  131, 
133,  "  The  piinciples  of  courts  of  equit}' 
would  not  permit  that  ]iarties  bound  to 
each  other  by  express  or  implied  contract, 
to  promote  an  undertaking  for  the  com- 
mon benefit,  should  any  of  them  engage 
in  another  concern,  which  necessarily  gave 
them  a  direct  interest  adverse  to  that 
undertaking."  In  Long  v.  Majestre,  1 
Johns.  Ch.  305,  A.  &  B.  carried  on  trade 
as  partners,  the  capital  being  supplied  by 
A.  B.  without  the  consent  of  A.,  and 
without  rendering  any  account  or  dissolv- 
ing the  partnership,  formed  a  new  part- 
nership with  C,  and  carried  into  that 
house  all  the  funds  of  the  original  firm, 
and  used  them  therein  till  his  death.  The 
plaintiff  filed  his  bill  against  the  adminis- 
tratrix of  B.,  and  against  C,  his  surviving 
partner,  claiming  to  be  entitled  to  the 
whole  share  of  the  de(;eased  in  the  last 
partnership,  alleging  that  a  great  part  of 


198  THE    LAW    OP    PARTNERSHIP.  [CH.    VII. 

vei'sal  partnership,  so  no  partner  is  obliged,  by  the  mere  fact  of 
partnership,  to  do  nothing  else  than  the  business  of  the  par;:ner- 
ship.  It  IS  probably  not  true  in  fact  that  the  majority  of  part- 
ners confine  themselves  absolutely  and  exclusively  to  partnership 
business,  or  that  it  is  expected  or  necessary  that  they  should,  {t) 
And  it  may  be  very  difficult  for  a  court  to  distinguish  between 
the  case  of  an  honest  several  business,  taking  only  its  due  share 
of  time,  capital,  care,  Arc,  and  an  instance  of  unlawful  with- 
drawing from  a  partnership  of  what  belongs  to  the  firm.^  But 
the  line  must  be  drawn  somewhere  ;  and  courts  have  sometimes 
applied  the  rule  with  so  much  severity  as  to  avoid  transactions 
or  compel  compensation  where  the  partner  could  not  be  charged 
with  anything  more  than  exposing  himself  to  a  bias  in  his  own 
favor,  and  prejudicial  to  the  partnership,  (m) 

tlie  personal   estate   of    the  deceased  had  equity   that   a   person   who   stands   in    a 

Come  into  the  hands  of  C.  ;  and  praying  relation  of  trust  or  confidence  to  another, 

tliatC.  might  be  compelled  to  set  forth  a  shall  not  he  jiermitted,  in   pursuit  of  his 

full  and  true  account  of  the  joint  trans-  private  advantage,  to  place  himself    in  a 

tactions  between  him  and  the  deceased,  and  situation  which  gives  him  a  bias  against 

of  the  personal  estate  of  the  latter  in  his  the  due  discharge  of  that   trust  or  confi- 

hands.     C.  demurring  to  so  much  of  the  deuce."     But  the  mere  fact  that  ]iartners 

bill  as  called  for  the  discovery  and  account  are  so  situated  as  to  be  under  a  temptation 

above  stated,  the  demurrer  was  overruled,  to  improperly  use  the  partnership  property 

And   see    Law  v-    Cross,    1    Black,    533  ;  is  not  sufficient  to  induce  eijuity  to  inter- 

Soules  f.  Burton,  36  Vt.  652.  fere  by  injunction.      See   Glassington  v. 

{/)  See  remarks  of  Willard,  Vice-Chan-  Thwaites,  1  Sim.  &  S.  124. 
cellor,  in  Caldwell  v.  Lieber,  7  Paige,  483,  The   considerations    ajjplicable   to  the 

494,  495;  Ship  "Potomac,"  2  Black,  48L  case  of  surviving  partners,    who  are  ap- 

{u)  Burton  u.  Wookey,  6   Madd.  367;  pointed  executors   of  deceased  copartners, 

ante,  §  153,  note  ((j).  Sir  John  Leach  will  be  suggested  hereafter.  Pusl,  ch.  lb. 
there  said  :     "It  is  a  maxim  of  courts  of 

^  It  is  clear  that  if  one  partner  carries  on  clandestinely  the  same  business  as  that 
of  the  firm,  the  partnership  is  entitled  to  the  benefit  of  any  profit  he  may  make. 
Todd  V.  Raflferty,  30  N.  J  Eq.  254.  But  if  the  business  carried  on  by  the  partner  is 
of  a  difFcient  sort  from  that  of  the  firm,  and  not  connected  with  it,  the  firm  has  no 
claim  to  the  profit.  So  where  a  partner  in  a  warehouse  owned  a  whaiflioat,  for  the 
use  of  which  he  received  fees  from  steamboats,  it  was  held  that  his  partners  had  no 
claim  to  the  fees.  Northrup  v.  Phillips,  99  111.  449.  So  where  a  partner  in  a  firm  of 
salt  brokers  engaged  in  the  manufacture  of  salt,  the  firm  cannot  claim  the  profits  of 
the  manufacture,  since  there  is  no  competition.  Dean  v.  Macdowell,  8  Ch.  D.  345 
(C.  A.).  Even  tliough  the  partner  makes  use  in  the  new  business  of  information 
acquired  in  the  firm  business,  that  does  not  give  the  firm  a  right  to  participate  in  the 
profits  of  the  new  business,  where  the  information  is  not  used  for  the  purpose  of  com- 
peting with  the  firm  business,  and  the  new  business  is  not  in  the  same  line  as  the  old. 
Therefore  a  firm  of  shipbrokers  was  held  not  to  be  entitled  to  the  profits  of  one  part- 
ner who  had  joined  a  shipbuilding  firm.  Aas  v.  Benham,  [1891]  2  Ch.  244  (C.  A.). 
In  the  absence  of  agreement,  one  partner  has  no  interest  in  an  invention  of  his  co- 
partner, though  made  in  the  course  of  the  partnership  business  and  in  business  hours 
Burr  v.Be  La  Vergne,  102  N.  Y.  415,  7  IS".  E.  366.  * 


§  154.] 


RIGHTS    AND    DUTIES    OF   PARTiNERS, 


199 


§  154.  Sovr  Accounts  of  the  Firm  should  be  kept.  —  As  all 
partners  have  these  rights  as  against  each  other,  so  they  have  the 
right  which  these  rights  imply,  —  that  of  enforcing  and  protect- 
ing these  rights  ;  and  especially  of  knowing  whether  they  are 
invaded  or  not.  Therefore,  each  partner  has  a  perfect  right  to 
know  all  that  is  done,  and  examine  all  the  accounts  at  his  own 
pleasure,  (v)  So  every  partner  is  bound  to  enter  upon  the  proper 
books  and  in  the  proper  way,  or  enable  the  clerk  or  other  person 
employed  to  make  due  entry  of,  every  charge  and  every  credit, 
all  money  paid  or  money  received,  and  all  notes  payable  or 
receivable,  and  every  other  transaction  which  is  usually  put  upon 
the  books  of  account ;  and  all  this  he  must  do  without  unneces- 
sary delay,  (w)  So,  if  any  partner  contemplates  any  important 
transaction,  we  should  regard  it  as  his  duty  to  communicate  what 
he  does,  and  what  he  intends  to  do,  before  he  takes  any  prelim- 
inary steps  which  might  embarrass  the  firm  if  the  transaction 
should  not  be  carried  into  effect,  in  order  that  the  firm  may  do 
what  they  think  proper.  If,  by  articles  or  arrangements,  any  one 
partner  is  intrusted  with  the  accounts,  it  would  be  a  peculiar 
breach  of  duty  on  his  part  to  keep  them  in  such  way  as  to  mis- 
lead his  partners,  whether  by  misentry  or  by  nonentry.  (a;) 


iv)  Rowe  V.  Wood,  2  Jac.  &  W.  558  ; 
[Webb  V.  Fonlyce,  55  la.  11,  7  N.  W. 
385  ;  Katz  v.  Brewiugtou,  71  Md.  79,  20 
Atl.  139.  This  is  especially  true  where 
the  business  is  under  the  control  of  a 
managing  partner.  Fulmer's  Appeal,  90 
Pa.  143.]  It  is  the  duty  of  each  partner 
to  keep  precise  accounts,  and  to  have 
them  always  ready  for  inspection.  The 
good  faith  of  the  partners  is  pledged 
mutually  to  each  other,  that  the  business 
shall  be  conducted  under  their  actual, 
personal  inspection,  enabling  each  to  see 
that  the  other  is  carrying  it  on  for  their 
mutual  advantage,  and  not  destroying  it. 
Peacock  v.  Peacock,  16  Ves.  49,  51  ; 
Donaldson  v.  AVillianis,  1  Cr.  &  M.  345  ; 
Kowe  V.  Wood,  2  Jac.  &  W.  553,  556. 
See  Boynton  v.  Page,  13  Wend.  425. 

(w)  Ex  parte  Yonge,  3  Ves.  &  B.  36 ; 
Goodman  v.  Whitcomb,  1  Jac.  &  W.  589, 
593 ;  [Webb  v.  Fordyce,  55  la.  11,  7  X. 
W.  385.]  Every  reasonable  presumption 
will  be  made  against  ]iartners  whose  fault 
it  is  that  the  partnershi])  books  are  im- 
perfect ;  and  if  they  claim  to  be  entitled 
to  other  credits  than  those  to  which  the 


books,  at  the  close  of  the  partnership,  en- 
title them,  it  is  usual  to  require  of  them 
very  strict  proof.  Bevans  v.  Sullivan,  4 
Gill,  383,  391  ;  [Kirwan  v.  Henry,  (K3^) 
16  S.  W.  828  ;  Van  Xess  v.  Van  Ness,  32 
N.  J.  Eq.  669  ;  Dimond  v.  Henderson,  47 
Wis.  172,  2  N.  W.  73.  But  there  is  no 
presumption  against  a  partner  whose  fail- 
ure to  keep  proper  accounts  is  shown  to 
have  been  due  to  incapacity.  Kuapp  v. 
Edwards,  57  Wis.  191,  15  N.  W.  140.]  In 
Beacham  v.  Eckford,  2  Sandf.  Ch.  116,  it 
was  held,  that,  on  the  dissolution  of  a 
partnership  between  persons  residing  at 
different  places,  it  is  the  duty  of  each 
partner  to  furnish  to  the  other  all  their 
accounts,  and  to  endeavor  to  adjust  them 
to  ascertain  the  balance;  that  this  is  espe- 
cially the  duty  of  the  partner  at  the  jilace 
where  the  principal  business  has  been 
transacted  ;  and  that,  upon  the  death  of 
a  copartner,  this  duty  becomes  imperative 
upon  the  survivor ;  and,  if  he  neglect  it, 
he  will  lose  interest  on  the  balance  which 
may  subsequently  appear  to  have  been 
due  to  him. 

(x)  See  Maddeford  v.  Austwick,  1  Sim. 


200 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VII. 


§  155.  Partner's  Right  to  Extra  Compensation.  —  Another  point 
seems  to  be  well  settled,  both  at  law  and  in  equity.  It  is  that  no 
partner  shall  receive  any  special  compensation  for  what  he  does, 
unless  by  agreement  of  the  partnership.  (?/)  If  the  articles,  or  an 
arrangement  subsequent  to  them,  provide  that  one  or  another  shall 
receive  any  special  compensation  for  special  service,  this  arrange- 
ment will  be  respected,  (z)     But  if  there  be  no  such  provision. 


89 ;  Kelley  v.  Greenleaf,  3  Story,  93,  103. 
It  is,  of  course,  improper  to  bleud  the 
accounts  of  the  partners  with  the  firm 
with  the  individual  accounts  of  the  part- 
ners between  themselves.  Honore  v.  Col- 
mesnil,  1  J.  J.  Marsh.  .'506,  517. 

(//)  Thornton  v.  Proctor,  1  Anst.  94  ; 
Wliittleu.  M'Farlane,  1  Knapp,  312,  315; 
Holmes  v.  Higgins,  1  B.  &  C.  74  ;  Frank- 
lin V.  Robinson,  1  Johns.  Ch.  156,  165  ; 
Bradford  v.  Kimberly,  3  Johns.  Ch.  431 ; 
Caldwell  v.  Lieber,  7  Paige,  483  ;  Philips 
V.  Turner,  2  Dev.  &  B.  Eq.  123  ;  Ander- 
son V.  Taylor,  2  Ired.  Eq.  420  ;  Reybold 
V.  Dodd,  1  Harr.  401,  415  ;  Dougherty  v. 
Nostrand,  1  Hoflf.  Ch.  68  ;  Bevans  v.  Sul- 
livan, 4  Gill,  383  ;  Coursen  v.  Hamlin,  2 
Duer,  513  ;  Roach  v.  Perrj',  16  111.  37  ; 
King  V.  Hamilton,  16  111.  190  ;  Bennett 
V.  Russell,  34  Mo.  524  ;  Drew  v.  Ferson, 
22  Wis.  651.  But,  if  a  partner  be  ajv 
pointed  by  the  firm  agent  for  a  sjxciul 
I)ur]iose,  he  is  entitled  as  against  the  firm 
to  the  usual  compensation  in  relation  to 
the  subject  of  such  agency.  Bradford  v. 
Kimberly,  3  Johns.  Ch.  431 ;  Fhilijis  v. 
Turner,  2  Dev.  &  B.  Eq.  123.  If,  in 
winding  up  their  affairs,  the  surviving 
partner  renders  services,  not  strictly  in 
settlement,  but  in  the  prosecution  and 
execution,  of  contracts  already  existing, 
or  new  ones  entered  into  with  the  consent 
of  the  administrators  of  the  deceased 
partner,  for  the  general  benefit  of  the 
partneiship  fund,  he  is  entitled  to  com- 
pensation for  such  service  as  is  not  in 
strict  settlement.  Schenkl  v.  Dana,  118 
Mass.  236  ;  Willett  v.  Blandford,  1  Hare, 
253.  And  if  a  partner  sell  half  his  share 
to  another  person,  who  becomes  the  gen- 
eral manager  of  the  partnership  business, 
such  third  party,  not  being  a  partner  as 
respects  tlie  partner  retaining  his  original 
interest  in  the  firm,  is  responsible  to  the 
latter  only  as  agent,   and  as  against  him 


may  claim  a  reasonable  compensation  for 
his  services.  Nevvland  v.  Tate,  3  Ired. 
Eq.  226.  A  partner  is,  of  course,  entitled 
to  be  indemnified  for  outlays  made  by 
him,  and  obligations  incurred,  in  the  ser- 
vice of  tlie  partnership,  and  for  the  suc- 
cessful conduct  of  its  business,  though  he 
cannot  claim  any  thing  for  his  manage- 
ment, time,  and  labor.  Burden  v.  Bur- 
den, 1  Ves.  &  B.  170  ;  Brigham  v.  Dana, 
29  Vt.  1.  And,  it  seems,  tliere  may  be 
actual  expenditures  of  money  for  the  firm, 
by  one  partner,  which  partake  so  much  of 
the  nature  of  personal  service  that  the 
court  will  not  allow  the  firm  to  be  cliai'ged 
with  them,  especially  if  the  partner  him- 
self do  not  apjiear  to  have  regarded  them 
as  items  of  expense  incurred  on  jiartner- 
ship  account.  Thornton  v.  Proctor,  1 
Anst.  94  i  In  re  The  German  Mining 
Comyiany,  27  Eng.  L.  &  Eq.  158.  And 
if  shareholders,  or  partners  in  such  a 
company,  at  the  request  of  the  directors, 
the  managing  partners,  make  advances  of 
money  for  partnership  purposes,  which 
are  so  applied,  and  are  the  means  of  sav- 
ing the  concern  from  ruin,  and  of  pre- 
venting the  total  loss  of  the  joint  property, 
such  shareholders  are  creditors  of  the 
company  to  the  amount  of  their  advances 
and  interest  thereon.  In  re  The  German 
Mining  Company,  4  De  G.,  M.  &  G.  19. 
See  also  finst,  §  157,  note  {cc), 

(z)  Paine  v.  Thacher,  25  Wend.  450; 
Deslia  V.  Sheppard,  20  Ala.  747  ;  Pond  v. 
Clark,  24  Conn.  370.  See  Baltyde  v. 
Trump,  1  Md.  Ch.  517.  And  where  by 
the  articles  of  copartnership  one  partner 
is  exempted  from  the  duty  of  rendering 
his  personal  services  to  the  joint  business, 
if  he  afterwards  does  render  such  services, 
at  the  instance  and  request  of  his  cojiart- 
ners,  he  will  be  entitled  to  a  reasonable 
compensation  therefor.  The  general  rule, 
that  one  partner  cannot  charge  the  firm 


§  155.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  201 

tlie  law  will  not  make  any,  nor  infer  one  from  the  2:reater  indus- 
try or  greater  ability  of  any  one  partner,  (a)  The  principle 
seems  to  be,  that  partners  are  considered  as  meeting  on  a  com- 
mon ground,  each  engaging  to  do  all  he  can  do  for  the  common 
good,  {b)  And,  whatever  any  one  does,  he  has  no  claim  for  any 
thing  beyond  his  equal  share  of  the  common  benefit,  without  the 
consent  of  his  copartners,  (c)  ^ 

for  his  services,  is  founded  on  the  princi-  Lieber,  7   Paige,   483  ;    aytte,   §   153,   and 

pie  that  eacli  partner  is  bound  to  devote  Cunlitie  v.  Dyerville,  7  R.  I.  325. 
his  skill  and   labor  to  the  promotion  of  (6)  The  principle  was  very  fully  con- 

the  coinmon  benefit  of  the  concern,  and  is  sidered  by  Willard,  V.  C.,  in  Caldwell  v. 

inapplicable  when  the  reason  for  it  fails.  Lieber,    7    Paige,    483,    495.       He   said  : 

Lewis  V.  Motfett,  11   111.  392.     Upon  the  "  Where  there  is  no  special  agreement  to 

same  ground,    if  partners  agree  to  invest  that  effect,    partners  are  not  entitled  to 

ecpial  amounts  of  capital  in  the  joint  en-  charge  each  other  for  their  services  in  the 

terprise,   and  one    partner  advance    more  management  of  the  concern  ;  and  the  law 

than  his  share,  the  partnership  must  allow  never  undertakes  to  settle  between  them 

him  interest  on  the  excess.     Keynolds  v.  their  various  and  unequal  services  in  the 

Mardis,   17  Ala.  32.      If  A.   &   B.   enter  transacti(m  of  their  private  affairs."     But 

into  partnership  under  articles  by  which  if  a  partner  refuses  to  discharge  the  duties 

"A.  bargains  and  agiees  to  give  B.  four  he  is  bound  to  by  the  articles,  he  may  be 

hundred  and  fifty  dollars  to  manage  the  charged  with  their  value  in  the  account, 

business,"  B.'s  salary  is  to  be  paid  not  by  ^Marsh's  Appeal,  69  Pa.  30. 
A.  alone,  but  by  the  partnership,  and  out  (c)   Beatty  v.   Wray,  19  Pa.  516,   519. 

of    the    partnership   funds.      Weaver    i;.  The  rule  is  the  same  after  the  dissolution 

Upton,   7   Ired.   458.      See    Reynolds    v.  of  the  firm,  by  death  or  otherwise.     Part- 

Mardis,  supra.  ners  who   wind  up  the  concern  are   not 

(a)  Philips  V.  Turner,  2  Dev.  &  P,.  E<[.  entitled    to    any  extra   compensation    for 

123.     In  this  case  the  partnership  busi-  their  time  and  labor.     Burden  v.  Burden, 

ness  was  under  the  almost  exclusive  super-  1   Ves.  &   B.  170  ;    Stocken  v.  Dawson,  6 

intendence  of  the  partner  making  a  claim  Beav.  371,  376  ;    Beatty  v.  Wray,   19  Pa. 

lor  extra  compensation.     See  Caldwell  t".  516;  Lyman  r.Lyman,  2  Paine,  C.  C.  11,52. 

^  Compensation  of  a  iwrlner.  —  In  the  absence  of  special  agreement,  one  partner 
can  claim  no  comjiensatiou  for  his  services.  Ligare  v.  Peacock,  109  111.  94  ;  Lee  v. 
Davis,  70  Ind.  464  ;  .McBride  v.  Stradley,  103  Ind.  465,  2  N.  E.  358  ;  Taylor  v.  Rag- 
land,  42  La.  Ann.  1020,  8  So.  467  ;  Godfrey  v.  White,  43  Mich.  171,  5  N.  W.  243; 
Frank  v  Webb,  67  Miss.  462,  6  So.  620  :  Gaston  v.  Kellogg,  91  Mo.  104,  3  S.  W. 
589;  Coddington  v.  Idell,  29  N.J.  Eq.  504  ;  Lindsey  v.  Stranahan,  129  Pa.  635,  18 
Atl.  524  ;  Frazier  v.  Frazier,  77  Va.  775  ;  Eoots  v.  Mason  City  Salt  Co.,  27  W.  Va. 
483.  And  this  is  equally  true,  though  the  services  of  one  partner  are  greater  than 
those  of  the  others.  Burgess  v.  Badger,  124  111.  288,  14  N.  E.  850.  As  where  a  part- 
ner winds  up  the  business  of  the  firm.  Denver  v.  Roane,  99  U.  S.  355  ;  Shelton  v. 
Knight,  68  Ala.  598  ;  Tillotson  v.  Tillotson,  34  Conn.  335  ;  Terrell  v.  Rowland,  86  Ky. 
67,  \  S.  W.  825  ;  Sangston  v.  Hack,  52  Md.  173  ;  Gregory  o.  Menefee,  83  Mo.  413  ; 
Brown's  Appeal,  89  Pa.  139;  Shriver's  Appeal,  (Pa.)  12  Atl.  553;  Cothran  v. 
Knox,  13  S.  C.  496. 

Where  it  is  so  agreed,  one  partner  may  have  compensation  for  his  services  ;  and 
this  agreement  may  be  implied  as  well  as  express.  Adams  v.  Warren,  (Ala.)  11  So. 
754  ;  Weeks  v.  McClintock,  50  Ark.  193,  6  S.  W.  734  ;  Askew  v.  Springer,  111  HI. 
662;  Lassiter  v.  Jackman,  88  Ind.  118  ;  Sangston  v.  Hack,  52  Md.  173  ;  Ciamer  v. 
Bachmann,  68  jMo.  310  ;  Mann  i;.  Flanagan,  9  Ore.  425.  As  by  entries  in  the  partner- 
ship books.     Godfrey  v.  Templeton,  86  Tenn.  161,  6  S.  W.  47. 

Even  if  one  partner  is  absent  by  reason  of  sickness,  the  other  has  no  claim  foi 


202  THE    LAW    OF    PARTNERSHIP.  [CH.    VII. 

§  loo.  Interest  on  Advances.  —  Upon  the  same  principle,  no 
partner  is  entitled  to  interest  on  moneys  advanced  to,  or  deposited 
with  the  firm,  for  its  use,  unless  there  be  a  special  agreement  to 
that  effect,  (ca)    There  is  no  established  rule  as  to  the  allowance  of 

[ar)  Lne  (-■.  Lashbrooke,  8  Dana,  214;  Eradford,    L.    R.    5   Ch.   519.     Nor   is   a 

Day  V   Lockwood,  24  Conn.   185  ;  Desha  paitner  chargeable  with  interest  on  over- 

v.  Shepard,  20  Ala.  747  ;    Tiriell  v.  Jones,  drawn  profits.     Mayiuott  v.   Mayinott,  9 

30  Cal.  655  ;  Wiiitcomb  v.  Converse,   119  Jur.   x.  s.   496.     Where  by  the  contract 

Mass.     38.      If    there    is   an    agreement,  partners  agreed   to  keep   one   another  in 

interest  is  allowed  with  annual  rests  be-  funds  to  a  specified  extent,  and,  on  dis- 

foi-e  dissolution,   but  without  rests  after,  solution,  one  was  found  not  to  have  con- 

Barfield  v.  Loughborough,  L.  11.  8  Ch.  1,  tributed  to  the  extent  agreed,  interest  was 

disai)proving  Pilling  v.  Pilling,  3  De  G.  J.  allowed  on  the  difference,  to  the  partner 

&  S.  162.     But  it  is  elsewhere  held  that,  whose   advances   were    in    excess  of    the 

in  taking  account  after  dissolution,  the  others.  Pini  v.  Harris,  Ir.  Rep,  10  Eq. 
articles  allowing  interest  on  capital,  in-  442.  But  In  re  German  Mining  Com- 
ti-rest  from  that  time  and  during  the  pany,  4  De  G.  M.  &  G.  19,  Knight  Bruce, 
process  of  settlement   is  not  to  be  allowed     L.  J.,  said  :  "  I  think  that  mercantile  usage 

on    each    i)artner's    capital     contributed,  and  the  general  course  of  trade  dealings 

Watney  v.  W' ells,  L.   R.   2  Ch.   250  ;  but  do,  where  a  partner  in  trade  has  duly  and 

otherwise,  if  there  is  no  agreement  for  in-  properly  advanced  money  of  his  own  for 

terest.    Tntt  v.  Land,  50  Ga.  338.     When  the  purposes  of  the  partnership  business, 

]irofits  are  left   in    business,  the   partner  so  as  to  become  justly  a  creditor  in  ac- 

leaving    them    does    not    draw    interest,  count  with  the  partnership  for  the  amount, 

unless  by  express  agreement.     Dinham  v.  raise  an  implied  contract  for  interest,  so 

compensation.  It  is  one  of  the  risks  of  the  partnership,  to  whicli  each  partner  is 
subject.  Heath  v.  AVaters,  40  Mich.  457.  The  same  is  true  if  one  partner  refuses  to 
do  iiis  share  of  the  work.  Henry  v.  Bassett,  75  Mo.  89.  But  where  one  partner  was 
employed  elsewhere  so  that  he  could  not  give  his  time  to  the  firm  during  nine  months  in 
everv  year,  it  was  held  that  an  agreement  might  be  implied  to  I'ay  the  other  partner 
compensation  for  his  services  during  that  time.  Moriis  v.  Griffin,  (la.)  49  N.  W.  846. 
And  so  where  one  partner  left  the  country,  leaving  the  other  to  wind  up  the  business, 
the  latter  is  entitled  to  compensation.  Clement  v.  Ditterline,  (Ky. )  11  S.  W.  658. 
It  might  be  reasonable,  however,  to  require  some  evidence  in  addition  to  the  mere  fact 
of  absence  of  one  partner.  The  fact  that  before  his  admission  to  the  firm  one  partner 
was  em^iloyed  in  the  business  at  a  salary  gives  him  no  claim  for  compensation. 
Dunlap  r.  Watson,  124  Mass.  305. 

It  has  been  suggested  that  where  the  profits  of  a  business  are  the  result  solely  of 
the  skill  and  labor  of  the  partners,  as  in  a  professional  partnership,  a  surviving  part- 
ner might  be  entitled  to  compensation  for  his  services  in  winding  up  the  business. 
Denver  v.  Roane,  99  U.  S.  355.  If  there  is  anything  in  this  suggestion,  it  must  of 
course  be  confined  to  the  case  of  a  surviving  partner. 

Where  after  dissolution  of  partnership,  settlement  in  full  of  its  affairs,  and  the 
death  of  one  partner,  the  survivor,  thinking  the  firm  had  a  certain  cause  of  action, 
prosecuted  it  successfully  without  the  assistance  of  his  copartner's  representatives,  and 
recovered  a  large  amount  of  money,  he  was  held  entitled  to  compensation  for  his  ser- 
vices.    Zell's  Appeal,  126  Pa.  329,  17  Atl.  647. 

W^here  the  managing  partner  employs  his  minor  children  in  the  work  of  the  part- 
nershi]),  he  is  entitled  to  compensation  for  their  services.  Taylor  v.  Ragland,  42  La. 
Ann.  1020,  8  So.  467.  WHiere  a  partner  was  by  tlie  articles  to  receive  a  salary  for 
his  services,  it  was  held  that  he  had  no  claim  to  it  while  he  was  sick  and  unable  to 
render  the  services.     Kinney  v.  Maher,  156  Mass.  252,  30  K.  E.  818. 


§    158.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  203 

interest  between  partners.  The  circumstances  of  each  particular 
case  must  determine,  (cb)  A  partner  is  entitled  to  interest  on 
advances  although  there  was  no  express  agreement  to  that  effect, 
if  it  may  be  inferred  from  circumstances  or  their  usage,  that  an 
allowance  of  interest  was  intended,  (cc) 

§  157.  Rate  of  Interest.  —  Interest  payable  by  the  terms  of  the 
contract  at  a  greater  rate  than  the  law  permits,  except  by  special 
contract,  is  to  be  reckoned,  after  the  maturity  of  the  contract,  at 
the  rate  fixed  by  the  law,  in  the  absence  of  express  agreement. 
Thus,  where  the  rate  is  six  per  cent,  unless  otherwise  agreed,  a 
note  payable  in  one  year  at  ten  per  cent  interest  draws  but  six  per 
cent  after  the  expiration  of  the  year,  {cd}  ^ 

§  158.  How  far  Partners  are  Trustees.  — As  a  general  principle, 
which  will  sometimes  be  of  much  use  in  determining  the  rights 
and  obligations  of  copartners,  it  may  be  said  that  all  partners  are 
regarded  somewhat  as  trustees  for  the  firm.^     We  have  already 

as   to   entitle   the   partner   advancing    to  Ludwick      v.    Huntsenger,    5     W.    &    S. 

have  his  account  with   the  firm  credited  .51  ;  Cook  v.  Fowler,  L.   R.   7  H.  L.   27  ; 

with   interest    accordingly,   although    his  Pearce    v.     Hennessy,     10     R.     I.    223  ; 

partners  may   not   have   authorized,   and  Kitchen  v.   Bank,  14   Ala.    233  ;  Lash  v. 

may  not  have  known  of  the  transaction  ;  Lambert,    15    Minn.     416  ;    Hubbard    v. 

at   least,  in   the   absence  of  any  express  Callahan,  42  Conn.  524  ;  Searle  v.  Adams, 

contract  to  the  contrary."     See  In  re  Ger-  3  Kas.    315.     See  Cromwell  v.  County  of 

man    Mining   Company,    27    Eng.    L.    &  Sac,  96  U.  S.  51.     See  also  contra,  Bran- 

Eip  158.     [See  pos^  §  417,  n.]  non  v.   Hursell,   112  Mass.   63  ;  Hand  v. 

(ch)  Gyger's  Appeal,  62  Pa.  73  ;  Moss  Armstrong,   18    la.   324  ;    Marietta    Iron 

V.  McCall,  75  111.  190.  Works    v.    Lattimer,    25    Ohio   St.    621  ; 

(cc)  Morris  17.  Allen,  1  McCarter,  (14  X.  Hopkins  v.  Chittenden,  10  Te.x.  189; 
J,  Eq.)44 -.Woodv.  Scoles,  L.  R.  iCh.  369.  Pruyu     v.    Milwaukee,     18     Wis.     367; 

(cd)  Brewster  v.  Wakefield,  22  How.  Etnyre  v.  McDaniel,  23  111.  201  ;  Kil- 
118  ;  Eaton  v.  Boissoncault,  67  Me.  540  ;  gore  v.  Powers,  5  Blackf.  22.  But  see 
Burnhisel     v.    Firman,     22     Wall.  170  ;     Ayer  v.  Tilden,  15  Gray,  178. 

1  The  rule  stated  in  the  text  is  supported  by  the  weight  both  of  authority  and  of 
argument.  1  Sedg.  Dam.  (8th  ed.)  §  325  et  seq.  ;  Goodchap  v.  Roberts,  14  Ch.  D. 
(C.  A.)  49  ;  Holden  v.  Trust  Co.,  100  U.  S.  72  ;  Woodruff  v.  Webb,  32  Ark.  612  ; 
Cummings  v.  Howard,  63  Cal.  503  ;  Jefferson  County  v.  Lewis,  20  Fla.  980  ;  Rilling 
V.  Thompson,  12  Bush,  310  ;  Brown  v.  Hardcastle,  63'  Md.  484  ;  McLane  v.  Abrams, 
2  Nev  199  ;  Ashuelot  R.  R.  v.  Elliot,  57  N.  H.  397  ;  Hamilton  v.  Van  Ren.sselaer, 
43  N.  Y.  244  ;  Thatcher  v.  Massey,  20  S.  C  542  ;  Perry  v.  Taylor,  1  Utah,  63  ;  and 
authorities  cited  in  note  (cd). 

See,  however,  contra,  Kerr  v.  Haverstick,  94  Ind.  178  ;  Downer  r.  Wliittier  144 
Mass.  448;  Warner  v.  Juif,  38  Mi.^h.  662;  Meaders  v.  Gray,  60  Miss.  400;  Macon 
Co  V.  Rodgers,  84  Mo.  66  ;  Kellogg  v.  Lavender,  15  Neb.  256  ;  Wade  v.  Pratt,  12 
Heisk.  231  ;  Cecil  v.  Hicks,  29  Gratt.  1  ;  Pickens  v.  McCoy,  24  W.  Va.  344  ;  and 
authorities  cited  in  note  {cd). 

2  "  If  fiduciary  relation  means  anything,  I  cannot  conceive  a  stronger  case  of  fiduciary 
relation  than  that  which  exists  between  partners.  Their  mutual  confidence  is  the  lite 
blood  of  the  concern.  It  is  because  they  trust  one  another  that  they  are  partners  in 
the  first  instance  ;  it  is  because  they  continue  to  trust  one  another  that  the  business 


204  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

remarked  that  the  law  of  partnership  is  a  thing  by  itself  ;  but, 
like  every  other  branch  of  the  law-merchant,  and  indeed  of  the 


goes  on."  Bacon,  V.  C,  in  Helmore  v.  Smith,  35  Ch.  D.  436,  444.  See  to  the  same 
etfect,  Koby  v.  Colehonr,  135  111.  300,  25  N.  E.  777  ;  Keneher  v.  Anderson,  95  N.  C. 
208.  "These  properties  of  partnership  render  it  eminently  a  relation  of  trust.  All  its 
effects  are  held  in  trust,  and  each  partner  is,  in  one  sense,  a  trustee ;  a  trustee  for  the 
newly  created  entity,  the  partnershi}),  and  for  each  member  of  the  firm,  who  thus 
becomes  a  beneficiary  under  the  trust."  Stone,  C.  J.,  in  Goldsmith  v.  Eichold,  94  Ala. 
116,  10  So.  80. 

Therefore  where  one  partner  buys  in  property  belonging  to  the  firm,  as  njion  a  sale 
on  execution,  he  takes  it  for  the  beneht  of  the  whole  firm,  not  for  himself  individually. 
Railsback  v.  Lovejoy,  116  111.  442,  6  N.  E.  504  ;  Roby  v.  Colehour,  135  111.  300,  25 
N.  E.  777  ;  Jones  v.  Dexter,  130  Mass.  380  ;  Devore  v.  Woodruff,  1  N.  Dak.  143,  45 
N.  W.  701 ;  Lamar  v.  Hale,  79  Va.  147-  But  see  Helmore  v.  Smith,  35  Ch.  D.  436 
(C.  A.)  ;  RoU(iuette  y.  Ryan  (Ky.),  8  S.  W.  702. 

A  partner  foi'  the  same  reason  cannot  buy  up  a  claim  against  the  firm.  If  he  takes 
an  assignment  of  such  a  claim  he  holds  for  the  firm,  and  is  entitled  only  to  charge 
against  the  firm  the  amount  he  actually  paid  out.  Easton  v.  Strothei',  57  la.  506,  10 
N.  W.  877  (note);  Catron  v.  Shepherd,  8  Neb.  308  (cliosc  in  action).  This  is  true 
even  if  the  firm  has  been  dissolved.  Filbrun  v.  Ivers,  92  Mo.  388,  4  S.  W.  674.  It  is 
payment  even  as  to  third  parties  in  the  absence  of  some  equity  to  keep  it  alive.  Booth 
V.  Farmers'  &  Mechanics'  Nat.  Bank,  74  N.  Y.  228  (judgment). 

For  the  same  reason  a  partner  cannot  take  a  renewal  of  a  firm  lease  for  his  own 
benefit  ;  though  he  takes  it  in  his  own  name  he  holds  for  the  firm,  even  if  there  was  no 
renewal  clause  in  the  original  lease.  Featherstonhaugh  v.  Fenwick,  17  Ves.  298  ;  Clegg 
V.  Fishwick,  1  MacN.  &  G.  294  ;  Clements  t;.  Hill,  2  De  G.  &  J.  173  ;  Bell  v.  Barnett, 
21  W.  R.  119;  Leach  v.  Leach,  18  Pick.  68  ;  Struthers  v.  Pearce,  51  N.  Y.  357  ; 
Mitchell  V.  Read,  61  N.  Y.  123,  84  N.  Y.  556.  This  seems  to  be  true  even  after  dis- 
solution ;  for  the  chance  of  renewal  may  be  a  valuable  asset  of  the  partnership,  in  which 
the  whole  firm  has  a  right  to  participate.  Johnson's  Appeal,  115  Pa.  129,  8  Atl.  36. 
And  so  where  the  renewal  was  taken  during  the  continuance  of  the  partnership  though 
pending  arrangements  for  dissolution.  Sneed  v.  Deal,  53  Ark.  152,  13  S.  W.  703. 
But  where  one  partner  died,  and  the  survivor,  without  fraud,  took  a  renewal,  this  was 
held  not  to  benefit  the  estate  of  the  deceased  partner  ;  the  fiduciary  relation,  like  the 
partnership,  ceased  with  the  partner's  death.  Chittenden  v.  Witbeck,  50  Mich.  401, 
15  N.  W.  526. 

The  same  rule  applies  where  one  partner  obtains  any  benefit  through  the  partner- 
ship which  in  equity  the  firm  should  have.  Thus  where  a  partner  insured  firm  prop- 
erty in  his  own  name  he  was  requiied  to  account  to  the  firm  for  the  insurance  money. 
Tehbetts  v.  Dearborn,  74  Me.  392.  And  where  a  partner  contributed  an  invention  as 
his  capital,  and  then  took  out  a  patent  on  it  in  his  own  name,  he  held  the  patent  in 
trust  for  the  firm.     Hill  v.  Miller,  78  Cal.  149,  20  Pac.   304. 

Where  a  partner  buys  property  with  the  funds  of  the  firm,  and  takes  title  in  his  own 
name  (or  in  that  of  his  wife),  he  will  be  held  a  trustee  for  the  firm.  Helmore  v.  Smith, 
35  Ch.  D.  436  (C.  A.)  ;  Kayser  v.  Maugham,  8  Col.  339,  7  Pac.  286  (semble)  ;  Ren- 
frow  V.  Pearce,  68  111.  125  ;  Holdredge  ■;;.  Gwynne,  18  N.  J.  Eq.  26  ;  Partridge  v. 
Wells,  30  N.  J.  i:q.   176. 

A  partner  in  acting  beyond  the  scope  of  the  business  is  not  acting  in  a  fiduciary 
capacity.  Wheeler  v.  Sage,  1  Wall.  518.  As  for  instance  in  buying  the  share  of 
another  partner  in  the  firm.  Cassels  v.  Stewart,  6  App.  Cas.  64.  Or  in  buj'ing  in  on 
foreclosure  the  mortgaged  individual  share  of  another  partner  in  the  firm  real  estate. 
Rouquette  v.  Ryan  (Ky. ),  8  S.  W.  702.  And  so  ordinarily  the  fiduciary  relation  ceases 
upon  dissolution.     Consequently  one  has  no  claim  to  participate  in  a  purchase  made 


§  159  ]  RIGHTS    AND    DUTIES   OF    PARTNERS.  205 

law  in  general,  it  is  connected,  by  many  relations  and  analogies, 
and  many  common  principles,  with  collateral  branches ;  and  these 
it  is  often  useful  to  consider.  Thus  the  law  is  well  settled  in 
regard  to  trustees.  A  wisely  adjusted  system  of  right  and  obli- 
gation guides  the  trustee,  preserves  the  property  or  interests  in 
liis  hands,  and  protects  both  him  and  the  cestui  que  trust;  him 
from  all  undue  interference  and  molestation  while  faithfully  dis- 
charging his  duty,  and  the  cestui  que  trust  from  all  injurious 
breach  of  duty.  Now,  a  copartner  has  powers,  opportunities, 
and  duties,  in  relation  to  the  partnership,  very  similar  to  those 
which  a  trustee  has  in  relation  to  his  cestui  que  trust.  And,  so 
far  as  they  are  similar,  it  has  been  repeatedly  held  that  the  same 
rules  and  principles  are  applicable  to  them,  both  in  law  and  in 
equity.  ((?) 


SECTION  vr. 

INTERPRETATION    OF    PARTNERSHIP    AGREEMENT, 

§  159.  Articles  of  Copartnership.  —  It  would  be  very  possible 
for  persons  to  enter  into  partnership  with  no  articles,  and  no 
agreements  whatever,  excepting  the  bare  agreement  to  become 
partners.  Then  the  law  would  provide  for  them  a  set  of  rules 
and  arrangements  which  would  cover  nearly  the  whole  ground, 
and  would  probably  be  much  the  same  with  those  agreed  upon 
by  parties  in  most  cases.  But  generally,  if  not  always,  the  par- 
ties themselves  enter  into  some  definite  and  special  bargains  or 
terms,  which  are  to  be  taken  as  the  foundation  of  their  part- 
nership. Sometimes  these  are  agreed  upon  only  orally,  and 
sometimes  they  are  expressed  in  writing.  It  does  not  seem  that 
there  is  any  difference  in  their  effect  and  operation,  whether 
spoken  or  written,  if  only  they  are  ascertained ;  (g)  but  there  is 

(d)  See  the  remarks  of  Story,  J.,  in  action  of  covenant  can  be  maintained  for 
Kelley  v.  Greenleaf,  3  Story,  93,  101.  a  breach  of  tlie  stipulations  in  it,  which 
Surviving  partners  are  trustees  for  certain  would  be  binding  on  the  representatives 
purposes.     See  mife,  §  154,  note  (n).  of   the   contracting  parties   in    the   same 

(e)  It  might  be  one  advantage  of  manner  and  to  the  same  extent  as  other 
having   a   deed   of    partnership,   that   an  specialty  obligations. 

after  dissolution  by  his  former  copartner,  though  it  was  connected  with  the  firm  busi- 
ness.    Kennedy  v.  Porter,  109  N.  Y.  526,  17  N.  E.  426. 

There  is  no  fiduciary  relation  between  mining  paitners.  Harris  v.  Lloyd,  11  Mont 
390,  28  Pac.  736  ;  Lamar  v.  Hale,  79  Va.  147. 


206  THE   LAW    OF    PARTNERSHIP.  [CH,    VII 

much  difference  in  respect  to  the  evidence  of  the  agreement ;  for 
the  only  way  to  be  reasonably  certain  of  the  terms  of  a  bargain 
is  to  reduce  it  to  writing  at  the  time,  and,  as  a  matter  of  precau- 
tion, have  it  verified  bv  the  signatures  of  all  who  arc  interested 
in  it.  (/) 

§  160.  Special  terms  bind  Partnsrs  only  —  Tn  regard  to  the 
articles  of  copartnership,  the  two  most  general  principles  have 
already  been  stated.  They  are,  first,  that  the  law  permits  part- 
ners to  enter  into  any  arrangements  or  engagements  between 
themselves  which  are  not  void  as  against  statutory  provisions  or 
the  general  principles  of  law.  These  may  conflict  with  any  or 
all  of  the  especial  rules  of  the  law  of  partnership,  but  will  be  none 
the  less  binding  upon  the  parties  themselves.  Thus,  if  A.,  B.,  & 
C.  choose  to  enter  into  partnership,  and  agree  that  A.  shall  keep 
all  the  accounts,  and  that  neither  B.  nor  C.  shall  ever  see  them 
without  his  permission ;  or  that  A.  alone  shall  sign  the  name  of 
the  firm ;  or  that  he  shall  share  the  profits,  but  not  sliare  any 
loss;(,^)  any  or  all  of  these  agreements  woidd  be  binding  on  the 
parties. 

The  second  general  rule  is,  as  already  stated,  that  these  special 
arrangements  or  bargains  are  not  binding  or  operative  upon  any 
third  parties  who  are  not  especially  informed  of  them,  and  sub- 
sequently enter  into  transactions  in  acknowledgment  of  them.  (A) 
The  general  rules  of  law,  and  the  special  rules  of  the  law  of  part- 
nership, every  person  is  presumed  to  know,  and  cannot  ground  a 

(/)  The  importance  of  written  articles,  has   been    stipulated     that   some   one   or 

by   which  the  courts  may  be    guided  in  more  of  the   partners  shall  not  liave  the 

determining  all  questions  in    which  the  power    of     putting    the     firm    name    to 

partnership   or  the   several  partners    are  negotiable  paper.     If  notwithstaning  such 

interested,  and  especially  as  to  the  method  stipulation,    the    prohibited   partners   do 

of  winding  up  the  affairs  of  the  joint  con-  exercise    this   power,   the    partnership    is 

cern     upon    a    dissolution,     is    strongly  bound,  unless  knowledge  of  such  proliihi- 

enforced   liy  Lord  Eldon  in  Crawshay  v.  tion,  actual    or  constructive,  can  be  fixed 

Collins,  2  Russ.  341,  343.  upon  the  party  taking  the  paper  ;    audit 

(r/)  See  North  British  Bank  v.  Collins,  makes  no  difference  that  the  stipulation  be 

28  Eng.  L.  &  E(i.  7.  made   in    favor    of  a    dormant    partner. 

(h)  Sandilands  v.  Marsh,  2  B.  &  Aid.  Winship   v.    Bank    of    United   States,    5 

697  :  Smith  v.  Jameson,  5  T.  R.  601,  603 ;  Mason,  176,  5  Pet.  529 ;  Grant  v.  Hawkes, 

Craven   v.    "Widdows,    2    Ch.    Ca.    139;  Chitty  on  Rills,  42 ;   South  Carolina  Bank 

Hawken   v.    Bourne,    8    M.    &    W.    703,  v.  Case,  8  B.  &  C.  427  ;    Smith  v.  Lusher, 

710  ;    Tradesmen's    Bank    v.    Astor,     11  5  Cow.  689,    710  ;    Walden   v.  Sherburne, 

Wend.  87,    90  ;  Tillier  v.   Whitehead,  1  15  Johns.   409  ;    Whitaker  v.  Brown,  16 

Dallas,  269  ;  Devin  v.  Harris,    3  Greene,  Wend.   505,  508 ;    Bank  of    Rochester  v. 

(la.)  186;    Nichols  v.  Cheairs,  4  Sneed,  Monteath,   1    Denio,   402,   406;    Gano   v. 

229  ;    [Irwin  v.  AVilliar,   110    U.  S.  499  ;  Samuel,  14  Ohio,  592;  Bank  of  Kentucky 

Gruner   v.  Stucken,  39   La.  Ann.  1076,  3  v.  Brooking,  2  Litt.  41  ;  [Bates  u.  Forcht, 

So.  338.]      The  proposition   of  the  text  is  89  Mo.  121,  1  S.  W.  120  ;]  ante,  §  83. 
frequently  illustrated  by  cases  in  which  it 


§  IGl.] 


RIGHTS   AND    DUTIES    OF   PARTNERS. 


207 


right  or  a  defence  upon  his  ignorance  of  them.  But  no  one  is 
])resuraed  to  know  those  private  arrangements,  and  no  one  is 
therefore  affected  Vy  them  until  they  are  brought  home  to  his 
knowledge. 

I  161.  General  Principles  of  Construction.  —  There  remain  to  be 
considered  the  rules  and  princij)les  which  courts  apply  to  the 
construction  of  partnership  articles.  In  the  first  place,  so  far 
as  the  articles  contain  provisions  which  the  law  would  create 
between  the  partners  if  the  articles  did  not,  they  might  be 
regarded  as  surplusage.  But  if  any  question  arose  as  to  the 
bearing,  application,  or  exact  effect  of  these  rules,  great  regard 
M'Oukl  be  i)aid  to  the  intention  of  the  parties  as  it  was  expressed 
in  their  articles.  («') 


{%)  Gainsborough  v.  Stork,  Barnard. 
Ch.  312.  General  language  used  in  one 
place  will  .sometimes  be  construed  to  run 
thront;h  and  ])ervade  the  whole  body  of 
the  articles.  Thus,  the  words  of  covenant 
generally  occurring  at  the  commence- 
ment of  a  partnership  deed,  usually 
declare  the  covenant  to  be  joint  and 
several  ;  and  words  of  covenant  sub- 
sequently occurring  in  the  instrument 
are  on  that  account  usually  construed  to 
be  intended  to  be  also  joint  and  several. 
But  it  is  to  be  borne  in  mind  that,  what- 
ever may  be  the  Form  of  a  covenant,  if 
the  interest  and  cause  of  action  be  joint, 
the  action  must  be  by  all  the  covenantees, 
and,  on  the  other -hand,  if  the  intei'est  and 
cause  of  action  be  several,  the  action 
may  be  by  one.  Hence,  notwithstanding 
the  rule  of  construction  we  have  just 
stated,  where  the  covenant,  introductory 
to  a  partnership  deed,  is  declared  to  be 
joint  and  several,  some  of  the  covenants  in 
the  instrument  may  be  such  that  the 
partner  committing  a  breach  can  be  sued 
only  by  all  the  rest  jointly,  while  for  the 
breach  of  others  a  several  action  by  one 
of  the  partners  may  be  maintainable, 
Eccleston  v.  Clipsham,  1  Saun.  153.  See 
Owston  V.  Ogle,  13  East,  538  ;  Servante  v. 
James,  10  B.  &  C.  410. 

There  may  be  single  and  ])articular 
provisions  in  partnership  articles,  which, 
from  change  of  circumstances,  lapse  of 
time,  or  in  other  ways,  have  come  to  be 
entirely  inconsistent  with  and  contra- 
dictory to  the  whole  .schpme  and  tenor  of 
the  agreement.     In  such  case,  a  court  of 


equity  regarding  the  general  object  and 
purpose  of  the  parties  as  superior  to  and 
controlling  any  lesser  and  subordinate 
intent,  will  refuse  to  carry  into  effect  the 
minor  and  inconsistent  stipulation.  See 
this  illustrated  with  respect  to  the  clause 
giving  to  two-thirds  of  the  partners  the 
power  to  expel  a  member  of  the  firm. 
Bli-sset  V.  Daniel,  11  Hare,  493.  See  also 
Ex  parte  Croxton,  1  De  G.  U.  &  G.  600, 
as  to  the  construction  of  apparenth' 
inconsistent  stipulations  respecting  the 
liabilities  of  a  retiring  partner. 

When  a  partnership  consi.sts  of  very 
many  partners,  as  in  a  joint-stock  company, 
the  ]iartners  are  to  be  held,  as  strictly  as 
may  be,  to  the  terms  of  association.  Lawes's 
Case,  1  De  G.  M.  &  G.  421. 

In  the  construction  of  partnership 
articles.  Lord  Eldon  said,  in  Greddes  v. 
Wallace,  2  Bligh,  295:  '"You  are  to 
take  the  whole  instrument  together,  and 
you  are  not  only  to  look  at  the  whole 
of  the  instrument  together,  but  you 
are  to  look  at  the  transactions  of  the 
parties  ;  for,  whatever  may  be  the  lan- 
guage of  a  partnership  deed,  the  dealings 
and  transactions  among  the  partners  may 
be  such  as  to  amount  to  distinct  evidence 
that  some  of  the  articles  in  that  partner- 
ship deed  were  waived  by  all  parties,  and 
that  some  of  the  articles  in  that  deed  were 
not  to  be  considered  as  rules  which  should 
regulate  the  rights  and  duties  of  the 
partners."  And  partnership  articles  are 
read  in  a  court  of  equity  as  not  contain- 
ing the  clauses  on  whicn  the  parties  have 
not  acted.      Lord   Eldon   in  Jackson    v. 


208  THE    LAW    OF    PARTNERSHIP.  [CH.    VII. 

If  any  of  the  rules  of  partnership  law  are  not  interfered  with 
by  the  articles,  —  that  is,  if  the  articles  are  silent  on  any  points 
established  by  the  law,  —  it  will  be  presumed  that  the  parties 
intended  that  the  right  given  and  the  duties  imposed  by  the  law 
in  these  respects  suited  them  perfectly,  and  all  such  rules  of  law 
will  be  enforced  in  the  same  manner  as  if  they  entered  into  the 
articles,  (j) 

§  162.  Bill  for  Specific  Performance  of  Articles.  —  Most  of  the 
questions  litigated  under  articles  of  j^artnership  come  before 
courts  of  equity  ;  nor  is  there  any  doubt  as  to  the  full  juris- 
diction of  equity  over  these  articles,  or  any  general  difference 
between  the  principles  which  equity  applies  to  questions  of  part- 
nership and  those  applicable  to  other  questions  of  an  analogous 
character,  (kk) 

A  very  frequent  prayer  of  a  complainant  in  equity  is  for  a 
decree  for  a  specific  performance.  This  prayer  the  court  will 
hear  in  some  form,  whether  the  act  required  is  demanded  by  the 
articles,  or  is  a  legal  obligation  created  by  the  law  ;  and  will 
grant,  as  in  ordinary  cases,  provided  the  contract  or  duty  be 
clearly  made  out,  and  there  is  no  waiver  on  the  complainant's 
side,  or  no  breach  on  his  part  justifying  that  of  which  he  com- 
plains ;  and  provided  the  performance  prayed  for  is  practicable, 
remedial,  and  just,  as  between  the  parties,  and  not  injurious  to 
third  parties.  But  one  principle,  which  often  prevents  this 
decree  in  ordinary  cases,  is  frequently  applicable  in  partnerships. 
It  is  this:  A  partner  may  bind  himself  by  articles,  to  be  honest, 
diligent,  skilful,  &c.,  and  is  bound  by  law  to  be  the  first  perfectly, 
and  the  others  as  far  as  the  exigencies  of  the  partnership  require 
and  his  capacity  permits.  And  any  breach  of  these  obligations, 
actual  or  intended,  equity  will  prevent  by  injunction,  if  that  suits  the 
case,  or  apply  any  other  proper  remedy.  But  no  specific  perform- 
ance can  be  decreed  ;  for  it  is  difficult,  not  to  say  impossible,  to 
draw  an  exact  defining  line,  and  say  how  industrious  or  skilful  a 
partner  shall  be,  or  how  he  shall  prove  his  honesty.  But  if 
his  fraud,  his  negligence,  or  his  ignorance  threaten  an  actual 
mischief  which  the  court  can  prevent,  or  have  caused  one  for 

Sedgwick,  1  Swanst.  469.     But  the  topic  of  relation  are  regulated,  as  far  as  tliey  are 

the  waiver  of  partnership  articles  will  be  touched    by    the  express    contract ;   if  it 

separately  considered  hereafter.  Post,  §  164.  does  not  reach  all  those  duties  and  obliga- 

(j )  In  Crawshay    v.  Collins,  15  Ves.  tions,  they  are  implied  and  enforced  by 

218,   226;    Lord  Eldon  said  :    "Partner-  the  law."  Smithi».  Jeges,  4  Beav.  503,  505. 

ships  are  regulated  either  by  the  express  See  Jackson  v.  Sedgwick,  1  Swanst.  469. 
contract,   or  by  the   contract  implied  by  (kk)  Whitman    v.    Robinson,    21    Md. 

law  from  the  relation  of  the  parties.     Tlie  SO  ;    Horn  fray  v.  Fothergill,  L.  R.  1   Eq. 

duties  and  obligations  arising  from  that  567  ;  Ibbotson  v.  Elam,  L.  R.  1  Eq   188. 


§  163.]  RIGHTS    AND    DUTIES   OF   PARTNERS.  209 

which  he  can  make  compensation,  the  aid  of  the  court  will 
then  be  given.  We  have  mentioned  this  subject  here,  as  it 
seemed  necessary  to  notice  it  in  connection  with  the  articles 
of  copartnership  ;  but  shall  treat  of  it  more  fully  hereafter,  when 
considering  the  general  subject  of  the  equitable  processes  and 
remedies  between  partners,  {k) 

§  163.  Specific  Performance  of  Agreement  to  form  Partnership.  — 
Equity  is  sometimes  called  upon  to  decree  a  performance  of  an 
agreement  to  enter  into  partnership.  There  can  be  no  doubt 
whatever  of  the  perfect  competence  of  the  court  to  make  such  a 
decree,  if  they  see  fit.  (/)  But  there  are  so  many  possible 
objections  to  it,  that,  in  point  of  fact,  it  very  seldom  is  made  -or 
asked  for.  If  the  agreement  is  for  a  term  of  time,  a  court  would 
hesitate  before  it  compelled  parties  to  enter  a  relation  of  long 
endurance,  in  which  it  is,  above  all  things,  necessary  that  there 
exist  entire  mutual  confidence  and  the  most  unembarrassed 
co-operation;  although  there  are  undoubtedly,  instances  of  this, 
enough  perhaps  to  constitute  a  general  rule,  (m)  If,  on  the 
other  hand,  no  term  of  time  is  fixed  by  the  agreement,  it  would 
be  merely  nugatory  for  equity  to  decree  a  partnership  which  the 
reluctant  partner  might  terminate  the  moment  after,  (w)  It  is 
easy,  however,  to  suppose  cases  wliere  a  person  had  made  arrange- 
ments with  a  view  to  a  partnership  distinctly  agreed  upon,  which 
would  now  bring  upon  him  great  loss  and  mischief,  if  that  part- 

(k)  Post,  §  205.  Thougli  the  court   decree    the  specific 

(/)   Buxton    V.    Lister,    3    Atk.    383  ;  perforuiance  of  an  agreement   to    let   the 

Anoiij'iiiou.s,  2  Ves.  Sen.  630  ;  Birchett  v.  plaintitf  into  a  trade,  it  seems,  it  will  not 

Boiling,  5  Munf.  442  ;  2  Story  Eij.  §  718;  direct  an  account   of  the  profits  from  the 

Adderly     v.    Dixon,    1    Sim.    &    S.    610,  time    the   plaintiff    ought   to   have   been 

611.     See  further   the  ojiinion  of  Wiiile,  admitted  ;   his   remedy,   in  that   resi)ect, 

J.,  Clark  V.  Flint,  22  Pick.  231,  239.  The  being  complete  at  law.  Anou.,  2  Ves.  Sen. 

specific  performance  of  an  agreement  for  a  630.     Sed  qu. 

I)artnership  may  be  enforced  by  compelling  (h)  In  Hercy  r.  Birch,  9  Yes.  357  ;  2 
the  parties  to  execute  the  proper  partner-  Hov.  Supp.  174,  Lord  Eldon  refused  to 
ship  deed.  Hibbert  v.  Hibbert,  Collyer  enforce  specifically  an  agreement  for  a 
on  Part.  §  203  ;  England  v.  Curling,  8  iiaitnership  without  limitation  of  time, 
Beav.  129.  So  a  court  of  equity  may  observing:  "No  one  ever  heard  of  this 
compel  a  partner  to  contribute  the  sum  court  executing  an  agreement  for  a  part- 
stipulated  as  capital,  or  to  restore  it  to  nership,  when  the  parties  might  dissolve 
the  common  fund,  if  he  have  withdrawn  it  immediately  afterwards."  It  has  been 
it  before  the  debts  are  paid.  P>obinson  said,  that  Lord  Eidon  was  not  quite  sat- 
V.  Mcintosh,  3  E.  D.  Smith,  221.  isfied  with  this  decision.  1  Madd.  Ch. 
(m)  See  cases  cited  in  last  note  ;  (3d  ed.)  525,  n.  1.  In  Buxton  v.  Lister, 
Anonymous,  1  Madd. Ch.  (3d  ed.)  525.  See  3  Atk.  383,  and  Anon.,  2  Ve.s.  Sen. 
Van  Sandnn  v.  Moore,  1  Russ.  441,  463 ;  ^29,  no  difference,  in  this  particular, 
Birchett  v.  Boiling,  5  Munf.  442  ;  Eng-  between  partnerships  for  a  term  and  those 
land  V.  Curling,  8  Beav.  129  ;  Manning  v.  without  limitation  of  time,  seems  to  have 
"Wadsworth,  4  Md.  59.  been  adverted  to, 

14 


210  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

iicrship  did  not  at  least  begin  to  be.  There  may  have  been  an 
actual  partncrsiiip  for  a  time,  and  then  one  of  the  partners  refuse 
to  consider  himself  partner  under  the  articles,  or  to  allow  them 
any  force,  to  the  great  detriment  of  the  other.  In  any  such  case, 
there  can  be  no  reason  why  a  court  of  equity  should  not  decree  a 
partnership.  And  we  ap[)rehend  that  a  partnershij)  might  tiius 
be  formed  by  order  of  court,  to  be  dissolved  at  once  at  the 
pleasure  of  one  party,  but  yet  substantial  justice  be  done  by 
clothing  the  parties  with  the  obligations  and  the  rights  which 
result  from  a  partnership,  however  brief  it  may  be.  (o)  If  it 
were  necessary,  we  know  not  why  equity  may  not  decree  a 
jiartnership  as  of  a  past  day,  if  justice  required  this,  by  the 
api)lication  of  that  familiar  principle,  that  equity  will  consider 
that  as  actually  done  which  certainly  ought  to  have  been  done. 

Another  general  objection  to  a  decree  that  certain  persons 
should  become  partners  is,  that  it  can  seldom  be  necessary. 
Damages  may  be  recovered  at  law  for  a  breach  of  the  contract,  in 
an  action  of  assumpsit,  which  is  itself  a  kind  of  equitable  action  ; 
and,  generally,  these  may  be  estimated  on  principles  which  would 
make  them  fully  compensative.  Indeed,  they  may  be  recovered 
at  law  in  some  cases  in  which  equity  would  refuse  a  specific  per- 
formance, on  the  ground  that  it  would  be  ineffective  and  use- 
less. (/?)  It  must  be  remembered,  however,  that  this  action  is  not 
maintainable  at  law,  unless  the  particulars  of  the  agreement  on 
the  one  hand,  and  of  the  breach  on  the  otiier,  can  be  distinctly 
proved,  (q)     If  the  agreement  is  under  seal,  then  covenant  will 


(o)  Mr.  Swanston,  in  his  note  to  Craw-  peiformance,  though  genei'allj'  not.    Scott 

shay  I'.  Maule,  1  Swanst.  513,  alhiding  to  v.  Eayment,  L.  R.  7  Eq.  112. 
the  distinction  taken    between  executory  A  court  of  equity,  in  some  cases,  may 

contracts  of  partnerships  to  last  for  a  term,  inhibit  a  partner  from  dissolving  the  firm, 

and  those  without  such  limitation  of  time,  Cliavany    v.    Van    Somnier,     cited    in    3 

with  reference  to   their  being  specifically  Wood.  Lee.  416,  n.  ;  also,  in  Crawshay  v. 

enforced,   remarks:       "This   distinction,  Maule,  1  Swanst.  511,  note  ;  Ranisbottom 

however,  must  be  received,  it  is  presumed,  v.  Parker,  6  Madd.  5. 
not  without  qualification.     In  many  such  (/>)  M'Neil    v.    Reid,    9    Bing.    68,    2 

cases,    though   the    partnership    could  be  Moore  &   S.  89.     See  Manning  v.  Wads- 

immediately  dissolved,  the  performance  of  worth,  4  Md.  59. 

the   agreement    (like   the   execution  of  a  (q)  Figes    v.     Cutler,     3    Stark.    139. 

lea.se  after  the  expiration  of  the  term,  see  Compare   this    with    M'Neil    v.    Reid,    9 

Wilkinson    v.   Torkiugton,   2  Y.   &    Col.  Bing.  68.  See  Gale  v.  Leckie,  2  Stark.  107, 

726)  might  be  important,  as  investing  the  108  ;  Vance  v.  Blair,  18  Ohio,  532.     It  is 

party  with  the  legal  rights  for  which  he  a  sufficient  consideration  for  a  promise  to 

had  contracted."     See  Downham  v.  Mat-  admit   a   stranger  into   a   firm,    that    the 

thews,  cited  in  1  Ves.  Sen.  497,  499.      If  latter  will   become   a    partner.     Byrtl   v. 

justice  require  it,  under   special   circum-  Fox,  8  Mo.  574, 
stances,  the  court  will  decree  a    specific 


§  164.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  211 

lie.  Here,  however,  as  appears  by  the  only  case  of  the  kind  that 
we  are  aware  of,  the  question  of  priority  of  covenants  and  priority 
of  breach  may  be  very  material.  P^or  if  the  plaintiff  has  failed 
to  do  something;  obli^'atory  on  his  i)art  and  tending  towards 
the  partnership,  this  may  furnish  an  adecjuate  excuse  to  the 
defendant,  (r) 

§  104.  Waiver  of  Provisions  in  the  Articles.  —  The  |)rovisions 
agreed  upon  by  the  pai-ties,  whether  orally  or  in  writing,  may  be 
waived  by  them,  or  modified  in  any  way  they  please.  And  courts 
of  equity  will  sometimes  imj^ly  such  waiver  or  modification  from 
facts.  Thus,  it  is  an  established  rule  that  provisions  in  the 
articles  which  the  partners  have  never  acted  upon,  but  for  a 
sufficiently  long  time  have  wholly  disregarded,  will  be  considered 
as  expunged,  (s)  If  there  is  only  silence  and  neglect  from  which 
to  infer  this,  tliey  must  be  long  continued,  and  such  as  not  to  be 
fairly  open  to  any  other  explanation  than  that  the  parties  under- 
stood the  provision  thus  disregarded  to  have  no  force.  If  the 
silence  or  non-observance  be  brief,  but  these  are  strengthened  l)y 
acts  of  the  |)artners  opposite  in  their  nature  and  effect  to  those 
provisions,  and  not  to  be  reconciled  with  any  regard  to  them,  the 
same  inference  will  be  made.  (0  It  is  equally  true  that  no  one 
partner  has  a  right  to  violate  the  provisions,  and  that  all  the 
partners  together  have  a  right  to  annul  or  amend  them.  And 
if  one  {lartner  violate  them  and  the  rest  follow  his  example,  or 
without  doing  the  same  thing,  approve  by  word  or  act  of  what  he 
docs,  or,  perhaps,  if  they  do  not  oj)pose  it,  here  would  be  evidence 
of  a  new  agreement.^ 

(r)  Walker   v.    Harris,    1    Anst.    245.  dos,  Barnard.  Cli.  419;    ante,  ^  161,  note 

See  1  Wnis.    Saiind.  320,  u.   4  ;  Glover  v-  (/). 

Tuck,   24   Wend.  153  ;    Morrow  v.   Saun-  (/)  In   Const  v.   Harris,   Turner  &  R. 

ders,  1  Br.  &  B.  318.  523,    Lord    Eldon    said;     "In    ordinary 

(.s)  Partners,   if   they  please,  may,   in  partnerships,  nothing  is  more  clear  than 

the  course   of   the   partnership,    come   to  this,  that  although  partners  enter  into  a 

any  new  arrangement,  for  the  purpose  of  written  agreement,  stating  the  terms  upon 

having  some  addition  or  alteration  in  the  which  the  joint  concern  is  to  be  carried 

terms  on  which  they  carry  on  business,  on,  yet,  if  there  be  a  long  course  of  deal- 

ju'ovided  those  additions  or  alterations  be  ing,  or  a  course  of  dealing  not  long,   but 

made  with  the  unanimous  concurrence  of  still  so  long  as  to  demonstrate  that  they 

all  the  jiartners.     England  v.   Curling,   8  have  all  agreed  to  change  the  terms  of  the 

Beav.  129,  132.     See  Solomon  v.  Solomon,  original  written  agreement,  they  may  be 

2    Ga.    18  ;    Lord    Eldon    in   Jackson    v.  held  to  have  changed  those  teruis  by  con- 

Sedgwick,  1   Swanst.  460,  469;    Boyd  i'.  duet."      Jackson  v.  Sedgwick,   1  Swanst. 

Mynatt,   4  Ala.  79.     See  Smith  v.  Chan-  460,    469.      See    McGraw   v.    Pulling,    1 

Freeman  Ch.  357,  371. 

1  Where  the  language  of  the  articles  is  ambiguous,  the  construction  jilaced  upon  it 
by  the  partners  themselves  as  shown  by  their  course  of  dealing  is  of  great,  if  not  of 


212  THE   LAW    OP   PARTNERSHIP.  [CH.    VII. 

On  one  point  the  courts  seem  to  construe  articles  quite  strictly ; 
and  that  is  in  relation  to  any  material  change  or  enlargement  of 
the  business ;  for  this  they  require  an  unanimous  consent.  We 
apprehend  that  no  courts  would  now  give  this  power  to  a  mere 
majority.  (?/) 

§  165.  Renewal  of  Partnership.  —  It  happens  quite  often  that  a 
partnershij),  limited  by  the  articles  to  a  certain  time,  continues 
after  that  time,  and  is  carried  on  by  the  same  parties  in  much  the 
same  way,  with  no  new  articles,  and  no  formal  notice  or  renewal 
of  the  old  ones.  The.  question  may  then  arise,  as  to  the  effect  of 
the  articles  upon  the  new  firm  under  these  circumstances.  The 
answer  must  depend  mainly  on  the  conduct  of  the  parties.  If 
they  go  on  precisely  as  before,  or  in  such  a  way  as  to  indicate  no 
intentional  departure  from  such  a  course,  the  provisions  of  the 
former  articles  would  be  held  to  be  those  of  the  present  partner- 
ship, excepting  such,  if  any  there  were,  as  were  plainly  inapplicable 
to  the  present  state  of  things,  (v)  On  the  other  hand,  if  the  firm 
varied  or  departed  from  these  provisions,  or  appeared  to  adopt 
new  ones,  they  would  be  considered  as  making,  so  far,  a  different 
bargain  from  the  old  ones.  It  siiould  be  noticed,  however,  that  a 
partnership,  silently  continued  upon  old  articles,  is  dissolvable 
at  the  will  of  either  partner,  although  those  articles  contain  a  dis- 
tinct limitation  of  time,  (w)     The  renewal  of  this  limitation  of 

(u)  Natusch  V.  Irving,  Gow  on   Part,  doctrine  on  this  point,  said:  "The  articles 

App.  398  ;    caite,  §  131.     Respecting  the  expired  by  their  own  limitation,  in  two 

rights  of  a  majority,  see  ante,  §  148.  years;  and  had  force  no  longer,  unless  the 

(v)  "  We  know,  that  after  the  expira-  parties  elected  to  continue  the  partnership 
tion  of  the  time  at  first  agreed  upon,  on  the  same  terms.  That  is  matter  of 
partnerships  frequentlj''  continue  witliout  evidence  upon  the  whole  facts.  The  nat- 
a  new  agreement ;  and  the  effect  of  that  ural  presumption  is,  that,  as  the  partner- 
is,  that  the  partners,  after  the  expiration  ship  was  continued  in  fact,  it  was 
of  the  partnership  term,  continuing  to  continued  on  the  same  terms  as  before, 
carry  on  the  trade  without  a  new  deed,  unless  that  presumption  is  rebutted  by 
all  the  old  covenants  are  infused  into  the  the  other  circumstances  in  the  case, 
new  series  of  transactions."  Per  Sir  An-  There  is  no  written  agreement  re.specting 
thony  Hart,  in  Booth  v.  Parks,  1  MoUoy,  the  extension  of  the  coi)artnershij),  and 
466 ;  Crawshay  v.  Collins,  15  Ves.  218,  therefore  it  is  open  for  incpiiry  upon  all 
228  ;  Bradley  v.  Chamberiin,  16  Vt.  613  ;  the  evidence." 

Mifflin    r.   Smith,    17  S.  &   R.  165.      In  (w)   Booth    v.   Park.s,    1   Molloy,  466; 

United  States  Bank  v.  Binney,  5  Mason,  Featherstonaugh  v.  Fenwick,  17  Ves.  298. 
176,   185,  Sir.  Justice  Story,  stating  the 

controlling,  weight.     Meguiar  v.   Helm,  (Ky.)  14  S.  W.  949;    "Winchester  r.  Glazier, 
152  Mass.  316,  25  N.  E.  728  ;  Rathbun  v.  McConnell,  27  Neb  239,  42  N.  W.  1042. 

A  modification  of  the  articles  may  be  shown  by  a  long  course  of  dealing  indicat- 
ing mutual  consent  to  the  change,  even  if  there  is  no  other  evidence.  Weeks  v. 
McCliutock,  50  Ark  193,  6  S.  \Y.  734  ;  McCall  v.  Moss,  112  111.  493.  As  by  entries 
in  the  books  of  the  firm,  to  which  all  partners  had  access.  Gregg  v.  Hord,  129  111. 
^13,  22  N.  E.  528  ;  Southmayd's  Appeal,  (Pa.)  8  Atl.  72. 


§   106.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  213 

time  would  seldom  be  presumed  from  acts,  or  sustained  by  the 
law  as  a  part  of  a  new  bargain,  on  any  thing  less  than  proof  that 
the  parties  had  expressly  so  agreed,  (x)  ^ 

The  articles  sometimes  provide  for  a  continuance  of  the  part- 
nership after  the  death  of  one  or  more  partners.  This  is  much 
more  common  in  England  than  here ;  but  is  not  unknown  here, 
and  such  provisions  may  give  rise  to  difficult  questions.  These, 
liowever,  we  shall  consider  when  we  treat  of  dissolution  by  the 
death  of  a  partner. 

§  166.  Provisions  for  Advances  by  a  Partner.  —  The  articles  of 
partnership  not  unrre([uently  contain  agreements  that  one  or  all 

{x)  Tlie  original  articles  of  a  copart-  coini>lainaiit's  resumption  of  his  duties  as 
nership  provided  that  it  should  last  seven  a  partner  on  the  original  terms  was  a 
years.  At  the  end  of  that  time,  the  de-  substantial  renewal  of  the  articles  on  his 
fendants,  wlio  resided  in  this  country,  part,  and  was  such  an  assent  to  the  writ- 
transmitted  to  the  complainant  in  London  ten  renewal  of  them  b}'  the  defendants  as 
(where  he  resided)  the  partnership  arti-  would  be  binding  on  him,  if  the  defend- 
cles,  with  an  indoi-senient  of  a  renewal  of  ants  had  insisted  upon  it.  Dickinson  v. 
them  for  another  term  of  seven  years,  to  Bold,  3  Desaus.  501.  The  written  articles 
commence  from  the  expiration  of  the  last,  of  partnership,  including  the  arbitration 
The  complainant,  in  his  answer  to  the  clause,  continue  in  force,  so  far  as  applic- 
defendants'  letter,  enclosing  the  renewal,  able,  when  the  partnership  is  continued 
said  that  he  would  agree  to  it  if  he  were  beyond  the  term  limited  by  the  articles, 
relieved  from  his  difficulties  on  the  arrival  Gillett  y.  Thomton,  L.  R.  19  Eq.  599; 
of  the  ship  "Carolina."  The  "Carolina"  Parsons  v.  Haywood,  31  Beav.  199.  But 
did  arrive,  and  both  complainant  and  de-  special  and  unusual  provisions  of  a  penal 
fendants  went  on  with  tlie  business  in  the  nature  will  not  be  considered  as  in  force 
same  manner  as  had  been  done  while  the  after  the  expiration  of  the  term.  Clark  v. 
original  articles  were  in  force.  But  Leach,  8  L.  T.  N.  s.  40.  A  stipulation, 
the  complainant  never  made  any  formal  in  partnership  articles,  that  neither  shall 
renewal  of  the  articles.  The  defendants  sell  his  interest  without  the  consent  of  the 
therefore  contended  that  the  partnership  others,  has  no  application  after  a  dissoln- 
which  continued  was  not  for  seven  years,  tion,  and  the  appointment  of  a  receiver, 
but  was  determinable  at  will.  The  court  Xoouan  .  McXab,  30  Wis.  277. 
held  otherwise,  and  considered  that  the 

1  Where  a  business  is  continued  after  the  time  for  which  the  partnership  was  formed 
has  elapsed,  it  is  presumed,  in  the  absence  of  circumstances  showing  a  different  ar- 
rangement, to  be  upon  the  old  terms.  Xeilson  v.  Mossend  Iron  Co.,  11  App.  Cas. 
298  ;  Cox  v.  Willoughby,  13  Ch.  D.  863  ;  Haynes  v.  Short,  88  Ala.  562,  7  So.  157  ; 
Sangston  v.  Hack,  52  Md.  173.  But  the  continuing  partnership  is  at  will,  and  such 
provisions  of  the  articles  as  are  inconsistent  with  a  partnership  at  will  cease  to  be  in 
force.  Neilson  v.  Mossend  Iron  Co.,  11  App.  Cas.  298  ;  Cox  v.  Willoughby,  13  Ch. 
D.  863.  So  where  one  of  the  articles  provided  for  dissolution  and  disposition  of  the 
assets  after  three  months'  notice  by  a  partner,  it  was  held  that  this  aiticle 
was  not  in  force  after  the  original  term  of  partnership,  and  the  partnership 
might  be  dissolved  at  will.  jS^eilson  v.  Jlossend  Iron  Co.,  11  App.  Cas.  298. 
Where  the  articles  provide  that  upon  the  death  of  a  partner  the  survivor  may  take 
the  business  on  payment  of  a  certain  sum  to  the  representatives  of  the  deceased,  the 
better  view  would  seem  to  be  that  the  provision,  not  being  inconsistent  with  a  part- 
nership at  will,  continues  in  force  after  the  expiration  of  the  limited  term  of  partner- 
ship.    Cox  V.  Willoughby,  13  Ch.  D.  863  ;  but  see  Yates  v.  Finn,  13  Ch,  D.  839. 


214  THE    LAW    OF    PARTNERSHIP.  [CH.  VII 

of  the  partners  should  pay  into  the  capital  stock  of  the  firm  cer- 
tain moneys,  at  certain  times  and  on  certain  terms.  Any  partner 
is  considered,  as  to  any  such  obligation,  merely  as  a  debtor  to  the 
lirm  ;  and  his  rights  and  his  responsibilities  are  the  same  with 
those  of  any  other  debtor,  {ij)  Tiiis  is  carried  so  far,  that,  where 
two  had  agreed  to  pay  large  sums,  through  a  considerable  period, 
to  one,  in  consideration  that  he  would  take  them  into  partnership, 
and  this  one  became  bankrupt  soon  and  before  most  of  the  sums 
were  paid,  it  was  held  that  his  assignees  were  entitled  to  those 
instalments.  (2)^  If,  however,  a  partner  owes  money  to  the  firm, 
on  any  ground,  he  may  refuse  to  pay  it  if  the  other  partners,  also 
owing  money  to  tlie  firm,  refuse  to  pay.  The  reason  of  this  is  sim])ly, 
that  the  first  partner  claims  in  substance  that  a  balance  is  due  to 
him,  or  would  be  due  if  all  the  partners  paid  the  charges  against 
them,  or  that  his  debt  would  be  diminished  ;  and,  where  such  a 
claim  is  made  in  good  faith,  he  cannot  be  compelled  to  pay,  unless 
they  pay.  {a) 

In  general,  where  a  sum  of  money  is  advanced  to  a  partner,  or 
a  partner  is  permitted  to  take  it  as  a  loan,  and  there  are  no 

(2/)  A  partner,  by  failing  to  contribute  89.    Per  the  Master  of  the  Rolls  :  "  In  al- 

liis  share  of   the  ]5artnership  fund,  does  most  all  partnerships,  a  loss  follows  the 

not  in  ordinary  cases  forfeit  the  interest  bankruptcy   of    any   of    the   partners  ;    a 

whicli  he  already  has  in  the  firm,  espe-  thousand  instances  must  have  occurred  of 

cially  if  no  extraordinary  emergency  re-  lossby  bankruptcy  in  circumstances  similar 

quire   the   payment.     Piatt   v.   Oliver,    3  to  the  jiresent,  yet  no  precedent  is  ]iro- 

IVIcLean,  27.     See  Patterson  v.  Ware,  10  duced  of  the  interposition  of  a  court  of 

Ala.  444  ;  Turnijiseed  v.  Goodwin,  9  Ala.  equity.     The  reason  is  evident.     The  loss 

372.      And  one   partner,   after   accepting  is  not  a  breach  of  the  contract,  but  a  con- 

the  money  and  services  of  another,  shall  tingency   subject    to   which    the    parties 

not,  when  called  upon  to  carry  out  the  purchased.      The  defendants   bought  the 

partnership,    be  permitted   to   deny   that  right  of  becoming  i)artners ;    they  became 

any  joint  interest  ever  existed,  because  the  partners  ;    the    partnership   ended   by  an 

other   partner   has    failed    to   furnish    as  event  by  which  it  was,  in  its  nature,  liable 

much  money  for  partnership  purposes  as  to  be  determined.  .   .  .   Upon  a  division, 

he  agreed  to.     Stein  ii.  Eobertson,  30  Ala.  the  whole  price  became,  according  to  tlni 

286.     The  means  which  partners  may  em-  terms  of  the  agreement,  dehitum  in  prccy 

ploy  to  enforce  their  rights,  when  any  one  senti,  although  solvendum  in  futuro.     \\\ 

partner  neglects  to  contribute  his  proper  equity,  as  well  as  at  law,  the  contract  has 

quota  to  the  joint  fund  and  the  launching  been    performed,    and   the    consideration 

of    the  partnership,  will  be  more  appro-  must  be  paid." 

priately  considered  when  we  treat  of  the  (a)    Foster   v.    Donald,  1    Jac.    &   W. 

remedies  of  partners  between  themselves.  252;    Eichardson  v.  Bank  of  England,   4 

Post,  §  191.  Myl.  &  C.  171. 

(z)  Akhurst  v.  Jackson,  1  Swanst.  85, 

1  Where  it  is  agreed  that  one  shall  pay  a  premium  to  another  upon  being  admitted 
into  partnership,  he  must  pay  the  ))remium  though  he  decides  not  to  enter  iuto  the 
partnership.     Bluck  v.  Capstick,  12  Ch.  D.  863. 


§  1*^'] 


IIIGHTS    AND    DUTIES    OF    PARTNEllS. 


215 


express  terms  a<]jreed  on,  his  profits  are  in  the  first  place  answer- 
able ;  and,  if  they  are  insullicieni,  his  share  of  the  stock  goes  to 
discliarge  tliis  balance  ;  and,  if  that  be  insufficient,  he  becomes  a 
personal  debtor  for  the  balance,  (b) 

§  167.  Provisions  as  to  Accounts.  —  The  articles  sometimes 
contain  provisions  as  to  the  accounts,  how  they  shall  be  kept,  or 
how  settled  ;  and  these  provisions  also  are  protected  by  law,  but 
only  so  far  as  justice  will  j^ermit.  (c)  Thus,  it  may  be  provided 
that  accounts  once  settled  shall  not  be  reopened  but  for  fraud 
discovered  ;  and  yet  a  material  error,  through  gross  negligence, 
would  undoubtedly  be  corrected  in  equity.  It  is  prudent  to  guard 
settled  accounts  from  too  easy  or  too  hasty  reconsideration ;  and 
not(jnly  will  the  courts  enforce  reasonable  provisions  made  for  this 
])ur|)osc,  but  equity  would  not  permit  settled  accounts  to  be 
reopened  without  good  and  certain  cause,  even  where  there  was 
no  such  provision,  (d)  On  the  other  hand,  if  it  be  agreed  that  no 
accounts  between  the  partners  which  have  once  been  closed  shall 
be  reopened  after  the  death  of  any  party  to  them,  it  is  clear  that 
equity  would  reopen  them  on  proof  of  fraud,  either  by  the  de- 
ceased partner  or  against  him.  (c )    The  articles  may  also  provide  a 


(b)  Crawshay  v.  Collins,  2  Russ.  3'J5, 
347,  per  Lord  Eldon. 

(c)  111  the  absence  of  special  stipula- 
tions, the  rule  is  that  the  accounts  must  be 
taken  in  the  usual  way.  Jackson  v.  Sedg- 
wick, 1  Swanst.  469.  The  duty  of  each  and 
all  of  the  partners  to  keep  proper  books  of 
account,  always  ready  for  inspection,  we 
have  already  considered.  We  have  also 
seen  that  partners  may  waive  any  of  the  pro- 
visions of  the  partnei'ship  det^d,  and  that 
they  may  do  this  not  only  by  express  agree- 
ment, but  by  conduct  in  opposition,  or 
without  regard  to,  the  articles.  The  doc- 
trine is  as  applicable  to  stipulations  re- 
specting the  joint  accounts,  the  mode  and 
time  of  balancing  them,  &i;. ,  as  to  any  othei'. 
Pettyt  V.  Janeson,  6  Muld.  146  ;  Jackson 
V.  Sedgwick,  1  Swanst.  460.  When  a  new 
partnership  is  formed,  for  the  purpose  of 
transferring  property  to  it,  so  that  it  can- 
not be  attached  by  the  creditors  of  a  former 
firm,  a  partner  in  the  new  (irm  may  main- 
tain a  bill  for  an  account,  notwithstanding 
one  of  the  objects  of  the  formntion  of  the 
firm  was  to  delay,  hinder,  and  defraud  cred- 
itors.    Harvey  v.   Varney,  98  Mass.   118. 

{d)  Gainsborough   v.   Stork,    Barnard. 


312.  See  Stoughton  v.  Lynch,  2  Johns. 
Ch.  218  ;  Roberts  v.  Totten,  13  Ark.  609. 
If  it  be  stipulated  that  one  partnei-  shall 
make  up  and  state  the  joint  accounts,  and 
he  do  so  in  the  absence  of  his  copartner, 
ex  parte,  it  is  the  duty  of  the  latter  to 
look  into  them  within  a  leasonable  time, 
and  to  point  out  the  errors,  if  any  exist ; 
or  he  will  be  considered  as  having  ac(pii- 
esced  in  the  correctness  of  the  accounts  as 
stated  on  the  books  of  the  firm.  In 
stating  the  accounts  of  partners,  as  be- 
tween themselves,  the  entries  on  the  part- 
nership books,  to  which  both  parties  have 
had  access  at  the  time  when  those  entries 
were  made,  or  immediately  afterwards,  are 
to  be  taken,  primd  facie,  as  correct;  subject, 
however,  to  the  right  of  either  party  to 
show  a  mistake  or  error  in  the  charge  or 
credit.  Heartt  v.  Corning,  3  Paige,  566, 
572.  And  see  Lynch  v.  Bitting,  6  Jones 
Eq.  238.     Post,  Ch.  xvi. 

(e)  By  articles  of  partnership,  it  was 
agreed  that  just  and  true  accounts  should 
be  made  out  half-yeaily,  and  signed  by 
the  partners  ;  and  that  such  accounts 
should  not  afterwards  be  called  in  ques- 
tion, except  for  errors  'discovered  in  the 


216 


THE    LAW    OP    PARTNERSHIP. 


[CH.    VII. 


method  of  closing  the  accounts  and  dividing  the  jiroperty  at  dis- 
solution. Tiiese  provisions,  however,  Avill  be  considered  when  we 
speak  of  the  dissolution  of  a  partnership. 

§  168.  Provisions  for  giving  Care  and  Skill  and  Time.  —  The 
general  law  of  partnership  requires  of  each  partner,  as  we  have 
already  seen,  due  devotion  of  his  time  and  care  to  the  concerns 
of  the  firm,  and  entire  absence  from  all  business  on  his  own 
account  which  can  interfere  with  this  duty  to  the  firm.  (/) 
Sometimes  the  articles  of  partnership  contain  provisions  on  this 
point ;  (^)  and  they  may  have  the  effect  of  enlarging  the  power 
of  a  partner  to  engage  in  other  and  independent  employments. 
For  if  they  provide  that  no  partner  shall  engage  in  this  or  that 
business,  specifying  them  particularly,  the  maxim,  that  the 
expression  of  one  thing  excludes  what  is  not  expressed,  might 
leave  each  partner  at  liberty  to  engage  in  other  branches  of  busi- 
ness not  enumerated,  (h)     But  this    would   not  be  pressed  too 


lifetime  of  all  the  partners.  The  accounts 
were  made  out  b)^  one  of  the  partners  ; 
and,  after  the  death  of  two  of  the  other 
partners,  it  was  discovered  that  the  ac- 
counts were  fraudulent.  It  was  held,  by 
Sir  Lancelot  Shadwell,  Vice-Chancellor, 
that  the  fourth  partner  wiis  entitled  to 
have  the  accounts  of.  the  partnership 
taken  from  the  date  of  the  articles. 
Oldaker  v.  Lavender,  6  Sim.  239.  See  North 
British  Bank  v.  Collins,  28  Eng.  L.  &  Eq.  7. 

(/)  American  Bank-Note  Co.  v.  Ed- 
son,  56  Barb.  84.  Where  there  are  no  cov- 
enants, a  man  may  engage  in  as  many  part- 
nerships as  he  pleases,  provided  he  does 
not  violate  the  principle  stated  in  the  text. 
Caldwell  v.  Lieber,  7  Paige,  483,  494,  per 
"Willard,  V.  C.  If  justice  require  it,  one 
partner  will  be  enjoined  from  engaging  in 
any  business  prejudicial  to  the  firm, 
whether  there  be  a  covenant  against  it  or 
not.  Marshall  v.  Johnson,  33  Ga.  500. 
The  right  of  a  partner  who  withdraws 
from  the  firm  to  engage  in  the  same  busi- 
ness which  the  remaining  partners  are 
prosecuting,  or  in  any  rival  or  hostile 
business,  will  be  considered  when  we  come 
to  treat  of  the  consequences  of  dissolution, 
and  therein  of  retiring  partners.  [And  see 
post,  §  181,  note.] 

{g)  "  In  partnership  engagements,  a 
covenant,  that  the  partners  shall  not  carry 
on  for  their  private  benefit  that  jiaiticular 
commercial   concern    in   which    they   are 


jointly  engaged,  is  not  only  permitted, 
but  is  the  constant  course."  Morris  v. 
Colman,  18  Ves.  438;  Universities  of 
Oxford  and  Cambridge  v.  Richardson,  6 
Ves.  706.  And,  in  such  case,  if  one  of 
the  partners  violate  this  covenant,  the 
rest  may  join  in  suing  him  for  the  breach  ; 
he  being  in  that  respect  several  from  them 
all,  and  they  all  joint  against  him.  Thim- 
blethoip  V.  Hardesty,  7  Mod.  116  ;  Eccle- 
ston  V.  Clipsham,  1  Saund.  153  ;  Spencer 
V.  Durant,  Comb.  115  ;  Saunders  v.  John- 
son, Skin.  401. 

(A)  In  Glassington  v.  Thwaites,  1  Sim. 
&  S.  132,  Sir  John  Leach  said:  "If  some 
of  the  proprietors  of  a  morning  paper  are 
also  the  proprietors  of  an  evening  paper, 
they  may  have  a  stronger  interest  to  pro- 
mote the  success  of  the  evening  ])aper 
than  of  the  morning  paper,  and  a  strong 
temptation  to  use  the  information  ob- 
tained at  the  expense  of  the  morning 
paper  for  the  benefit  of  the  evening  paper. 
This  temptation  forms  a  powerful  objec- 
tion in  all  cases  to  the  partner  in  the 
concern  of  one  newspaper  being  permitted 
to  be  a  partner  in  the  concern  of  any 
other  newspaper.  But  it  is  an  objection 
founded  on  the  principle  of  policy  and 
discretion,  against  which  parties  may 
protect  themselves  by  their  contracts  ; 
and,  accordingly,  it  is  a  common  cove- 
nant, in  such  partnership  articles,  that  no 
partner   shall    be   the   proprietor   of    any 


§  169.]  RIGHTS   AND    DUTIES    OF   PARTNERS.  217 

far.  No  such  maxim  or  principle  vrould  coiuitcrvail  the  general 
principle  requiring  good  faith  and  mutual  co-operation  between 
the  partners.  And,  therefore,  it  would  not  permit  a  partner  to 
injure  his  firm,  for  his  own  benefit,  by  allowing  any  mere  impli- 
cation to  give  him  power  to  do  so.  (i)  But,  on  the  other  hand, 
any  agreement  respecting  the  business  would  be  extended  by  con- 
struction far  enough  to  give  to  partners  the  protection  it  was 
intended  to  afford,  (j")  It  seems,  however,  that  an  agreement 
not  to  engage  in  the  same  business,  on  the  partner's  own  account, 
does  not  prevent  him  from  canvassing  for  future  business  when  he 
shall  be  by  himself,  (/c)  But  if  a  partner,  under  such  agreement, 
violate  it  by  engaging  in  independent  business,  equity  may  require 
of  him  to  admit  his  partners  as  partners  also  in  that  business,  (l) 
If,  however,  a  partner  under  such  agreement,  with  the  consent  of 
his  partners,  enters  into  or  forms  a  new  copartnership  for  the 
same  business,  this  will  not  make  the  partners  of  the  new  firm 
coj)artners  in  the  old  firm,  (w) 

§  169.  Provisions  for  a  Dissolution.  —  Equity  has  in  general  full 
power  to  decree  dissolution,  and  to  remove  a  copartner  for  suffi- 
cient reasons  ;  but,  if  this  subject  enters  into  the  articles,  ail 
provisions  respecting  it  —  as  to  the  cause,  the  time,  the  manner, 
and  consequences  —  will  be  respected,  so  far  as  they  do  not 
conflict  with  justice  ;  and  an  equitable  construction  will  be  given 
to  any  language   on  the    subject.  (»)  ^     Thus,  if   insolvency  be 

other  newspaper.      In   the   present   case,  art  or  mystery,  he  should  give  six  months' 

there  is  actually  a  covenant  that  the  pro-  notice   of    his    intention,   at   the   end   of 

prietors  will  not  be  concerned  in  any  other  which  the  other  party  should  be  at  liberty 

morning    paper,    which,    by    implication,  to  continue  the  trade  on  his  own  account," 

affords  the  conclusion  that  it  was  the  in-  it  was  held,  that  the  party  giving  notice 

tention   of   the   parties   that   they  might  could  not  carry  on  the  trade  elsewhere  on 

engage    in   the    concern   of    any   evening  his  own  account ;  but  that  he  must  either 

paper."      See   also   Caldwell   v.  Lieber,  7  continue  the  partnership,  or  give  up  such 

Paige,  483,  496.  tiade  altogether.      Cooper  v.  Watlington, 

(0  This  is  well  illustrated  by  the  case  2  Chitty,  451,  3  Doug.  413. 

from  which  we  have  just  quoted.     Glas-  {/c)  Coates  v.  Coates,  6  Madd.  287. 

sington  v.  Thwaites,  1  Sim.  &  S.  124.  (/)  Sonierville  v.  Mackay,  16  A'es.  382. 

(j)  Where   two  entered  into  partner-  See    Caldwell    v.    Lieber,    7    Paige,    482  ; 

ship    for   eleven   years,   in   the   trade    of  Moritz  v.  Peebles,  4  E.  D.  Smith,  135. 

brewers,  and  agreed  that,  "if  during  the  (m)  Bosanquet  v.  Wray,  6  Taunt.  597. 

term  either  should  desire  to  quit  the  said  («)  The  case  of  Blisset  v.  Dauiel,  11 

1  A  partner  may  institute  proceedings  to  enforce  a  provision  for  dissolution  in  the 
articles.  Meredith  v.  Ewing,  85  Ind.  410.  Where  the  articles  provided  for  ter 
mination  of  the  partnership  by  written  notice,  given  by  one  partner,  to  take  effect  in 
sixty  days,  and  one  partner  paid  to  the  other  a  bonus  for  admission  into  the  partner- 
ship, the  other  had  a  right  immediately  to  terminate  the  partnership  by  notice,  with- 
out cause.     Swift  v.  Ward,  80  la.  700,  45  N.  W.  1044. 


218 


THE    LAW    OF    PARTNERSHIP. 


[CH. 


VII. 


named  as  a  cause  for  which  a  partner  may  be  removed,  this  will 
be  held  to  mean  any  actual  inability  to  pay  one's  debts,  through 


Hare,  493,  expniplities  the  view  in  which 
courts  of  equity  regard  clauses  of  expul- 
sion in  deeds  of  coiiartner.ship,  and  the 
manner  in  which  such  jirovisioua  aie  con- 
strued, and  their  operation  controlled,  so 
as  to  prevent  their  workin<^  injustice  or 
0]>])ression.  The  firm  of  Jolin  Freeman  & 
Copper  Company  had  carried  on  a  very 
large  business  for  more  than  a  century, 
when,  in  1844,  the  then  partners,  includ- 
ing the  plaintiff,  Blisset,  and  six  other 
persons,  executed  new  articles,  though  in 
the  form  which  had  always  been  used  by 
the  ancient  firm.  By  these  articles  the 
firm  was  to  continue  fourteen  years  from 
the  30th  June,  1843.  The  joint  efl'ects 
were  estimated  at  72,000Z.,  the  whole  capi- 
tal being  jiut  at  112,500/.,  divided  into 
twenty-five  shares  of  4,500^.  each.  It  was 
provided  •  "  that  it  shall  be  lawful  for  the 
holders  of  two-thirds  or  more  of  the  shares 
for  the  time  being,  from  time  to  time  to 
expel  any  partner,  by  giving  to  or  leaving 
fur  him,  at  his  then  or  last  place  of  abode 
in  England  or  Wales,  a  notice  in  writing, 
under  their  hands,  of  such  expulsion  ; 
which,  in  that  event,  shall  operate  from 
and  at  the  time  of  the  giving  or  leaving 
such  notice."  Notice  of  the  dissolution 
of  the  firm  as  to  the  expelled  partner, 
drawn  in  a  jirescribed  manner,  and  signed 
by  the  remaining  partners,  was  to  be  pub- 
lished in  certain  papers. 

Under  these  articles  the  joint  business 
was  harmoniously  conducted  for  some 
years.  Finally,  at  a  meeting  of  the  then 
partners,  on  the  26th  August.  1850,  the 
plaintiff  had  a  dispute  with  Vaughan,  one 
of  the  defendants,  and  the  manager  of  the 
joint  business.  On  the  29th  August, 
at  their  usual  meeting,  all  the  partners 
signed  the  balance-sheet  of  the  30th  June 
tln'n  last.  On  the  evening  of  that  day, 
however,  the  plaintiff  received  a  notice 
that  he  was  expelled  from  the  firm,  drawn 
according  to  the  terms  of  the  paitnership 
deed ;  and  the  prescribed  notice  of  disso- 
lution was,  as  far  as  practicable,  published 
in  the  specified  pajiers.  The  plaintiff, 
however,  refused  to  sign  the  notice  of  dis- 
solution. Jt  farther  appeared  that  none 
of  the  partners,  except  Vaughan,  desired 


their  connection  with  the  plaintiff  to  cease, 
and  that  they  had  been  induced  to  sign 
the  notices  of  expulsion  and  dissolution 
by'  the  suggestions  and  arguments  of 
Vaughan,  and  his  threats  to  leave  the 
management  of  the  business  if  they  did 
not. 

Upon  these  facts  the  Vice-Chancellor 
(Sir  W.  P.  Wood)  said  that,  among  other- 
questions,  this  arose,  viz. :  Whether  the 
power  of  expulsion,  in  the  articles  of  part- 
nership, could  be  exercised,  without  any 
cause  assigned,  by  partners  holding  two- 
thirds  of  the  occupied  shares,  by  their 
signing  a  note  in  the  form  prescribed  by 
the  articles,  without  any  previous  meeting 
in  committee  with  each  other.  And  it 
was  held,  that  no  previous  meeting  of  the 
partners  was  necessary,  and  that  no  cause 
for  giving  the  notice  of  expulsion  was 
necessary  to  be  assigned  or  established. 

The  court  then  considered  the  ques- 
tion, Mhether,  assuming  this  power  of  ex- 
I)ulsion  to  exist,  it  had  been  so  exercised 
that  the  court  would  give  effect  to  it,  and 
declare  that  the  plaintifi'  had  ceased  to  be 
a  partner.  The  Vice-Chancellor  said  that 
all  the  partnership  stipulations  must  rest 
upon  a  basis  of  good  faitli  ;  that  the  jirin- 
ciples  of  good  faith,  as  applied  to  partner- 
ship, had  settled  that  a  partnership  cannot 
be  dissolved  by  any  jiartner  for  his  own 
benefit ;  that,  therefore,  the  literal  con- 
struction of  the  present  articles  could  not, 
in  all  cases,  be  enforced ;  that  the  power 
of  expulsion,  given  by  the  articles  in  the 
])resent  suit,  to  two-thirds  of  the  partners, 
was  never  created  with  the  view  that  it 
might  be  exercised  by  them  for  their  own 
private  benefit ;  that  it  was  inserted  m 
the  deed  to  be  used,  not  for  the  benefit  of 
the  two-thirds  exercising  the  power,  but 
on  behalf  of  the  whole  partnership.  Ap- 
plying these  principles  to  the  case  at  bar, 
his  Honor  held,  that,  considering  the  con- 
cealment from  the  plaintiff  of  any  in- 
tention on  the  part  of  the  partners  to 
act  on  the  clause  of  expulsion  until  after 
he  had  signed  the  annual  balance-sheet, 
and  in  view  of  the  fact  that  Vaughan 
had  procured  the  concurrence  of  the  other 
partners  to  the  expulsion,  for  his  own  ben- 


§  170.] 


RIGHTS   AND    DUTIES    OF    PARTNERS. 


219 


inadequacy  of  means,  and  not  be  limited  to  a  formal  insol- 
vency under  the  statute,  (o)  In  general,  however,  it  would  be 
held,  that  a  partner  should  not  be  liable  to  removal  for  the  first 
steps  towards,  or  imperfect  doing  of,  an  act  which  it  is  agreed 
shall  give  the  right  of  removal,  but  only  for  its  completion.  (/?) 

§170.  Provisions  for  Arbitration.  —  Not  unfrequentlv,  articles 
of  partnership  contain  a  clause,  that  all  disputes  between  the 
partners,  or  all  questions  arising  at  dissolution,  or  certain  other 
questions,  shall  be  submitted  to  arbitration.  (^)  But  the  same 
rule  will  doubtless  be  applied  to  this  provision  in  the  articles  as 
to  a  similar  one  in  policies  of  insurance,  or  indeed  any  other 
instrument.  Upon  this  subject,  the  law  was  settled,  somewhat 
suddenly,  but  decidedly,  in  England,  both  by  statute  (r)  and  by 
adjudication,  (s)  and  for  reasons  which  may  operate   upon   the 

efit,  and  by  the  use  of  threats,  and  bj'  tlie 
undue  exercise,  in  other  ways,  of  his  in- 
fluence upon  the  minds  of  his  cojiartncrs, 
there  being  no  proof  of  any  misconduct  on 
the  part  of  the  plaintiff,  the  power  of  ex- 
pulsion given  by  the  articles  had  not,  in 
the  present  instance,  been  exercised  bona 
fide. 

See,  also,  as  an  interesting  case  of  the 
expulsion  of  a  partner,  under  provisions  in 
the  articles  of  copartnership,  Patterson  v. 
Silliman,  28  Pa.  304. 

(o)  Parker  v.  Gossage,  2  C,  M.  &  R. 
617  ;  Biddlecombe  v.  Hand,  4  A.  &;  E. 
332. 

(^;)  By  articles  of  copartnership,  it  was 
provided,  that  it  should  be  lawful  for  the 
partners  to  dissolve  the  partnership  as  to 
any  partner  who  should  make  any  mort- 
gage, pledge,  sale,  assignment,  or  other 
disposition  of  his  share  of  the  jjartnership 
stock  and  effects,  or  who  should  become 
bankrupt  or  insolvent,  or  should  permit 
any  part  of  the  partnership  property  to  be 
taken  in  execution  for  his  separate  debt. 
It  was  held,  that  a  partner  was  not  de- 
barred, by  the  said  articles,  from  giving  a 
warrant  of  attorney,  and  that  it  was  only 
in  case  it  produced  a  certain  effect,  that 
his  coj)artners  were  empowered  to  deter- 
mine the  partnership.  Mills  v  Osborne, 
7  Sim.  37. 

(q)  Where  one  partner  gave  his  son  a 
power  of  attorney  "to  act  on  his  behalf 
in  dissolving  the  partnership,  with  author- 
ity to  appoint  any  other  person,  as  he 
might  see  fit,"  it  was  held,  that  this  gave 


the  son  power  to  submit  the  account  to 
arbitration.  Henley  v.  Soper,  8  B.  &  C. 
16.  Such  an  agreement  to  refer  will  be 
strictly  confined  to  the  special  matters  of 
reference.  De  Pusey  v.  Du  Pont,  1  Del. 
Ch.  82. 

(/■)  By  section  11th  of  the  Common- 
Law  Procedure  Act,  1854  (17  &  18  Vict, 
ch.  125),  if  the  parties  to  an  instrument, 
in  writing,  have  agreed  to  refer  to  arbitra- 
tion any  existing  or  future  differences  be- 
tween them,  a  court  or  judge  may,  at 
discretion,  upon  application  of  the  de- 
fesidants  or  any  of  them,  stay  proceedings 
in  an  action  commenced  by  any  of  the 
])arties,  against  any  or  all  the  rest,  in  re- 
spect of  the  matters  so  agreed  to  be  referred, 
if  there  is  no  sufficient  reason  why  such 
matters  should  not  be  referred  according 
to  the  agreement.  See  Russell  v.  Pelle- 
grini, 6  E.  &  B.  1020  ;  Wallis  v.  Hirsch, 

1  C.  B.  N.  .S..416.  It  is  to  be  observed, 
that  this  statute  does  not  have  the  effect 
of  making  a  covenant  to  refer  a  good  plea 
in  bar  in  an  action  at  law  upon  the  subject- 
matter  agreed  to  be  referred.  See  Liv- 
ingston V.  Ralli,  5  E.  &  B.  132. 

(.<f)  The  general  principle,  applicable  to 
provisions  of  this  character,  has  certainly 
been,  until  quite  recently,  that  no  mere 
agreement  to  refer  a  controversy  to  arbi- 
tration will  be  allowed  to  oust  the  proper 
courts  of  their  jurisdiction.  Thompson  v. 
Charnock,  8  T.  R.  139 ;  Con  tee  v.  Dawson, 

2  Bland,  264  ;  Hill  v.  Hollister,  1  Wilson, 
129.  See  Allegre  v.  Insurance  Company, 
6  H.  &  J.  413  ;  Eandel  v.  Chesapeake,  &c. 


220 


THE   LAW    OF   PARTNERSHIP. 


[CH,    VII. 


courts  of  this  country  when  the  question  shall  come  before  them 
hereafter.  If  the  parties  choose  to  agree  to  an  arbitration,  then 
questions  may  arise  as  to  the  effect  of  an  award  ;  and  these  will  be 
considered  in  a  subsequent  chapter. 

§  171.    Provisions  for  power  of  Majority.  —  The   general   powers 

Canal  Co.,  1  Harr.  (Del.)  233,  275  ;  Gray  Cas.  811,  per  Lord  Chancellor  Cranworth  ; 

V.  Wilson,  4  Watts,  39  ;  Stone  v.  Dennis,  Thompson  v.  Charnock,  8  T.  R.  139.     In 

3  Port.  231 ;  Thomas  v.  Freilericks,  10  Q.  Livingston  v.  Ralli,  supra,  Coleridge,  J., 
B.  775  ;  Haggart  w.  Morgan,  4  Sandt.  198  ;  said:  "We  should  be  ousting  the  court 
Frink  v.  Ryan,  4  Hi.  324.  Hence,  it  lias  of  its  jurisdiction  if,  where  a  party  corn- 
been  considered  very  doubtful  whether  an  plains  that  an  agreement  is  broken,  the 
action  would  lie  between  partners  for  the  defendant  was  allowed  to  answer :  '  You 
breach  of  a  covenant  to  refer  partnership  cannot  go  to  the  court,  because  it  is  an 
disputes  to  arbitration.  Tattersall  i-.  agi-eement  to  refer,  and  the  court  will  not 
Groote,  2  B.  &  P.  131  ;   Gray  v.  Wilson,  enforce  such  an  agreement.'     The  fallacy 

4  Watts,  41.  seems  to  be  in  confounding  the  distinction 

But  this  doubt  may  be  considered  as  to  between  an  action  for  refusing  to  concur  in 
a  great  extent  removed  (at  least  as  far  as  referring  a  difference,  and  an  action  upon 
tiie  English  courts  are  concerned)  by  a  the  subject  agreed  to  be  referred.  Setting 
decision  in  the  Court  of  Queen's  Bench,  up  an  agreement  to  refer,  as  a  defence,  is 
Livingston  v.  Ralli,  5  E.  &  B.  132.  Lord  very  diH'erent  in  effect  from  bringing  an 
Campbell,  C.  J.,  there  said  :  "  It  is  clear,  action  upon  the  subject  itself." 
on  principle,  that  an  action  will  lie  for  the  Another  reason  generally  given  why,  for 
breach  of  an  agreement  to  refer.  There  is  breach  of  covenant  to  refer,  no  action  can  lie 
an  express  promise,  and  abundant  consid-  maintained,  is  the  difficulty  of  directing  a 
eration  for  the  promise.  Such  an  action  juiy  how  to  assess  the  damages  ;  which  in 
is  not  contrary  to  any  principle  of  law  or  most  instances,  at  least,  wouid  necessarily 
to  public  policy  ;  it  is  most  reasonable  and  be  merely  nominal.  Tattersall  v.  Groote, 
just  that  parties  should  be  at  liberty  to  2  B.  &  P.  131;  Street  v.  Rigby,  6  Ves.  818; 
introduce  into  their  contract  a  stipulation  Mitchell  v.  Harris,  2  Ves.  Jun.  134.  "But 
that,  if  any  difference  arises,  it  should  be  that  is  not  a  reason  why  the  actios.  shoiil4 
referred  to  arbitration.  It  would  be  a  not  be  maintained ;  because,  though  the 
great  infringement  on  the  liberty  of  the  damages  may  not  be  substantial,  the  matter 
subject  if  he  were  not  to  be  permitted  in  question  may  be  very  important."  Cole- 
to  refer  a  question  to  a  domestic  tribu-  ridge,  J.,  in  Livingston  v.  Ralli,  s)q>ra.  It 
nal.  Then,  what  authority  is  there  to  seems,  moreover,  tiiat  this  objection  as  to 
the  contrary  ?  Lord  Eldon,  one  of  the  the  difficulty  of  calculating  the  damages 
greatest  of  judges,  seems  to  have  enter-  would  be  of  no  force  where  the  covenant 
tained  a  doubt,  though  I  do  not  find  any  to  refer  contained  a  clause  fixing  upon  a 
decision  by  him  upon  the  point.  But  certain  sum,  by  way  of  liquidated  damages 
since  I  have  known  W^estminster  Hall,  for  the  breach,  as  was  the  usual  course 
the  opinion  has  been  that  such  an  action  adopted  in  refei'ences  to  arbitration  under 
is  maintainable."  The  distinction  is  be-  the  civil  law.  2  Story  Eq.  §  1461.  Thus, 
tween  biinging  an  action  upon  the  agree-  in  Street  v.  Rigby,  6  Ves.  818,  Lord  Eldon 
ment  to  refer,  and  jdeading  that  agreement  said  :  "  There  are  prudential  ways  of  draw- 
in  bar  to  an  action  upon  tlie  subject  agreed  ing  these  articles.  There  might  have  been 
to  be  referred.  In  this  latter  case  (though  an  agreement  for  liquidated  damages  to 
not  in  the  former),  the  doctrine  applies,  enforce  a  specific  performance,  if  an  action 
that  the  courts  of  law  cannot  be  divested  could  not  produce  sufficient  damages,  or 
of  their  jurisdiction  by  an  agreement  to  equity  would  not  entertain  a  bill  for  a 
refer  ;  and  hence  such  a  plea  is  not  a  good  specific  performance."  Stone  i:  Dennis,  3 
I)lea  in  bar  to  the  action.  Wood  v.  The  Port.  239.  See  i7ifra,  §  174,  respecting 
Copper  Miners'  Co.,  17  C.  B.  561,  per  provisions  for  damages  in  partnership 
Williams,  J.;   Scott  v.  Avery,   5   H.   L.  articles. 


§  172.]  RIGHTS    AND    DUTIES    OF   PARTNERS.  221 

of  a  majority  of  the  partners  we  have  already  considered.  If  the 
articles  give  to  a  majority  a  power  to  bind  the  rest,  this  power 
may  be  protected  so  far  as  it  is  expressed,  but  will  not  be 
extended  by  implication  or  construction.  It  is  necessarily  con- 
fined to  matters  which  occur  in  the  conduct  of  the  partnership 
business  or  interests,  (i)  A  majority  acting  under  such  articles 
may  have  no  power,  in  case  of  difficulties,  to  sell  out  the  whole 
concern,  against  the  will  of  the  minority.  (i<)  But,  in  accord- 
ance with  principles  which  we  have  already  considered,  the 
parties  may,  by  long-continued  acquiescence  and  recognition, 
justify  a  court  of  equity  in  sustaining  a  course  of  conduct  on  the 
part  of  the  majority  not  authorized  by  the  articles,  and  even 
perhaj)s  prohibited  by  them,  (y) 

§  172.  Provisions  for  Division  of  Profits. —  Very  frequently  the 
articles  provide  for  the  division  of  profits,  and  determine  the 
proportion  in  which  each  partner  takes  his  share.  There  is 
nothing  to  prevent  their  making  any  bargain  on  this  subject 
that  they  see  fit  to  make.  Where  they  make  none,  it  is  certainly 
the  general  rule,  both  in  law  and  equity,  that  the  profits  shall  be 
shared  equally  among  the  partners,  (^w')  But  where,  from  ine- 
quality of  shares  in  the  concern,  or  of  contribution  to  it,  coupled 
with  other  circumstances  of  a  similar  indication,  it  must  be 
obvious  that  a  different  distribution  was  expected  and  intended, 
a  court  of  equity  might  be  expected  so  to  order,  (x)  ^ 

(t)  Glassington  v.  Thwaites,  1  Sim.  &  {ic)  Robinson   v.  Anderson,   20  Beav. 

S.  131.  98,   7   De  G.  M.  &  G.   239  ;   Webster  v. 

(it)  Hence,  where  a  partnership  existed  Bray,  7  Hare,  159.     See  Gill  v.  Geyer,  15 

among  a  large  number  of  persons  in  certain  Ohio,  399. 

newspapers,  under  an  agreement  that  it  {x)   "  Whenever  a   partnership  adopts 

.should  be  managed  by  a  committee  of  five,  a  project,  within  the  princi[)les  of  their 

and   by  general   meetings,   at  whit-h   the  agreement,  for   the  purpose    of  profit,  it 

vote  of  the  majority  was  to  be   binding,  must  be  for  the  benefit  of  all  the  partners, 

with  a  provision  that  any  one  wishing  to  in  proportion  to  their  respective  interests 

retire   should  first  offer  his  share  to  the  in    the   concern."     Per  Sedgwick,    J.,  in 

committee  at  a  certain  price,  and,  if  they  Gray   v.    Portland    Bank,    3    Mass.    364. 

declined  to  buy,  might  sell  it  to  any  other  There  a  banking  company  had  been  in- 

)}erson,  —  it  was  held,  that  the  majority  corporated  with  the  privilege  of  creating 

were  not  able  to  sell  the  whole  concern  a  stock  not  less  than  one  sum,  nor  greater 

without  the  consent  of  all ;  but  that,  where  than  another.     The  company  oonmienced 

all  but  two  were  desirous  of  retiring,  they  business  with  the  smaller  capital,  but  af- 

might  sell  their  own  shares,  without  mak-  terwards  voted  to  increase  it  to  the  largest, 

ing   an   offer  of  them  to  the  committee.  It  was  held,  that  those  who  held  the  stock 

Chappie  V.  Cadell,  Jac.  537.  in  the  capital  first  raised  had  a  right  to 

(«)  Glassington  v.  Thwaites,  1  Sim.  &  subscribe  for  and  hold  the  new  stock  in 

S.  124,  131.  proportion  to  their  respective  shares  in  the 

1  Provision  relnfinq  to  divisio'ii  of  profits.  —  Profits  of  a  business  consist  of  the  excess 
of  income  over  ordinary  expenditure.     An  investment  for  the  permanent  improvement 


222  THE   LAW   OF    PARTNERSHIP.  [CH.    VII, 

5  173.  Sharing  of  Loss.  — Thus,  if  it  was  provided  that  one 
should  find  all  the  money,  and  the  other  do  all  the  work,  and 
that  the  profits  should  be  divided,  and  the  transaction  resulted 
in  no  profit  whatever,  but  in  a  considerable  loss,  —  it  seems 
formerly  to  have  been  held  that  the  party  supplying  funds  would 
be  obliged  to  sustain  the  whole  of  this  loss;  he  could  not  call 
on  the  other  party  to  contribute  to  him  any  portion  of  it ;  for, 
as  between  themselves,  they  were  partners  only  as  to  profits, 
although  the  person  buying  and  selling  might  have  been  liable 
in  solido,  as  a  partner,  for  the  debts  incurred  by  the  purchase, 
or  for  the  transport  or  sale  of  the  merchandise,  (m) 

[The  better  view,  however,  is  that  although  all  or  a  large  part 
of  the  capital  is  furnished  by  one  partner,  the  entire  loss  is  to  be 
borne  by  all.  Hence  after  payment  of  the  debts,  the  contribu- 
tions of  partners  to  capital  are  all  to  be  repaid  before  there  can 
be  any  division  of  profits.  ^     And  if  the  assets  are  not  sufficient, 

old.     See  Raymond  v.  Putnam,  44  N.  H.  Bosw.  507  ;  Nevvbrau  v.  Snider,  1  W.  Va. 

160.  153 ;    Lamb  v.    Grover,    47    Barb.    317  , 

(//()  Huran   v.   Hall,   1    B.    Mon.    159.  Miller    .  Price,  20  Wis.  117. 
See  Irving  v.   Excelsior  Fire  Ins.    Co.,   1 

of  the  firm  property  is  not  ordinary  expenditure,  and  is  not  to  be  subtracted  from 
income  in  order  to  arrive  at  profit.  It  was  so  held,  where  one  was  to  be  paid  by  a 
})roportion  of  the  profits.  Braun's  Appeal,  105  Pa.  414.  See  Succession  of  Harris,  39 
La."  Ann.  443,  2  So.  39. 

In  the  absence  of  any  provision  in  the  articles  or  other  agreement,  the  partners  will 
be  presumed  to  share  the  profits  and  losses  equally.  Paul  v.  Cullum,  132  U.  S.  539  ; 
Brewer  v.  Browne,  68  Ala.  210  ;  Ligare  v.  Peacock,  109  111.  94  ;  Fleischmann  v.  Gotts- 
chalk,  70  Md.  523,  17  Atl.  384  ;  Ratzer  v.  Ratzer,  28  N.  ,J.  Eq.  136.  And  if  there  is 
no  stipulation  as  to  losses,  it  is  jiresumed  that  they  will  be  divided.  Burgess  v.  Bad- 
ger, 124  111.  288,  14  N.  E.  850.  But  there  is  nothing  to  })revent  the  parties  from  making 
such  arrangements  as  they  please  with  regard  to  sharing  profit  and  loss.  Paul  v.  Cullum, 
132  U.  S.  539  ;  Welsh  v.  Canfield,  60  Md.  460  ;  Fleischmann  v.  Gottschalk,  70  Md. 
523,  17  Atl.  384. 

Where  the  articles  provided  that  "  in  the  event  of  the  net  profits  of  the  business  in 
any  one  year  being  so  small  that  the  portion  of  said  T.  W.  &  J.  A.  should  not  amount 
to  S2500  exclusive  of  the  interest  on  their  unpaid  capital,  that  then  it  is  agreed  that 
their  accounts  shall  each  be  credited  a  sum  sufficient  to  make  that  amount,  unless  such 
deficit  should  occur  from  losses  sustained  by  fire,  robbery,  or  other  causes  outside  of  the 
regular,  ordinary  business  of  the  copartnership,"  it  was  held  that  the  share  of  T.  W. 
was  to  made  up  to  be  $2500  profit  every  year  by  making  the  necessary  credits  on  the 
books  of  the  firm,  even  if  there  was  an  actual  loss.     Welsh  v.  Canfield,  60  Md.  469. 

In  Fulmer's  Appeal,  90  Pa.  143,  it  appeared  that  profits  were  to  be  divided  according 
to  the  capital  actually  paid  in.  Capital  was  to  be  equal  and  to  be  paid  in  as  needed.  Tlie 
managing  partner  refused  to  let  the  other  partner  see  the  books,  or  to  inform  him  how 
their  capital  accounts  stood.  The  other  demanded  to  know,  in  order  to  equalize  pay- 
ments. It  was  held  that  since  there  was  no  wilful  default  in  the  latter,  he  could 
have  an  equal  division  of  the  profits. 

^  Nowell  V.  Nowell,  L.  R.  7  Fq.  538;  Binney  v.  Mutrie,  12  App.  Cas.  160; 
Sangston  v.  Hack,   52   Md.  173  ;   Whitcomb  v.  Converse,   119  Mass.  38  ;    Living- 


§  174.]  RIGHTS    AND    DUTIES    OF   PARTNERS.  223 

after  paying  the  debts,  to  repay  the  capital,  the  deficit  must  be 
shared  by  all  the  partners  ,  and  the  partner  who  has  contributed 
more  than  his  share  of  capital  is  therefore  entitled  to  contribu- 
tion from  the  rest.^] 

§  174.  Liquidate  Damages  for  Misconduct  of  Partner.  —  Some- 
times the  articles  provide  that  for  some  specified  misconduct,  or 
breach  of  agreement,  the  offending  partner  shall  pay  a  certain 
defined  sum,  by  way  of  liquidated  damages.  And  this  may  bring 
up  questions  which  belong  not  so  much  to  the  law  of  partner- 
ship as  to  the  law  of  contracts.  Whatsoever  is,  in  fact,  a  penalty 
for  wrong-doing,  or  default  of  any  kind,  whether  it  be  called 
penalty  or  anything  else,  is,  both  in  law  and  in  equity,  cut  down 
to  an  adequacy  with  the  wrong  done,  so  that  it  shall  afford  full 
compensation,  and  nothing  more.  At  the  same  time,  there  may 
be  wrongs  anticipated,  or  at  least  provided  for,  of  which  it  is  diffi- 
cult or  impossible  to  determine,  even  when  they  occur,  with  any 
exactness,  the  amount  of  damage  they  cause.  In  such  a  case, 
parties  may  agree  beforehand  as  to  what  shall  be  taken  for  the 
amount  of  damages,  if  that  thing  happens.  This  is  to  agree 
upon  liquidated  damages  ;  and  in  such  a  case  courts  will  sup- 
port the  agreement,  provided  it  is  made  in  good  faith,  is  reasonable 
and  not  oppressive  in  its  nature,  and  the  damages  are  not,  in 
point  of  fact,  excessive,  or  out  of  all  due  proportion  to  the  dam- 
age actually  sustained,  (^)  If,  however,  liquidated  damages  are 
agreed  on  even  under  that  name,  and  the  default  to  which  they 
apply  causes  damages  of  an  exact  amount,  or  of  an  amount  which 
can  be  exactly  ascertained,  the  courts  will  often  disregard  the 
agreement,  and,  in  some  form,  give  only  adequate  compensation. (^) 

(?/)  See  the  principles  upon  this  sub-  Eemhle  v.  Farren,  6  Ring.  141  ;  Boys  v. 
ject  stated,  and  the  cases  collected,  in  3  Ancell,  7  Scott,  364 ;  Heard  v.  Bowers,  23 
Pars,  on  Cont.  156-163,  5th  ed.  [See  1  Pick.  455,  462  ;  Grayi-.  Crosby,  18  Johns. 
Sedg.  Dam.  (Sth  ed.)  §  389  ct  seq.]  219,  226  ;  Hoag  v.    McGinuis,"  22  Wend. 

{z)  Orry.  Churchill,  1  H.  Bl.  227,  232  ;  163  ,  Bagley  v.  Peddie,  5  Sandf.  192  ;  Ses- 
sion V.  Blanchard,  130  Mass.  341  ;  Hayes  v.  Hayes,  (X.  H.)  19  Atl.  571  ;  Leserman 
V  Bernheimer,  113  N.  Y.  39,  20  N.  E.  869  ;  Shea  i'.  Donahue,  15  Lea,  160.  So  where 
land  was  bought  with  A.'s  money  and  sold  by  B.'s  skill,  the  profits  to  be  divided,  it 
was  held  that  there  were  no  profits  to  divide  until  enough  land  had  been  sold  to  repay 
A.'s  contribution  and  all  e.^penses.       Coward  v.  Clanton,  79  Cal.  23,  21  Pac.  359. 

1  Hellebush  v.  Coughlin,  37  F.  R.  294  ;  Turner  v  Turner,  (Ky.)  5  S.  \V.  457  ; 
Jones  V.  Butler,  87  N.  Y.  613  ;  Emerick  v.  Moir,  124  Pa.  498,  17  Atl.  1  ;  Wipperman 
V.  Stacy,  80  Wis.  345,  50  X.  W.  336.  But  where  the  advances  of  a  partner  were  to  be 
repaid  by  a  greater  share  of  the  profits,  which  were  to  be  equally  shared  after  the 
advances  had  been  repaid,  it  was  held,  upon  dissolution  before  entire  repayment  of  the 
advances,  that  the  copartner  was  not  bound  to  share  the  loss.  McCormick  v.  Stofer, 
(Ky.)  12  S.  W   151. 


224  THE   LAW    OF   PARTNERSHIP.  [CH.    VII. 

If  the  pgreement  be  one  which,  in  fact  and  substance,  deter- 
mines beforehand  damages  for  a  default,  of  that  kind  that  these 
damages  ought  to  be  so  liquidated ;  and  if,  on  the  other  hand, 
the  sum  is  a  reasonable  one,  —  the  court  will  sustain  it  as  liqui- 
dated damages,  even  though  these  damages  are  called  a  penalty, 
or  by  no  name  whatever,  (a)  So,  at  least,  a  court  of  equity 
would  decide.  (6)  And  if  courts  of  law  were  constrained  to 
treat  as  a  penalty  what  the  parties  so  called,  the  effect  would 
be  the  same ;  because  this  penalty  would  need  no  cutting  down 
to  make  it  adequate. 

There  is  one  rule  on  the  subject  of  liquidated  damages  appli- 
cable to  articles  of  partnership,  and  to  all  other  contracts.  No 
one  bargain  for  liquidated  damages  is  enforced  by  the  courts, 
unless  the  damages  agreed  upon  are  for  one  distinct  breach  only ; 
or,  if  for  many,  are  payable  only  when  all  these  breaches  are  com- 
mitted, and  they  are  such  that  the  actual  amount  of  damages 
thence  resulting  cannot  be  ascertained.  If,  for  example,  the 
articles  enumerate  many  duties  and  many  agreements,  and  it  is 
agreed  that,  for  any  breach  thereof,  the  olTending  party  shall  pay 
a  certain  sum  of  money,  such  a  bargain  would  seldom  or  never  be 
enforced.  It  puts  all  the  breaches  on  the  same  footing;  it  puts 
a  breach  of  all  on  the  same  footing  as  a  breach  of  any  one  ;  and 
it  brings  together  broaches  of  which  some  may  cause  damages 
as  ascertainable  as  the  withholding  a  certain  debt,  while  some 
are  as  incapable  of  exact  estimate  as  the  violation  of  a  general 
promise  of  good  conduct,  (c) 

sions  u.  Eichmond,  1  E.  I.  298,  303  ;  to  be  decided  by  the  judge  upon  a  con- 
Jordan  V.  Lewis,  2  Stew.  426  ;  JVlead  v.  sideration  of  the  whole  instrument."  Per 
Wheeler,  13  N.  H.  353.  Wilde,  C.  J.,  in  Sainter  v.  Ferguson,  7  C. 

(a)  See  Lowe  r.  Peers,  4  Burr.  2225  ;  B.  727. 
Tarrant  v.  Olniius,  3  B.  &  Aid.  692  ;  (6)  If  liquidated  damages  are  legally 
Fletcher  v.  Dyehe,  2  T.  R.  32,  36  ;  Birch  due,  equity  will  not  relieve  against  them. 
V.  Stephenson,  3  Taunt.  469  ;  Denton  v.  East  India  Co.  v.  Blake,  Finch,  117  ; 
Eichmond,  1  Cr.  &  M.  734  ;  Duckworth  Small  v.  Fitzwilliams,  Free.  Ch.  102  ; 
V.  Alison,  1  M.  &  W.  412  ;  Leighton  v.  Eolfe  v.  Peterson,  2  Bro.  P.  C.  436  (Dub- 
Wales,  3  M.  &  W.  545  ;  Crisdee  v.  Bolton,  lin  ed.)  ;  6  Bro.  P.  C.  470.  And  if  a 
3  C.  &  P.  239  ;  Legge  v.  Harlock,  12  Q.  lessee  of  land  covenant  that  he  will  not 
B.  1015  ;  Price  i-.  Green,  16  M.  &  W.  plough  a  certain  part  of  it,  and  that,  if 
346  ;  Galswoi'thy  v.  Strutt,  1  Exch.  659  ;  he  do  so,  he  will  pay  a  certain  sum  per 
Dakin  v.  Williams,  17  Wend.  447,  22  acre,  e(|uity  will  neither  enjoin  the  coven- 
Wend.  201  ;  Pearson  v.  Williams,  26  antor  from  violating  his  covenant,  nor 
Wend.  630  ;  Heard  i'.  Bowers,  23  Pick,  relieve  him  from  the  agreed  penalty,  if  he 
455,  463;  Mead  y.  Wheeler,  13  X.  H.  351.  do  violate  it.  Woodward  v.  Gyles,  2 
"Whether    the    sum    mentioned    in   an  Vern.  119. 

agreement  to  be  paid  for  breach  is  to  be  (c)  Astley  v.  Weldon,  2  B.  &  P.  346  ; 
treated  as  a  penalty,  or  as  liquidated  and  Kemble  r.  Farren,  6  Bing.  141  ;  Char- 
ascertained  damages,  is  a  question  of  law,  rington  v.  Laing,   6  Bing.  242  ;    Boys  v. 


§  175.]  RIGHTS    AND    DUTIES    OF   PARTNERS.  225 

§  175.  Provisions  for  Appropriations  of  Property  to  a  Partner.  — 
If  the  partners  choose  to  agree  that  certain  items  of  property 
used  by  the  firm,  as  the  house  or  store  occupied  by  them,  or  the 
fixtures,  or  implements,  or  other  chattels  which  are  not  for  sale 
or  use,  or  even  certain  specified  parts  or  portions  of  the  goods 
or  merchandise  bought  and  sold,  shall  not  belong  to  the  com- 
mon stock,  but  be  owned  by  one  or  more  of  the  partners,  or  by 
the  whole  of  them,  in  severalty,  —  there  is  nothing  to  prevent 
such  a  bargain,  and  nothing  to  interfere  with  its  force  or  oper- 
ation among  the  partners  themselves,  (t^)  ^  The  agreement 
might  give  rise  to  conflicting  rights,  and  to  difficult  questions 
of  fact ;  but  there  is  no  rule  which  ])revents  their  making-  it. 
When,  however,  such  a  bargain  is  considered  with  reference  to 
the  creditors  of  the  firm,  a  different  state  of  tilings  arises.  In 
case  of  the  insolvency  of  such  a  firm,  or  of  any  firm,  there  are 
usually  two  classes  of  creditors  ;  those  to  whom  the  copartnership, 
as  such,  is  indebted;  and  tiiose  to  whom  the  several  partners, 
or  some  of  them,  are  indebted.  We  shall  presently  see  that,  by 
an  universal  rule,  founded  on  obvious  justice,  the  creditors  of 
the  firm  are  exclusively  entitled  to  all  the  assets  of  the  firm,  until 
tlicir  debts  are  paid,  and  that  the  law  is  tending  to  give  the 
creditors  of  the  separate  partners  an  equally  exclusive  right  to 
the  separate  or  private  property  of  the  indebted  partner.  Now, 
can  the  respective  rights  of  these  classes  of  creditors  be  made 
dependent  upon  the  pleasure  or  the  bargains  of  the  partnership  ? 
To  a  certain  extent,  this  may  be  so;  but  it  is  not  easy  to  draw 
the  line  exactly,  and  say  where  the  power  of  the  partners,  in  this 
respect,  terminates.     If  by  the  original  articles,  or  by  any  sub- 

Ancell,  7  Scott,  364  ;  Davies  v.  Penton,  6  them,  see  3  Pars,  on  Cont.  157,  159,  and 

B.  &  C.  216  ;  Galsworthy  v.  Strutt,  1  Exch.  notes,  5tli  ed. 

659  ;   Atkyns  v.  Kinnier,   4   Exch.    776  ;  (c?)  We   have   ah-eady    seen    that    the 

Shute    V.    Taylor,     5     Met.    67;    Bagley  contribution  of  one  partner  to  the  common 

V.  Pedtlie,  5  Sandf.  192  ;    Beale  v.  Hayes,  stock,  or  even  the  contributions  of  all  the 

f.  Saiiilf.   640  ;  Gower    v.   Saltmarsh,    11  partners,   and  thus  the  entire    capital  of 

Mo.  271  ;    Carpenter  i?.  Lockhart,  1    Ind.  the  partnership,  may  consist  exclusively  of 

434  ;    Bright  v.  Rowland,  3  How.  (Miss.)  the  use  of  property.    The  questions  which 

398  ;    Gheddick  v.   Marsh,  1   N.  J.   463  ;  arise  upon    the    retirement,  bankruptcy, 

Curry  v.  Larer,  7  Barr,  470.     See  particu-  &c.,  of  partners  respecting  the  transmu- 

larly    Galsworthy   v.    Strutt,    Atkyns    v.  tation  or  conversion  of  joint  property  into 

Kinnier,  and  Bagley  v.  Peddie,  supra,  as  separate  property,  and  vice  versa,  will    be 

cases  well  exhibiting  the  modern  English  considered,  hereafter,  when  we  treat  of  the 

and  American   doctrines  on  this  subject  ;  dissolution  of  a  firm  by  those  means, 
and  for  the   dilfereuce,   if   any,    between 

^  Where  one  pai'tner  is  to  have  the  exclusive  possession  of  firm  property,  he  may 
maintain  a  possessory  action  "against  another  partner  who  takes  it.  Ivey  v.  Ham- 
mock, 68  Ga.  428. 

15 


226  THE    LAW   OF   PARTNERSHIP.  [CH.    VII. 

sequent  agreement,  three  men  who  enter  into  partnership,  and 
transact  business  as  A.,  B.,  &  Co.,  contract  with  each  that  no 
part  of  their  merchandise  shall  be  or  form  a  part  of  the  common 
property  of  the  firm,  but  that  each  partner  shall  own  in  severalty 
onc-thii-d  part  of  everything  bought,  and  one-third  of  the  pro- 
ceeds of  every  thing  sold;  and  if  this  firm  should  become 
insolvent,  and  the  several  and  private  creditors  claim  all  the 
merchandise  of  the  firm  as  liable  to  their  processes  under  this 
contract,  leaving  nothing  for  the  creditors  of  the  firm,  —  no 
court  would  ever  look  with  favor  on  such  a  claim.  This  is  so 
obvious,  that  precisely  this  arrangement  probably  never  was 
made,  nor  will  bo.  But  if,  on  the  other  hand,  the  partners 
agree  that  the  house  which  one  of  them  owns,  and  the  whole 
firm  use,  shall  remain  the  property  of  that  one  partner ;  or  if 
they  agree  that  this  piece  of  property  bought  and  paid  for  by  the 
firm,  and  used  by  them,  shall  belong  to  one  partner  alone,  and 
be  charged  to  him,  and  that  piece  of  property  to  another,  —  such 
arrangements,  made  in  good  faith,  and  when  no  insolvency  was 
apprehended,  and  in  themselves  reasonable,  would  be  sustaiued 
by  the  courts.  But  they  would  hesitate  to  go  farther.  It  is 
said  by  Justice  Story,  that  "In  partnership  articles  it  is  some- 
times agreed  that  the  real  estate  and  fixtures  belonging  to  the 
firm  shall  not  be  treated  as  partnership  property,  as  between 
the  partners  ;  but  that  all  the  partners  shall  have  a  several  and 
individual  interest  therein.  In  such  cases,  the  interests  of  the 
partners  will  be  treated  throughout  as  their  several  and  separate 
estate ;  and,  of  course,  in  cases  of  bankruptcy  of  the  partners,  it 
will  be  distributable  to  and  among  their  separate  creditors 
respectively,  in  preference  to  their  joint  creditors."  (e)  A 
similar  statement  is  made  by  Collyer.  (/)  The  authorities 
cited  go  no  farther  than  that  real  property,  bought  and  paid 
for  from  the  partnership  funds,  may  be  appropriated  to  one 
partner,  and  the  price  charged  to  him,  and  that  a  subsequent 
insolvency  of  the  firm  will  not  divest  his  separate  title  ;  or  that 
real  property,  originally  owned  and  held  by  one  partner  alone, 
may  be,  by  agreement,  used  by  the  partnership,  without  becom- 
ing j)artnership  property.  (^)  But  we  apprehend  that  the 
practical  rule  now  would  be,  certainly  in  England,  and  probably 

(«)  Story  on  Part.  §  205.  ogous  cases  at  large  when  we  come  to  treat 

(/)  Collyer  on  Fart.  §  217.  of  the  real  estate  of  a  firm,  and   of  the 

(g)  Smith  v.  Smith,  5  Ves.  189  ;  Ex  rights  of  joint  and  separate  creditors  upon 

parte  Smith,  3  Madd.  63.     We  shall  have  the  dissolution  of   a  firm  by  banki'uptcy. 

occasion  to  consider  these  and  other  anal-  {S^ie  post,  ch.  11,  and  ch.  15,  sect.  4.) 


§  176.]  RIGHTS   AND    DUTIES   OP   PARTNERS.  227 

in  this  country,  that  property,  whether  real  or  personal,  which 
was  bought  by  partnership  funds,  or  put  by  a  partner  into 
partnership  stock,  either  formally  and  technically,  or  actually  and 
substantially,  and  in  such  a  way  that  it  is  held  forth  to  per- 
sons dealing  with  them  as  partnershij)  property,  could  not  be 
divested  of  this  character  and  made  private  and  several  property, 
merely  by  an  agreement  of  the  partners  ;  at  least,  not  in  respect 
to  any  parties  who  are  not  made  acquainted  with  the  agreement 
before  trusting  the   firm.^ 

§  176.  Provisions  respecting  Firm-Name.  —  Articles  almost 
always  provide  what  shall  be  the  name  of  the  firm  ;  this  name 
and  style  may  be,  as  we  have  seen,  whatever  the  partners 
wish ;  ((//y)  and  it  should  always  be  adhered  to.  If  any  partner 
uses  any  other  name  to  designate  the  firm,  it  is,  in  fact,  a  breach 
of  this  contract ;  and,  if  any  injury  results  from  it,  he  would  be 
resi)onsil)le  to  those  who  suffered,  whether  they  were  his  copart- 
ners or  other  ])ersous.  (/*)  It  is,  however,  not  very  unusual,  in 
this  country,  to  find  the  long  name  of  a  firm  shortened  in  prac- 
tice ;  Christian  names  are  dropped,  or  other  changes  introduced, 
to  make  the  name  of  the  firm  easier  to  write  or  to  speak.  Such 
a  change  being  made  so  often,  so  publicly,  and  by  such  persons, 
that  the  sanction  of  the  firm  may  be  implied,  becomes  their  legal 
name  ;  and  the  firm  is  bound  by  it,  as  they  are  not  by  any  name 
that  is  not  strictly  their  own,  unless  it  be  so  sanctioned,  (z)  If 
the  firm  have  adopted,  as  its  proper  name  and  style,  John  Smith 
<fe  Thomas  Brown,  neither  Smith  &  Brown,  nor  John  Smith  & 

(gg)  Crawford     v.    Collins,     45   Barb,  and  engagements  for  the  firm   b_y  a  name 

269.  shorter   than    that    provided    for   in    the 

(A)  .Marshall   v.  Colman,  2  Jac.   &  W.  articles,  and  praying  for  an  injunction  to 

268.     In  this  case,  Lord  Eldon  said  :    "  I  restrain   them   from    so   doing,   the    Lord 

have  no  difficulty  in   saying,  that  where  Chancellor,  though  he  refused  the  motion, 

the    members  of    a    partnership  contract  said  :      "  These   gentlemen    will  do    well 

by  covenant  that  the  firm  shall  be  A.,  B.,  (if  they  mean  to  protect  themselves  from 

C,    &   D.,    that   it   is   a   breach    of  that  the  interference  of   this  court)  to  use  all 

covenant   for  A.  to  sign  those  in.struments  the  names  in  the  concern  :  they  must  do 

to  which  the  covenant  refers  in  the  name  that,    or  the   court   will    be    under    the 

of  A.  &  Co.  ;  but  it  is  no  less  a  breach  of  necessity  of  awarding   an  injunction,   or 

that   covenant    for   D.    to   sign   his   own  dissolving   the   partnership."      We   have 

name,    adding    '  for   self     and   partners,'  already  had  occasion   to  consider  at  large 

because  by  these  words  it   can   no  more  the  name  which  a  firm  may  adopt,  and  by 

be  known  who  are  his   partners  than  by  which  one  partner  may  bind  it.   Tlie  right 

the  word  'Co.'  "     And  the  plaintiff's  bill  of  a  surviving  partner  to  use  the   name  of 

complaining  that  certain  of  his  partners  the  old  firm  will  be  treated  of  hereafter, 

(defendants)    had   entered  into  contracts  (j)  See  ante,  §  97. 

1  See  a7ite,  §  99. 


228  THE    LAW    OF    PARTNERSHIP,  [CH.    VII. 

Co.,  nor  John  Smith  for  self  and  partner,  bind  the  firm,  nor 
create  a  partnership  debt  which  is  to  be  paid  from  j)artnership 
assets,  unless  the  peculiar  circumstances  of  the  case,  in  some 
way,  make  that  another  name  of  the  firm.  For  a  firm  may  liave 
two  names.  It  is  not  very  uncommon  for  a  partnership  to  use 
one  name  in  one  place  and  another  name  in  another  ;  or  one  name 
in  one  branch  of  business,  or  one  class  of  transactions,  as  in  buying 
or  selling,  or  conveying,  and  another  in  a  different  class,  as  for 
accepting,  signing,  or  indorsing  negotiable  paper,  (y)  But  it 
would  be  a  lax  and  dangerous  pi-actice  to  use  two  or  more  ways 
of  naming  the  firm,  indiscriminately,  in  all  business.  In  New 
York,  the  use  of  fictitious  names  is  prohibited  by  statute  ;  and 
the  designation  "  &  Company,"  or  "  &  Co.,"  must  represent  an 
actual  partner  or  partners,  other  than  those  whose  names  are 
stated,  (/r)  ^ 

AVhere  the  partnership  name  is  not  agreed  upon  in  articles, 
and  is  written,  that  which  is  used  in  keeping  books  and  accounts, 
upon  bills  of  parcels,  or  on  negotiable  paper,  especially  if  it  is 
generally  known,  becomes  the  partnership  name.  {I) 

(j)  Williamson  v.  Johnson,  1  B.  &  C.  (/)  T^e   Roy  v.   Johnson,   2  Pet.    176  ; 

146  ;  ante,  §  97.  ante,  §  97. 

(k)  3  Rev.  Stat.  N.  Y.  (ed.  1859)  978  ; 
Acts  of  1833,  ch.  281,  §§  1,  2. 

1  Erie,  J.  has  said  that  the  statute  seems  not  to  have  been  a  very  useful  one.  Gay 
V.  Seibold,  97  N.  Y.  472,  476.  Since  this  is  the  feeling  of  the  court,  it  is  natural  that 
the  statute  should  have  been  strictly  interpreted.  Thus  it  has  been  said  not  to  invali- 
date a  transaction  unless  the  false  name  was  used  in  that  transaction.  Gay  v.  Seibold, 
97  N.  Y.  472.  And  it  is  no  defence  to  a  carrier  for  the  loss  of  property  marked  with 
the  fictitious  firm  name.  Wood  v.  Erie  Ry.,  72  N.  Y.  196.  Where  a  husband  and 
wife  claimed  in  good  faith  to  be  partners,  and  the  "  &  Co."  represented  the  wife,  it  was 
held  to  be  a  violation  neither  of  the  letter  nor  of  the  spirit  of  the  statute.  Zimmer- 
man V.  Erhard,  83  N.  Y.  74. 

The  California  code  (§  2468)  requires  persons  doing  business  under  fictitious  names 
to  file  and  publish  a  certificate  showing  the  names  and  residences  of  all  members  of  the 
firm,  and  provides  that  until  this  is  done  the  partnership  shall  not  maintain  any  action 
upon  contracts  made  or  transactions  had  in  the  partnership  name.  It  has  been  held 
that  an  assignment  of  such  a  claim  is  not  void,  and  the  assignee  may  sue  on  it  though 
the  rerpiired  certificate  has  not  been  filed.  Cheney  v.  Newberry,  67  Cal.  126,  7  Pac. 
445  ;  Wing  Ho  «.  Baldwin,  70  Cal.  194,  11  Pac.  565.  Where  the  firm  name  shows 
only  the  surname  of  the  partners  it  is  not  a  fictitious  name.  Pendleton  v.  Cline,  85 
Cal.  142,  24  Pac.  659  ;  Carlock  v.  Cagnacci,  88  Cal.  600,  26  Pac.  597. 


§  177.]  RIGHTS    AND    DUTIES   OF   PARTNERS.  229 

SECTION   YII. 

OF    THE    RIGHTS    OF    PKOPEKTV    OF    THE    PARTNERS    INTER    SE. 

§  177.  What  constitutes  Partnership  Property.  —  It  may  be  well 
to  determine,  in  the  first  {)l;ice,  what  is  partnership  projjerty.  In 
general,  by  this  phrase  is  understood  whatever  belongs  to  the 
partnership.  This  may  l)e  real  property  ;  but  the  law  of  partner- 
ship, in  respect  to  real  [)roperty,  is  so  much  affected  by  the  differ- 
ence, both  at  common  and  statute  law,  between  that  property  and 
personal  property,  and  the  system  of  rules,  springing  in  part  from 
their  conflict  and  in  part  from  their  combination,  is  so  peculiar, 
that  it  is  thouglit  best  to  consider  the  whole  subject  of  the  real 
property  of  partners  in  a  separate  chapter. 

The  personal  property  of  a  partnership  consists  mainly  of  the 
goods  and  merchandise  Avhich  it  buys  and  sells,  or  makes  and 
sells.  The  question  may  arise,  at  what  time  property  becomes 
partnership  property.  If  it  be  sold  to  a  partner  in  the  firm,  act- 
ing for  the  firm,  it  is,  of  course,  partnership  property  as  soon  as 
the  sale  is  complete  ;  for  by  the  sale  it  passes  from  the  seller  to 
the  buyer,  and  there  is  no  other  buyer  than  the  firm.  But  if 
goods  are  sold  and  delivered  to  one  partner,  without  any  knowl- 
edge on  the  part  of  the  seller  that  he  buys  for  the  firm,  and 
without  any  act  of  his  indicating  that-  he  so  buys,  and  the  firm 
becomes  insolvent  before  the  goods  are  actually  mingled  with  the 
partnership  goods,  the  question  may  arise,  whether  the  partner- 
ship creditors,  or  the  several  creditors  of  that  partner,  take  the 
goods.  This  question  must  be  answered  by  ascertaining  from  all 
the  circumstances,  to  whom  the  sale  was  actually  made  ;  for  if 
the  partner  bought,  in  fact,  as  agent,  although  his  agency  was 
unknown,  and  even  if  it  were,  and  continued  to  be,  purposely 
concealed,  this  circumstance  should  not  affect  the  rights  of  the 
creditors  of  either  class,  (m)  Nor  can  any  presumption  of  law 
that  the  goods  were  bought  for  the  firm  arise ;  although  if  the 

(m)  Saville  v.  Eobertson,  4  T.  R.  720  ;  answer   to  the   qnestiou  whether,  at  the 

Post  V.  Kiniberly,  9  Johns.   470  ;  Gouth-  time   of  their   purchase,    the   partnership 

waite  V.  Duckworth,  12  East,  421  ;  Everitt  was   actually   in   being,    and    capable   of 

V.  Chapman,  6  Conn.  347.     In  these  cases  owning  property,  or  whether  it  was  only 

and   other   analogous   ones,   the   question  agreed  upon,  and  dependent  for  its  actual 

when    goods   purchased   by    one   partner  existence   upon   the   happening   of    some 

become  the  property  of   the  partnership,  future  event, 
depends,     in    great    measure,    upon    the 


230  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

goods  were  such  as  the  firm  dealt  with,  and  such  as  that  partner 
bought  at  otlicr  times  for  the  firm,  here  would  be  good  ground  for 
argument  that  he  so  bought  these  goods.  Still,  as  he  might  law- 
fully have  bought  them  for  himself,  the  burden  of  proof  must  be 
upon  the  creditors  —  whether  of  the  lirni  or  of  a  partner —  who, 
in  order  to  obtain  the  goods  for  their  own  benefit,  must  maintain 
an  affirmative  in  respect  to  the  title ;  and  this  may  depend  upon 
the  form  of  the  action,  and  the  parties  between  whom  it  arises. 
Such  questions  are  not  very  unfrequent  in  practice,  but  have  not 
often  passed  into  adjudication  ;  the  reason  being,  that  they  are 
questions  of  fact  rather  than  of  law. 

Xot  only  all  the  goods  and  merchandise  properly  so  called,  but 
all  chattels  bought  by  the  partnership,  or  otherwise  coming  to 
them,  as  their  furniture,  books,  &c.,are  partnership  property  ;  and 
so  also  all  bills  of  exchange  and  notes,  or  other  evidence  of 
debts,  and  all  debts  or  accounts  or  balances,  or  other  claims ;  and 
all  shares  in  companies,  or  scrip,  bought  with  partnership  funds, 
or  otherwise  assigned  to  the  partnership,  and  not  transferred  to 
the  individual  partners  and  charged  in  their  accounts,  would  be 
regarded  as  partnership  property. 

It  may  be  well  to  remark,  that  a  gift  or  devise  of  property  to  a 
part  of  the  partners  in  a  firm,  even  if  it  be  on  account  of  a  loss 
sustained  by  the  firm,  or  be  otherwise  a  consequence  of  the  part- 
nei'ship  connection,  does  not  make  the  property  given  or  devised 
partnership  property,  or  give  any  right  to  it  or  interest  in  it  to 
the  other  partners,  (n)  ^ 

{n)  2   Swanst.  571,  572.      And   where  partnership  property,  and  that  the  creditors 

two  American  citizens  residing  at  Balti-  of  the  partnership  had  no  claim  on  them,  as 

more,  and  a  French  subject  residing  at  St.  against  the  separate  creditors  of  the  Ameri- 

Domingo,  were  in  ])artnerslHp  and  owners  cans.  Campbell  w.  Mullett,  2  Swanst.  551. 

of  certain  ships  captured  by  British  cruis-  But  it  seems  that,  if  in  a  similar  case  of  the 

ers,    and    the    commissioners,    appointed  seizure  of  partnership    effects,  instead  of 

under   the   7th    article  of    the   treaty   of  compensation   made  to    one    partner,   his 

commerce  of  1794,  between  Great  Britain  proportion  of  the  joint  property  be  restored 

and  America,  for  awarding  compensation  to  to  him,  m  specie,  the  goods  so  restored 

American  subjects  who  had  suffered  losses  will    be   held   never    to   have    lost   their 

by  capture  for  which  they  could  obtain  no  character  of  partnership  property,  and  will 

redress  in  the  ordinary  tribunals,  awarded,  therefore  be  divisible  among  the  several 

in  compensation  of  the  ships  of   the  ])art-  partners    according    to    their    respective 

nership  captured,  certain  sums  to  the  two  interests.      Thompson  v.  Ryan,  2  Swanst. 

Americans,  with  express  exclusion   of  the  555.     S;'e  Rowley  v.  Adams,  8  Jur.  994, 

French  citizen  as  an  alien  enemy, —  it  was  1000  ;    Clarke  v.  Richards,  1  Younge  &  C. 

held  that  the  sums  so  awarded  were  not  351,  383.      In   this  last  case,  it  was  held, 

1  Where  a  firm  transfers  all  its  assets  to  a  corporation,  and  each  partner  receives 
stock  of  the  corporation  in  patj'ment,  the  stock  is  the  individual  property  of  the  part- 
ners.    Singer  v.  Carpenter,  125  111  117,  17  N.  E.  761. 


§  178.]  RIGHTS    AND    DUTIES   OF   PARTNERS.  231 

§  178.  Title  to  Partnership  Chattels.  —  [The  personal  property 
belonging  to  a  partnership  is  not  owned  by  the  individual  part- 
ners, but  by  the  firm.  Consequently  title  maybe  conveyed  to  the 
firm  in  the  firm  name,  as  by  a  bill  of  sale  or  chattel  mortgage.  ^ 
Consequently  a  jjartner  has  no  interest  in  any  specific  property ,2 
and  if  he  attempts  to  transfer  his  interest  in  specific  property, 
no  such  interest  passes.^  A  partner  has,  however,  an  interest  in 
tlie  firm  assets  as  a  whole,  which  he  may  sell,  mortgage,  or 
pledge,^  even  when  the  partnership  is  being  wound  up,  and  the 
assets  are  in  the  hands  of  a  receiver.^ 

The  interest  of  a  partner  which  he  transfers  by  such  a  convey- 
ance is  his  distributive  share  of  the  assets  after  the  partnership 
accounts  are  settled  and  tlic  debts  paid.^  And  when  the  partnership 
is  insolvent  the  purchaser  of  a  partner's  interest  gets  nothing.'' 
If  one  partner  without  authority  attempts  to  mortgage  or  sell 
the  partnership  assets,  under  such  circumstances  that  title  does 
not  pass,  the  whole  interest  of  the  partner  passes.^  By  agree- 
ment between  the  partners  the  assets  may  be  divided  and  become 
individual  proi)erty  of  the  partners  ;  ^  but  a  single  partner  cannot 
demand  a  part  of  the  assets,^''  nor  should  they  be  shared,  pending 
a  final  settlement,  till  all  the  accounts  are  adjusted."  ^^J 

that  where  a  personal  office  or  employ-  is  not  necessarily  a  trustee  of  the  profits  of 

ment  is  purchased  with  the  partnership  the  office  for  the  other  partners,  after  the 

funds  for  the  benefit  of  the  pai-tnership,  term  of  the  partnership  had  expired, 
the  partner  in  whose  name  it  is  purchased 

1  Kellogg  V.  Olson,  34  Minn.  103,  21 N.  W.  36-4.  And  a  partner  who  has  conveyed 
to  the  firm  ceases  to  own  the  property.     Ringo  v.  Wing,  49  Ark.  457,  5  S.  W.787. 

2  Tait  V.  Murphy,  80  Ala.  440,  2  So.  317;  State  ;;.  Bowden,  18  Fla.  17;  Deeter 
V.  Sellers,  102  Ind.  458,  1  N.  E.  854.  Since  taxes  are  assessed  upon  the  property 
which  belongs  to  the  firms,  they  are  to  be  paid  out  of  the  assets  of  the  firm,  not  by 
the  partners  in  proportion  to  their  respective  interests,  or  to  their  respective  balances 
on  the  firm  books.     Meguiar  v.  Helms,  (Ky.)  14  S   W.  949. 

3  Xichol  V.  Stewart,  36  Ark.  612. 

*  Collins's  Appeal,  107  Pa.  590. 

*  Schurtz  V.  Romer,  82  Cal.  474,  23  Pac.  118. 

6  Bank  v.  Carrollton  R.  R.,  11  Wall.  624;  Nichol  v.  Stewart,  36  Ark.  612; 
Deeter  v.  Sellers,  102  Ind.  458,  1  N.  E.  854;  Bowman  v.  Spalding,  (Ky.)  2  S.  W. 
911  ;  Sherwood  v.  Creditors,  42  La.  Ann.  103,  7  So.  79  ;  Still  v.  Focke,  66  Tex.  715  ; 
2  S.  W.  59.     See  Buck  Stove  Co.  v.  Johnson,  7' Lea,  282. 

7  Mayer  v.  Garber,  53  la.  689,  6  N.  W.  63. 

8  Slieehy  v.  Gi-aves,  58  Cal.  449  ;  Carrie  v.  Cloverdale  Banking  &  Commercial  Co., 
90  Cal.  84,  27  Pac.  58  ;  Burbank  v.  Wiley,  79  N.  C.  501. 

9  McKinney  v.  Pjaker,  9  Ore.  74  ;  Weaver  v.  Ashcroft,  50  Tex.  427.  Or  the 
property  of  one  partner.  Stanton  v.  Westover,  101  N.  Y.  265,  4  N".  E.  529  ;  Miller 
V.  Estill,  5  Oh,  St,  509,  See  Singer  v.  Carpenter,  125  III.  117,  17  N.  E.  761; 
post,  §  252. 

1''  See  Kuhn  v.  Newman,  49  la.  424. 
"  Hall  V.  Clagett,  48  Md.  223. 


232 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII. 


§  179.  Proportional  Interests  of  Partners.  —  Partners  may  agree 
to  own  the  stock,  as  they  may  to  share  the  prolits,  in  any  propor- 
tions that  they  please.  And,  if  they  make  no  agreement,  there  is 
a  presumption  of  law  in  favor  of  an  equality  of  interest  in  the  case 
of  the  property,  as  there  is  of  the  profits.  The  authorities  cited 
in  the  note  will  show  that  this  presumption,  though  very  general, 
is  not  quite  universal ;  (o)  and  it  may  be  rebutted,  both  in  relation 


(o)  Fan-  V.  Johnson,  25  111.  522.  The 
existence  of  this  presiiniption  has  not, 
however,  been  uniformly  admitted  in  the 
English  law.  See  Peacock  v.  Peacock,  2 
Camp.  -15,  and  the  opinion  of  Lords  Broug- 
ham and  Wynford,  in  Thomjison  v.  AVil- 
liamson,  7  Bligh,  N.  s.  432,  5  Wils.  & 
Sh.  16.  This  case  was  heard  on  appeal 
to  the  House  of  Lords  from  the  Scottish 
Court  of  Ses-sion,  and  was  decided  mainly 
with  reference  to  the  law  of  Scotland. 
But  the  Lords,  whose  opinions  are  re- 
ported, took  occasion  to  examine  the  law 
of  England  on  the  point,  and,  mainly 
upon  the  authority  of  Peacock  v.  Peacock, 
came  to  the  conclusion  that  it  was  not 
at  variance  with  what  they  adjudged  to 
be  the  law  of  Scotland.  Their  opinion 
was,  that  where  parties  are  in  partnership 
without  agreement,  it  is  not  a  necessary 
jiresuniption  of  law  that  the  profits  are  to 
be  divided  in  equal  shares.  Lord  Wyn- 
ford said:  "  If  I  was  to  direct  a  jury,  or 
was  sitting  in  a  situation  to  exercise  an 
opinion  both  upon  the  law  and  the  fact, 
I  should  say,  if  there  be  no  evidence  to 
guide  my  judgment,  I  will  divide  it 
equally  ;  but  I  will  not  be  content  with 
merely  written  evidence,  I  will  look  at 
the  circumstances,  and  I  will  infer  as 
strongly  from  the  circumstances  the  in- 
tentions of  the  parties  as  from  the  written 
evidence."  And  Lord  Brougham  :  "  If  I 
was  trying  at  iiisi  priiis  the  question  what 
proportion  the  partners  in  a  concern  were 
severally  entitled  to,  I  should  be  disposed 
to  advise  the  jury,  leaving  the  matter  to 
them,  that  an  equal  division  would  be  a 
convenient  doctrine  of  fact,  and  form  the 
ground  for  a  convenient  inference  to  be 
drawn,  in  the  absence  of  other  evidence  : 
but  that  would  only  be  supposing  that 
there  was  no  other  evidence  in  the  cause  ; 
if  there  was  an}' .other  evidence  that  could 
be  found  to  alter  the  proportions,  that 
evidence  must  furnish  the  rule,  and  that 


would  be  au  additional  ground  for  saying, 
that  it  must  be  a  presumption  of  fact 
and  not  of  law."  And  even  where  there 
was  no  evidence.  Lord  Brougham  stated, 
as  the  ojiinion  of  Lord  Wynford,  of 
one  of  the  Chief  Justices,  and  of  him- 
self, that  a  jury  should  in  all  cases  be 
directed  to  take  into  consideration  "  the 
fairness  of  an  eipial  division  ;  but  not 
discountenancing  evidence,  rather  court- 
ing evidence,  rather  regretting  that  there 
was  no  evidence,  and  only  having  recourse 
to  that  presumption  in  the  last  resort,  for 
want  of  evidence."  See  also  the  opinion 
of  the  Master  of  the  EoUs,  in  Lake  v. 
Gibson,  1  Eq.  Cas.  Abr.  291  ;  Sharpe  v. 
Cummins,  2  Dow.  &  L.  504.  These  are 
the  principal,  if  not  the  only,  common- 
law  authorities,  which  are  clearly  at  vari- 
ance with  the  doctrine  of  the  text :  Mr. 
Justice  Story,  indeed,  says  (Story  on 
Part.  §  24  n.  (3)  )  :  "It  is  true,  that, 
in  the  case  of  Thompson  v.  Williamson, 
a  doubt  was  thrown  upon  this  doctrine 
(the  presumed  equality  of  the  shares  of 
partners),  as  a  doctrine  of  the  coTiimon 
law,  by  Lord  Wynford  and  Lord  Broug- 
ham ;  but  I  cannot  think  that  it  is  suc- 
cessfully maintained  by  the  reasoning 
contained  in  their  opinions.  Each  of 
these  learned  judges  admitted  on  that 
occasion,  that,  if  there  is  nothing  to  guide 
the  judgment  of  the  court  to  give  unequal 
shares,  there  is  no  rule  for  them  to  go  by, 
but  to  give  in  equal  shares.  What  is 
this  but  affirming,  that,  in  the  absence 
of  all  controlling  circumstances  leading  to 
a  different  conclusion,  the  presumption  of 
law  is,  that  the  partners  are  to  take  in 
equal  shares  ? "  We  conceive,  however, 
that  a  consideration  of  the  entire  opin- 
ions of  the  two  Lords  in  that  case  shows 
that,  in  their  view,  the  question  what 
proportions  the  partners  in  a  concern  are 
severally  entitled  to,  is  never,  in  the 
absence  of  special   agreement,  any  thing 


§  179.] 


RIGHTS    AND    DUTIES   OF   PARTNERS. 


233 


to  the  property  and  to  the  profits  ;  and,  as  we  should  say,  more 
easily  in  respect  to  the  property  than  as  to  the  profits,  (j?)  For 
if  A.,  1).,  &  C.  combine  their  property  in  very  different  propor- 
tions, it  is  still  very  possible,  and  indeed  very  frequent,  in  fact, 
that  he  who  brings  less  capital  brings  more  skill  or  more  labor, 
and  that  the  profits  are  therefore  equalized.  But  while  the  pro- 
fits resulting  from  this  mingling  of  mouey  and  labor  and  skill  are 
equal,  so  far  as  refers  to  the  stock  alone,  we  should  say  that  the 
law  would  listen  favorably  to  all  evidence  and  all  circumstances 
which  tended  to  preserve  the  same  proportions  of  interest  in  the 


but  a  question  of  fact  to  be  passed  upon  by 
the  jury.  They  both  admit  that  there  may 
be  instances  in  which  the  inference  may 
be  made  that  the  partners  in  a  concern 
have  e(pial  shares.  But,  if  we  unth'r- 
stand  their  views,  this  inference  is  not 
to  be  made  by  the  court,  but  can  onlj'  be 
drawn  by  the  jury.  That  is,  the  pre- 
sumption of  equality  of  shares  among 
partners  is  not  a  presumption  of  law,  but 
a  presumption  of  fact.  And  the  question 
must  always  be  submitted  to  the  jury. 
And  it  is  obvious,  from  the  whole  ten- 
dency and  scope  of  tiie  opinions  of  the 
two  Lords,  that  unless  the  question  of 
the  distribution  of  interest  were  presented 
in  this  simple  form,  "  Given  that  A.  & 
B.  are  partners  ;  what  are  their  shares?" 
they  did  not  contemplate  that  the  pre- 
sumption of  ecjual  shares  among  partners, 
which  they  allowed  to  exist,  could  have 
any  operation.  "  It  is  scarcely  possible," 
says  Lord  Wynford,  "  for  a  case  to  occur 
in  wdiich  there  will  not  be  circumstances 
which  it  is  fit  to  submit  to  the  considera- 
tion of  a  jury,  and  which  would  induce  a 
jury  to  give  in  unequal  siiares." 

(p)  The  presumption  of  equality  of 
interest  may  be  rebutted,  not  only  by 
proof  of  an  express  agreement  between 
the  parties  to  share  unequally,  but  b}"^ 
evidence  of  any  modes  of  dealing,  or  of 
any  transactions,  from  which  such  a  con- 
tract can  be  implied.  In  Stewart  v. 
Forbes,  1  McX.  &  G.  137,  146;  the 
Lord  Chancellor  said  :  "  The  plaintiff's 
bill  rests  upon  the  supposition  that,  from 
1830  to  1840,  Sir  Charles  Forbes  and  the 
plaintiff  were  equal  partners  ;  and  Pea- 
cock V.  Peacock,  2  Camp.  45,  16  Ves.  55, 
56,  was  relied  on  as  a  foundation  for  that 


assumption.  In  that  case,  it  was  prop- 
erly held,  that,  in  .the  absence  of  any 
contract  between  the  parties,  or  any  deal- 
ing from  whicli  a  contract  might  be 
inferred,  it  would  be  assumed  that  tlie 
parties  had  carried  on  their  business  on 
terms  of  an  equal  partnership.  That  case 
has  no  application  to  the  present,  because 
there  is,  in  this  case,  conclusive  evidence, 
not  from  any  form  of  contract,  but  from 
the  books  of  the  business  and  the  deal- 
ings between  the  parties,  that  such  were 
not  the  terms  on  which  the  parties  carried 
on  their  business.  An  equal  partnership 
implies  not  only  an  equal  participation  de 
facto  in  profits  and  loss,  but  a  right  in 
each  partner  to  claim  and  insist  on  such 
])articipation.  This  is  what  the  law  has 
im[ilied  in  the  absence  of  all  evidence  of 
a  contrary  intention  of  the  parties.  But 
what  would  have  been  the  decision  in 
Peacock  v.  Peacock,  if  the  books  and 
accounts,  instead  of  absolute  silence  as  to 
tlie  shares  of  the  partners  in  each  year, 
had  described  the  shares  to  which  the 
partners  were  entitled  in  the  business, 
and  had  attributed  to  the  plaintiff  four- 
sixteenths  only  of  the  shares  of  the  busi- 
ness ?  These  entries  are  as  conclusive  of 
the  rights  of  the  parties  as  if  they  had 
been  found  prescribed  in  a  regular  con- 
tract." See  Webster  v.  Bray,  7  Hare, 
159.  It  is  not  to  be  assumed,  however, 
tliat  the  annual  stock  taken  by  a  partner- 
ship necessarily  represents  the  interests 
of  the  several  partners  in  the  firm  ;  but 
it  may  or  may  not  do  so,  according  to  the 
purpose  for  which,  and  the  mode  in 
which,  it  is  made  up.  Travis  v.  Milne, 
9  Hare,  153. 


234 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VII, 


capital  stock  which  originally  existed.  Practically,  this  question 
cannot  often  arise.  If  the  hrni  be  insolvent,  its  stock  is  all  gone, 
and  all  questions  of  ownership  disappear  when  there  is  nothing  to 
own.  Such  (juestions,  in  practice,  come  only  at  dissolution,  by 
death  or  otherwise  ;  or  when  some  withdrawal  or  diminution  of 
stock  is  i)roposed.  Then  they  will  generally  be  determined  by 
the  articles ;  for  they  are  seldom  omitted  when  there  is  great  ine- 
quality in  the  contributions  to  be  made  by  the  different  partners. 
If  not  so  determined,  it  might  be  that  law  or  equity  would  pre- 
sume that  the  same  proportions  of  ownership  and  interest  continue 
which  originally  existed  ;  and,  certainly,  comparatively  slight  evi- 
dence would  suffice  to  establish  this.  Whether,  in  the  absence  of 
special  agreement  upon  the  point,  any  presumption  exists,  and 
what  it  is,  and  whether  of  law  or  of  fact,  and  what  are  its 
grounds,  and  what  its  strength,  must  depend,  not  on  the  law  of 
partnership  alone,  but  on  that  law  in  connection  with  the  princi- 
ples of  evidence.  But  notwithstanding  some  conflict,  as  indicated 
in  the  cases  cited  in  the  previous  note,  we  are  of  opinion  that  the 
prevailing  rule  of  law  that  partners  are  interested  in  stock  and 
profits  in  equal  proportions,  in  the  absence  of  any  evidence  to  the 
contrary,  may  be  considered  as  pretty  well  settled  both  in  Eng- 
land and  this  country,  (g) 


iq)  Thompson  v.  Williamson,  cited  in 
preceding  note,  although  the  cUda  re- 
specting the  English  law,  which  it  con- 
tains, are  entitled  to  great  respect,  as  the 
opinions  of  eminent  judges,  is  yet  ex- 
pressly said  by  Lord  Brougham  to  be 
decided  as  a  question  of  Scottish  law. 
And  even  as  an  adjudication  under  the 
law  of  Scotland,  which  is  founded  upon 
the  civil  law,  it  has  been  thought  open  to 
question.  See  Story  on  Part.  §  24,  and 
note.  Of  Peacock  v.  Peacock,  which 
stands  alone  among  the  common-law  au- 
thorities, Lord  Eldon,  who  had  directed 
the  issue,  said  :  "The  result  of  the  issue 
that  was  directed  appears  to  be  extraor- 
dinary. Tlie  proposition  being  that  the 
son  was  interested  in  some  share,  not 
exceeding  a  moiety,  the  jury  in  some  way, 
upon  the  footing  of  a  quantum  meruit, 
held  him  entitled  to  a  quarter.  I  have 
no  conception  how  that  principle  can  be 
applied  to  a  partnership."  Stewart  v. 
Forbes,  1  McN.  &  G.  137;  Webster  v. 
Bray,  7  Hare,  159  ;  M'Gregor  v.  Bain- 
brigge,  7  Hare,  164  n.     In  this  country, 


it  never  seems  to  have  been  controverted, 
that  in  the  absence  of  any  contract  upon 
the  subject,  the  partners  were  interested 
in  equal  proportions,  however  diti'erent  or 
unequal  their  contributions  to  the  joint 
concern.  Gould  v.  Gould,  6  Wend.  263  ; 
Taylor  v.  Taylor,  2  Murph.  70  ;  Conwell 
V.  Sandidge,  5  Dana,  210,  211  ;  Lee  v. 
Lashbrooke,  8  Dana,  214;  Jones  v.  Jones, 
1  Ired.  Eq.  332  ;  Honore  v.  Colmesnil,  1 
J.  J.  Marsh.  506  ;  Turnipseed  v.  Good- 
win, 9  Ala.  372  ;  Donelson  v.  Posey,  13 
Ako  752,  772  ;  Stein  v.  Roliertson,  30 
Ala.  286,  292  ;  Roach  v.  Perry,  16  III. 
37.  So,  if  a  shipment  is  made  to  part- 
ners, they  are  held  by  the  Prize  Court  to 
take  in  equal  moieties,  unless  upon  the 
original  papers  a  different  proportion  ap- 
pears. The  San  Jose  Indiano,  2  Gall. 
268,  303. 

It  is  to  be  observed  that,  in  the  above 
cases,  no  distinction  is  taken  between  the 
property  and  the  profits  of  a  firm,  aj 
regards  the  application  of  the  presump- 
tion of  an  equality  of  interest  between 
the  partners.     In  Farrar  v,  Beswick,  1 


§  180.]  RIGHTS   AND   DUTIES    OF    PARTNERS.  235 

§  180.  Insurance  of  Partnership  Property. — [The  personal  prop- 
erty of  a  partnership  may  be  insured  and  the  jjoUcy  taken  out  in 
the  firm  name.  When  the  property  of  a  firm  is  insured  under  a 
poHcy  whieh  forbids  assignment  of  the  property  insured,  it  often 
becomes  a  question  whether  certain  deaHngs  by  a  partner  with 
his  interest  will  avoid  the  policy.  Since  the  partnership  is  the 
real  owner,  and  one  partner  cannot  transfer  any  interest  in  tbe 
property,  but  only  his  right  to  an  account,  it  would  seem  that  a 
sale  of  his  interest  in  the  partnership  should  not  be  held  to  be  an 
assignment  of  property ;  and  therefore  that  tlie  policy  should  not 
become  void  under  a  clause  forbidding  assignment  of  the  property 
insured,  by  sale  or  otherwise. 

In  accordance  with  this  view  the  better  oj)inion  is  that  where  a 
partner  conveys  his  interest  to  a  copartner  the  policy  is  not 
avoided  under  such  a  clause.^  The  same  reasoning  would  seem  to 
apply  to  a  conveyance  of  his  interest  by  a  partner  to  a  third 
person.  The  partnership  alone  can  transfer  a  chattel ;  the  part- 
ner transfers  only  his  right  to  an  account.  There  is  some  authority 
for  such  a  rule  ;  ^  but  the  prevailing  view  would  seem  to  be  that 
the  policy  is  avoided  by  such  a  transfer.^ 

Under  such  a  clause  if  a  sole  owner  insures  property,  and  then 
forms  a  partnership  with  a  stranger,  putting  in  the  property  as 
capital,  it  has  been  held  that  the  policy  is  not  avoided,  but  the 
assured  may  recover  to  the  extent  of  the  interest  remaining  in  him.* 

Where  on  the  other  hand  it  is  provided  that  if  the  title  of  the 

Moody  &  K.  527,  the  presumption  that  also,  in  Gould  v.  Gould,  6  Wend.  263  ; 
the  several  partners  were  equally  inter-  Donelson  v.  Posey,  13  Ala.  772.  See 
ested,  was  applied  as  to  the  stock  only  ;  so     Penny  v.  Black,  9  Bosw.  310. 

1  Drennen  v.  London  Assurance  Corp.,  20  F.  R.  657  ;  Dermani  v.  Home  Ins.  Co., 
26  La.  Ann.  69  ;  Powers  v.  Guardian  Ins.  Co.,  136  Mass.  108  ;  Pierce  v.  Nashua  Ins. 
Co.,  50  N.  H.  297  ;  Combs  v.  Shrewsbury  Ins.  Co.,  34  N.  J.  Eq.  403  (scmbh)  ; 
Hotfman  v.  Aetna  Ins.  Co.,  32  N.  Y.  405  (overruling  Bodle,  v.  Chenango  Co.  Ins.  Co., 
2  N.  Y.  53)  ;  West  v.  Citizens'  Ins.  Co.,  27  Oh.  St.  1.  (So  even  of  a  release  by  one 
tenant  in  common  to  the  other.  Lockwood  v.  Middlesex  Assurance  Co.,  47  Conn. 
553.)  Contra,  Finley  v.  Lycoming  Ins.  Co.,  30  Pa.  311  ;  Wood  v.  Rutland  &  Addison 
Ins.  Co.,  31  Vt.  552  (semble) ;  Keeler  v.  Niagara  Ins.  Co.,  16  Wis.  523  (sembh).  In 
Hobbs  V.  Memphis  Ins.  Co.,  1  Sneed,  444,  the  assignee  partner  was  allowed  to  recover 
only  for  his  original  interest. 

2  West  V.  Citizens'  Ins.  Co.,  27  Oh.  St.  1  (semble).  See  Powers  v.  Guardian  Ins. 
Co.,  136  Mass.  108. 

8  Drennen  v.  London  Assurance  Corp.,  20  F.  R.  657  (semble)  ;  Shuggart  v. 
Lycoming  Ins.  Co. ,  55  Cal.  408. 

*  Seanlon  v.  Union  Ins.  Co.,  4  Biss.  511  ;  Cowan  v.  Iowa  State  Ins.  Co.,  40  la. 
651  ;  Manley  v.  Ins.  Co.  of  North  America,  1  Lans.  20.  But  query.  See  McEwan 
V.  Western  Ins.  Co.,  1  Mich.  N.  P.  118,  where,  however,  the  policy  forbade  a  change 
of  title. 


236  THE   LAW   OF   PARTNERSHIP.  [CH.    VII. 

insured  property  is  transferred  or  changed  the  policy  shall  be  void, 
it  seems  to  be  pretty  generally  agreed  that  the  transfer  of  a  part- 
ner's interest  in  the  property  changes  the  title,  and  avoids  the 
policy.^ 

Since  the  policy  is  in  the  nature  of  a  specialty,  only  the  parties 
to  it  can  sue  ;  and  therefore  though  one  partner  has  assigned  his 
interest,  he  must  join  in  the  action  as  a  party  plaintiff.^ 

Where  the  policy  was  to  be  void  if  the  party  assured  was  not 
sole  and  unconditional  owner  of  the  goods  for  his  own  use,  it  was 
held  that  a  surviving  partner  could  not  recover  on  a  policy  taken 
out  by  him,  since  he  held  in  trust.^] 

§  181.  Good-Will. — There  is  yet  another  thing  which  is  cer- 
tainly, in  some  respects,  partnership  property,  but  which  it  is  not 
so  easy  to  define  ;  and  this  is  the  good-will  of  the  firm.*     A  dis- 

1  Dix  V.  Mercantile  Ins.  Co.,  22  111.  272  ;  Hartford  Ins.  Co  v.  Ross,  23  Iiid.  179; 
Hathaway  v.  State  Ins.  Co.,  64  la.  229,  20  N.  W.  164.  So  of  course  on  a  dissolu- 
tion and  division  of  the  assets,  Dreher  v.  Aetna  Ins.  Co.,  18  Mo.  128  ;  upon 
partition  between  co-tenants,  Barnes  v.  Union  Ins.  Co.,  51  Me.  110  ;  and  upon 
conveyance  of  an  undivided  interest  in  individual  property.  Western  Massacluisetts 
Ins.  Co.  V.  Riker,  10  Mich.  279.  But  there  is  no  cliange  of  title  upon  the  ajipoint- 
meut  of  a  receiver  of  the  partnership  assets,  for  title  remains  in  the  pai'tners.  Keeney 
v.  Home  Ins.  Co.,  71  N.  Y.  396  ;  and  there  is  at  lea.st  one  decision  to  the  effect  that 
a  sale  of  his  interest  by  one  partner  to  another  is  not  such  change  of  title  as  will 
avoid  a  policy.  Burnett  v,  Eufaula  Ins.  Co.,  46  Ala.  11.  Query  whether  the 
decision  may  not  be  supported. 

2  Fireman's  Ins.  Co.  v.  Floss,  67  Md.  403,  10  Ath  139;  Tate  v.  Citizens'  Ins.  Co., 
13  Gray,  79. 

3  Crescent  Insurance  Co.  v.  Camp,  64  Tex.  521. 

*  Good-will :  —  Good-will  is  defined  by  Lindley  as  "  the  benefit  arising  from  connec- 
tion and  reputation  ;"  and  its  value  to  be  "what  can  be  got  for  the  chance  of  being 
able  to  keep  that  connection  and  improve  it."  1  Lind.  Part.  *  439.  Whatever  the 
terms  by  wliich  we  define  it,  it  seems  that  so  far  as  it  has  a  transferable  value,  it  con- 
sists in  the  additional  value  which  a  business  possesses  wken  it  can  be  sohl  as  "  a  going 
concern."  In  order  to  preserve  the  good-will,  the  business  must  be  kept  in  the  condi- 
tion so  described.  AVedderburn  v.  Wedderburn,  22  Beav.  84.  Good-will  is  more  than 
the  mere  habituation  of  customers  to  a  certain  locality  (which  seems  to  have  been  the 
idea  of  Lord  Eldon,  Cruttwell  v.  Lye,  17  Ves.  335).  If  business  premises  are  burned, 
for  instance,  the  fire  cannot  destroy  the  good-will.  The  good-will  inheres  in  the  busi- 
ness, not  in  the  locality  ;  and  though  the  plaoe  of  business  is  removed,  the  good-will 
contiuues.  Cliurton  v.  Douglas,  Johns.  174.  But  see  Musselman's  Appeal,  62  Pa.  81. 
The  good-will  of  an  inn  is  however  local.  Chittenden  v.  Witbeck,  50  Mich.  401,  15 
N.  W.  526  ;  Elliot's  Appeal,  60  Pa.  161.  It  is  sometimes  said  that  there  is  good-will 
in  a  professional  practice,  as  for  instance,  that  of  a  jihysician.  See  Warfield  v.  Booth, 
33  Md.  63.  It  is  doubtful,  however,  if  this  is  projjcrly  called  good-will.  A  sale  of  such 
an  interest  by  one  physician  to  another  is  nothing  more  than  the  agreement  of  the  sell- 
ing party  to  retire  from  practice  and  to  recomtnend  his  patients  to  his  successor.  Hoyt 
V.  Holly,  39  Conn.  326.     See  D wight  v.  Hamilton,  113  Mass.  175. 

The  good-will  of  an  established  business  is  now  clearly  recognized  as  property  ;  so 
much  so.  that'a  wrongful  injury  to  a  man's  business,  though  no  other  injury  is  suffered, 
constitutes  an  actionable  tort.     Riding  v.  Smith,  1  Ex.  D.  91  ;  Temperton  v.  Russell, 


§  181.]  RIGHTS   AND    DUTIES   OF   PARTNERS.  237 

tinctiuii  has  been  taken,  in  this  respect,  between  the  interest  of 
a  })artnershi}j  resting  on  the  contracts  of  the  firm  with  a  third 

37  Sol.  Jour.  423.  An  assigmnent  of  an  interest  in  the  good-will  of  a  business  is  a 
conveyance  of  property,  and  must  be  stamped  as  such.  Potter  v.  Connuissiouer, 
10  Ex.   147. 

Since  the  good-will  of  a  business  is  property,  the  good-will  of  a  business  conducted 
by  a  partnership  is  eviilently  firm  profjerty,  and  cannot  be  used  by  one  member  of  the 
firm  as  his  individual  property.  So  long  as  the  firm  business  continues,  it  is  like  any 
of  the  assets  of  the  firm  ;  it  may  be  transferred  by  the  combined  action  of  all  the  part- 
ners. Cruess  t-.  Fesshsr,  39  Cal.  33(5 ;  Herfort  v.  Cramer,  7  Col.  483  ;  Wallingford  v. 
Burr,  17  Neb.  137.  It  cannot,  of  course,  be  transferred  by  an  individual  partner. 
Thus,  a  devise  by  one  partner  of  his  interest  in  the  good-will,  apart  from  any  interest 
in  tlie  business,  is  void,  llobertson  v.  (juiddington,  28  Beav.  529.  Being  incorporeal, 
it  cannot  be  seized  on  execution  and  sold  by  a  sherilf.  Helmore  v.  Smith,  35  Ch.  D. 
436  (C.  A.).  It  exists  entirely  apart  from  the  stock  in  trade,  and  does  not  necessarily 
pass  with  a  sale  of  the  stock.  Ravvson  i;.  Pratt,  91  lud.  9.  But  see  McFarland  v. 
Stewart,  2  Watts,   111. 

A  sale  of  all  interest  in  a  business,  or  in  all  the  assets  of  a  business,  transfers  the 
g'ood-will.  Hoxie  v.  Chaney,  143  Mass.  592,  10  N.  E.  713  ;  Merry  v.  Hoopes,  111 
N.   Y.  415,  18  N.  E.  714. 

Upon  dissolution  it  is  evident  that  some  immediate  disposition  must  be  made  of  the 
good-will,  or  else,  the  business  transactions  having  entirel}'  ceased,  the  good-will  is  lost. 
If  the  dissolution  is  from  any  cause  but  death,  either  partner  has  a  right  to  secure  a 
sale  of  the  good-will  for  the  benefit  of  the  partnership.  Bradbury  v.  Dickens,  27  Beav. 
53 ;  Pawsey  v.  Armstrong,  18  Ch.  D.  698  ;  Sheppard  v.  Boggs,  9  Neb.  257,  2  N.  W. 
370  ;  Bininger  ;;.  Clark,  60  Barb.  113  ;  Dayton  v.  Wilkes,  17  How.  Pr.  510.  It  would 
seem  to  be  within  the  power  of  the  court  to  appoint  a  receiver,  in  order  that  the 
business  may  be  kept  up  and  sold  as  a  "going  concern."  Turner  v.  Major,  3  Giff.  442  ; 
Taylor  v.  Neate,  39  Ch.  D.  538  ;  Levi  v.  Karrick,  8  la.' 150  ;  Marten  v.  Van  Schaick, 
4  Paige,  479. 

In  case  of  death,  the  good-will  does  not  survive  beneficially  to  the  surviving  part- 
ner ;  and  if  the  survivor  continues  the  business  without  a  break,  he  will  be  obliged  to 
account  for  the  value  of  the  good-will.  Wedderburn  v.  Wedderburn,  22  Beav.  84, 104  ; 
Smith  V.  Everett,  27  Beav.  446  ;  Mellersh  v.  Keen.  28  Beav.  453  ;  Dougherty  v.  Van 
Nostrand,  1  Hoff.  Ch.  68  ;  Ranmielsberg  v.  Mitchell,  29  Ohio  St.  22. 

The  value  of  the  good-will  in  such  cases  is  very  materially  affected  by  the  circum- 
stances about  to  be  stated.     Hall  v.  Barrows,  33  L.  J.  Ch.  204,  and  cases  supra. 

Where  the  good-will  of  a  business  is  sold,  it  would  seem  that  the  sellers  should  be 
allowed  to  do  nothing  to  detract  from  the  value  of  the  good-will.  Unless  the  purchaser 
can  prevent  the  members  of  the  selling  firm  from  entering  into  business  again  in  the 
neighborhood,  much  of  the  value  of  the  good- will  is  lost.  Yet  it  is  held  that  any  mem- 
ber of  the  selling  firm  may  enter  upon  the  same  business,  in  the  same  neighborhood. 
Cruttwell  V.  Lye,  17  Ves.  335  ;  Shackle  v.  Baker,  14  Ves.  468  ;  Harrison  v.  Gardner, 
2  Madd.  198  ;  Kennedy  v.  Lee,  3  Mer.  441  ;  Porter  i'.  Gorman,  65  Ga.  11  ;  Bergamini 
V.  Bastian,  35  La.  Ann.  60  (sale  by  sole  trader)  ;  Hoxie  v.  Chaney,  143  Mass.  592,  10 
N.  E.  713.  He  may  even  solidt  the  customers  of  the  old  firm.  Pearson  v.  Pearson,  27 
Ch.  D.  145  (C.  A.)  ;  Vernon  i;.  Hallam,  34  Ch.  D.  748  (overruling Labouchere  v.  Dawson, 
L.  R.  13  Eq.  322  ;  Ginesi  v.  Cooper,  14  Ch.  D.  596  ;  Leggott  v.  Barrett,  15  Ch.  D. 
306).  And  may  advertise  his  connection  with  the  business.  Hookham  v.  Pottage,  L.  R. 
8  Ch.  91  ;  Labouchere  v.  Dawson,  L.  R.  13  Eq.  322.  See  post,  §  347,  note  (x).  So 
where  a  retiring  partner  sells  the  business,  including  the  good-will,  to  the  continuing 
partners,  the  former  may  enter  again  into  the  same  business,  in  an  adjoining  shop,  and 
solicit  the  old  customers.  Churton  v.  Douglas,  Johns.  174  ;  Cottrell  v.  Manufacturing 
Co.,  54  Conn.  122,  6  Atl.  791  ;  Williams  v.  Farrand,  88  Mich.  473,   50  N.  AV.   446  ; 


238  THE   LAW   OP   PARTNERSHIP.  [CH.    VII. 

party,  and  tlmt  which  has  no  such  foundation,  (r)  We  have 
much   doubt,  however,  whether  this  distinction    rests    on    good 

(r)  Lord  Eldon  has  thus  stated  and  ex-  In  tliat  sense,  therefore,  the  good-will  of 
plained  this  distinction  :  "  Where  two  a  trade  follows  from  and  is  connected 
persons  are  jointly  interested  in  trade,  and  with  the  fact  of  sole  ownership.  There  is 
one,  by  purchase,  becomes  sole  owner  of  another  way  in  which  the  good- will  of  a 
the  partnership  property,  the  very  circum-  trade  maybe  rendered  still  more  valuable  : 
stance  of  sole  ownership  gives  him  an  ad-  as  by  certain  stipulations  entered  into  be- 
vantage  beyond  the  actual  value  of  the  tween  the  parties  at  the  time  of  the  one 
property,  and  which  may  be  pointed  out  relinquishing  his  share  in  the  business  ; 
as  a  distinct  benefit  essentially  connected  as  by  inserting  a  condition  that  the  with- 
with  the  sole  ownership.  In  the  case  of  drawing  partner  shall  not  carry  on  the 
the  trade  of  a  nursery-man,  for  instance,  same  trade  any  longer,  or  that  he  shall  not 
the  mere  knowledge  of  the  fact  that  he  is  carry  it  on  within  a  certain  distance  of  the 
sole  owner  of  the  projjcrty,  and  in  the  sole  place  where  the  partnership  trade  was 
and  exclusive  management  of  the  concern,  carried  on,  and  where  the  continuing  part- 
gives  him  an  advantage  which  the  other  ner  is  to  carry  it  on  upon  his  own  sole  and 
partner,  supposing  him  to  carry  on  the  separate  account."  Kennedy  v.  Lee,  3 
same  trade,  with  other  property  not  the  Mer.  452. 
partnership  property,  would  not  possess. 

Dayton  v.  Wilkes,  17  How.  Pr.  510.  But  the  selling  partner  or  partners  thus  re-enter- 
ing into  business  must  not  do  so  in  such  a  way  as  to  seem  to  be  carrying  on  the  old 
business  •  as  by  advertising  that  he  has  removed  from  tlie  old  place  to  the  new.  Hall's 
Appeal,  60  Pa.  458.  This  when  done  is  usually  done  by  using  the  old  firm  name  or  a 
similar  one  ;  which  is  accordingly  forbidden.  Myers  v.  Buggy  Co.,  54  Mich.  215,  19 
N.  W.  961  ;  Williams  v.  Farrand,  88  Mich.  473,  50  N.  W.  446. 

In  accordance  with  this  general  rule,  a  surviving  partner  may  do  business  without 
rendering  himself  liable  to  tlie  estate  of  the  deceased,  provided  he  does  not  engage  in 
business  in  such  a  way  as  to  continue  the  old  business,  thereby  gaining  an  advantage. 
Davies  v.  Hodgson,  25  Beav.  177  ;  Smith  v.  Everett,  27  Beav.  446  ;  Mellersh  v.  Keen, 
28  Beav.  453  ;  Rammelsberg  v.  Mitcliell,  29  Ohio  St.  22.  The  same  is  true  of  a  liqui- 
dating partner.  Musselman's  Appeal,  62  Pa.  81.  Or  of  either  partner,  upon  dissolu- 
tion without  agreement  as  to  a  continuance  of  the  business.  Caswell  v.  Hazard,  121 
N.  Y.  484,  24  N.  E.   707. 

In  Williams  v.  Farrand,  88  Mich.  473,  483,  50  N.  W.  446,  McGrath,  J.,  defends 
the  established  rule  as  follows.  "A  retiring  partner  conveys,  in  addition  to  his  interest 
in  the  tangible  effects,  simply  the  advantages  that  an  established  business  possesses 
over  a  new  enterprise.  The  old  business  is  an  assured  success,  the  new  an  exj)eriment. 
The  old  business  is  a  going  business,  and  produces  its  accustomed  profits  on  the  day 
after  the  transfer.  It  is  capital  already  invested,  and  earning  profits.  The  continuing 
partner  gets  these  advantages.  The  new  business  must  be  built  up.  The  capital  taken 
out  of  the  concern  will  earn  nothing  for  months,  and  in  all  probability  the  first  year's 
business  will  show  loss  instead  of  profit.  For  a  time,  at  least,  it  is  capital  awaiting 
investment,  or  invested,  but  earning  nothing.  The  retiring  partner  takes  these  chances 
or  disadvantages." 

In  Massachusetts  there  seemed  a  tendency,  at  one  time,  to  hold  that  a  sale  of  the 
good-will  of  a  business  carried  with  it  an  agreement  not  to  compete  in  such  a  way  as  to 
derogate  from  the  value  of  the  thing  granted.  Thus  the  court  restrained  from  compet- 
ing the  seller  of  the  good-will  of  a  medical  practice.  Dwight  v.  Hamilton,  113  JIass. 
175.  And  of  a  milk-route.  Munsey  v.  Butterfield,  133  Mass.  492.  It  has  since  been 
held,  however,  that  these  decisions  turned  on  the  exceptional  nature  of  the  business 
sold.     Hoxie  v.  Chancy,  143  Mass.  592,  596,  10  N.   E.   713. 

If  the  sale  of  a  business  with  its  good-will  includes  an  agreement  by  the  seller  to 


§  181.]  RIGHTS    AND    DUTIES    OF   PARTNERS.  239 

authority,  or  good  reason.  The  claims  or  interests  of  the 
partnership  arising  iVoni  contracts  made  with  them,  or  on 
their  vested  and  exchisive  rights,  however  accjuired,  seem  to 
be  excluded  from  the  meaning  of  "  good-will ;  "  for  the  only 
pro[)er  signification  of  the  word  must  be,  that  benefit  or  advan- 
tage which  rests  only  on  the  good-ivill,  or  kind  and  friendly 
feeling  of  others,  and  which,  of  course,  can  be  wholly  lost 
without  giving  rise  to  any  legal  right,  or  ground  of  complaint. 
This  simple  meaning  of  "  good-will "  we  take  to  be  the  true 
technical  and  legal  meaning  of  the  word.  Lord  Eldon  defined 
this  about  as  well  as  it  can  be  defined,  when  he  said,  that  "  the 
good-will  of  a  trade  is  nothing  more  than  the  probability  that  the 
old  customers  will  resort  to  the  old  place  ;"  although  this  defini- 
tion is  open  to  the  objection  that  it  localizes  that  interest  which 
we  call  good-will,  and  makes  it  altogether  dej)endent  upon  place, 
and  wholly  independent  of  persons,  (s)  This  is,  nevertheless,  an 
exact  statement  of  the  legal  meaning  of  good-will.  It  is  a  hope 
or  expectation,  which  may  be  reasonable  and  strong,  and  may 
rest  upon  a  state  of  things  that  has  grown  up  through  a  long 
period,  and  been  promoted  by  large  expenditures  of  money. 
And  it  may  be  worth  all  the  money  it  has  cost,  and  a  great  deal 
more ;  but  it  is,  after  all,  nothing  more  than  a  hope,  grounded 
upon  a  probability. 

There  is  some  difficulty,  no  doubt,  in  treating  this  hope  as 
property  ;  but  if  that  which  is,  in  fact,  a  valuable  interest,  were 
not  treated  as  one,  injustice  would  be  done,  and  therefore  both 
law  and  equity  treat  the  good-will  of  a  business  as  a  valuable 
pecuniary  interest,  (0  although  it  differs  in  important  respects 
from  tangible  property,  or  legal  choses  in  action.  Thus,  it 
cannot   be   valued    as  a   separate  property,  or,  at  least,   is  not 

(s)  Criittwell  V.  Lye,  17  Ves.  335,  346.  Ves.  468  ;  Harrison  v.  Gardner,  2  Madd. 

This   definition,  as   we   have   above   inti-  198,  219  ;  Cruttwell  v.  Lye,  1  Rose,  123  ; 

mated,  makes  good-will  local,  and  an  inci-  16  Am.  Jur.  87,  92. 

dent  of  the  place  ivhere  business  has  been  (f)   Dougherty    v.    Van     Nostrand,    1 

ea.rned  on,  and  not  oi  the  pcrso)is  by  whom  Holf.     Ch.    68;    Williams    v.   Wilson,    4 

it  has  been  conducted.     It  is  in  this  sense,  Smidf.  Ch.  379.     As  to  how  far  a  name 

only,  that  good-will  is  recognized  by  the  law  which   the  firm   have  used  in  their  busi- 

as  a  pecuniary  interest.    Hence  the  sale  of  a  ness,    and   have   made  valuable,  may   be 

trade  with  the  good-will  leaves  the  vendor  treated  as  of  the  nature  of  good-will^  see 

at  liberty  to  set  up  the  same  trade  in  any  post. 
other   situation.      Shackle    v.    Baker,    14 

refrain  from  competing,  or  from  carrying  on  business  in  the  neighborhood,  this  agree- 
ment will  be  enforced  by  the  court.  Bassett  v.  Pereival,  5  All.  345  ;  Angier  v.  Weblier, 
14  All.  211  ;  Grow  v.  Seligman,  47  Mich.  607  ;  Williams  v.  Farrand,  88  Mich.  473,  50 
N.  W.  446.     See  Vernon  v.  Hallam,  34  Ch.  D.  748. 


240  THE    LAW    OF    PARTNERSHIP.  [CH.    VII. 

by  the  law,  although  it  often  is  by  parties  themselves,  (?/) 
and  might  be  so  valued  without  difficulty  in  equity,  although 
it  is  said  that  a  contract  for  the  sale  of  a  good-will  will  not  be 
enforced  in  equity.  (•?;)  The  executor  of  a  deceased  partner  can 
realize  the  share  of  the  deceased  in  the  good-will,  only  wlicn 
he  can  compel  a  sale  of  the  stock  and  premises,  and  then  the 
good-will  goes  with  them,  (iv)  For,  as  a  general  rule,  by  the 
conveyance  of  a  shop  or  store,  the  good-will  of  the  business 
carried  on  in  it  passes,  although  nothing  is  said  about  the  good- 
will. (.?■)  And  if  an  executor  cannot  compel  a  sale  of  the  premises, 
or,  as  it  seems,  if  the  premises  are  not,  in  fact,  sold,  the  exe- 
cutor gets  no  advantage  from  the  good-will,  for  that  remains 
entirely  with  the  surviving  partners  who  carry  on  the  same 
business  in  the  same  place.  And  if  tlie  executor  attempts  to  use 
the  name  of  the  old  firm  in  such  wise  as  to  secure  to  himself  a 
portion  of  the  good-will,  it  is  said  that  he  will  be  restrained  by 
injunction.  (3/)  But  this  can  only  apply  so  far  as  to  prevent 
fraud  on  his  part.  If  he  continues  the  same  business  in  another 
place,  and  advertises  the  fact  that  he  is  the  executor  of  a  partner, 
and  carries  it  on  with  the  same  facilities  and  the  same  advantage 
to  customers  as  was  done  by  the  old  partnership,  there  is  cer- 
tainly no  right  in  the  surviving  partners,  who  hav-e  paid  nothing 
for  the  good-will,  to  })revent  his  doing  so. 

From  these  and  similar  difficulties,  it  has  been  said  by  high 
authorities  that  the  good-will  of  a  business  is  not  partnership 
property,  and  remains   wholly  with  the  surviving  partners,  (z) 

(«)   Hairison    v.    Gardner,     2     Madd.  (>)  Chissum   v.    Dewes,    5    Russ.    29. 

108.  See  Kennedy  v.  Lee,  3  Meiiv.  441,  452. 

(y)  In  Baxter  v.  Connoly,  1  Jac.  &  W.  (v)   Lewis    v.    Langdon,    7    Sim.    421. 

580,    Lord   Eldon  said:  "The  court  cer-  See  Staats  v.  Howlett,  4  Denio,  559.     A 

tainly  will  not  execute  a  contract  for  the  retired   paitner,  who  sets  up  in  business 

sale  of  a  good-will ;    at  the  same  time,  it  on  his  own  account,  will  not  be  allowed 

will  not  enjoin  against  any  y)roceeding  at  so  to  advertise  Lis  former  connection  as  to 

law  under  such  an  agreement.     Suppose,  lead  the  public  to  believe  that  he  is  car- 

for  instance,    there  is  a  contract  for  the  rying   on   the  business   of  the   old   fii'm. 

good-will  of  a  shop ;    it  cannot  be  con-  Hookham   v.  Pottage,    L.    R.    8   Ch.  91. 

veyed,  and  the  court  would  say,  (^o  and  Nor  will   a  partner  continuing  the  busi- 

make  what  you  can  of  it  at  law  ;    if  you  ness  be  allowed  to  use  the  old  firm  name, 

can  recover,  very  well,  we  won't  prevent  to  the  prejudice  of  the  retiring  partner. 

you  ;    if  you  cannot,  very  well   again,  we  McGowan,  &c.  Co.,  v.  McGowan,  22  Ohio 

won't    assist   you."      Coslake   ■;;.    Till,    1  St.  370.     See  also,  as  to  use  of  firm  name 

Russ.  376,  378  ;  Bozon  v.  Farlow,   1  Mer.  alter  dissolution,  Benninger  v.  Clarke,  10 

459.     See  Shackle  v.  Baker,  14  Ves.  468.  Abb.  Pr.  n.  s.  264. 

(w)  Crawshay  v.   Collins,  15  Ves.  224,  {z)   In   Hammond  v.  Douglas,    5  Ves. 

227  ;    Featherstouhaugh    v.    Fenwick,    17  539,  tlie  Lord  Chancellor,  Loughborough, 

Ves.    309,    312;    Dougherty  r.    Van   Nos-  "was   clearly   of    opinion,    that   upon    a 

trand,  1  Hotf.  Ch.  70.  partnership  without  articles  the  good-will 


§  181-] 


RIGHTS    AND    DUTIES    OF    PARTNERS. 


241 


Wc  cannot  but  think,  however,  that  an  American  decision  affirm- 
ing it  to  be  partnership  property,  and  capable  of  division,  rests  on 
better  reason. (a)  And  it  would  always  be  in  the  power  of  equity 
to  ascertain  its  value,  by  evidence  offered  to  a  Master;  or,  at 
least,  if  there  can  be  no  agreement,  by  a  sale  of  the  good-will, 
and  if  that  be  inseparable  fj-om  the  shop  or  store,  then  that  mio-ht 
be  sold  also,  for  this,  if  for  no  other  reason.  It  has  been  held,  in 
another  American  case,  that  a  receiver  of  a  partnership  may  be 
directed  by  the  court  to  carry  the  business  on,  in  order  to  pre- 
serve a  valuable  good-will,  (b) 

A  distinction  has  been  taken  in  this  respect  between  the 
good-will  of  a  partnership  in  trade,  and  that  of  a  profcssioiial 
partnership.  Lawyers  or  physicians  may  become  partners ;  but 
the  good-will  attached  to  such  a  firm  must  be  considered  more 
as  a  i)ersonal  than  as  a  local  thing,  (c)  It  is  not  a  probability 
that  the  old  customers  will  go  to  the  old  place,  but  to  the  same 
persons,  wherever  they  may  be.  And,  if  one  died,  it  would  be 
very  hard — as  has  been  said  by  an  English  equity  judge  —  to 
require  the  other  to  give  up  his  business  and  sell  out,  in  order  to 
determine  the  value  of  the  good-will,  (d)  And  probably  the 
business-office  which  successful  lawyers  or  physicians  had  occu- 


survives  ;  and  a  sale  of  it  cannot  be  com- 
pelled by  the  representatives  of  the  de- 
ceased partner,  being  the  right  of  the 
survivor,  which  the  law  gives  him  to  carry 
on  the  trade.  It  is  not  partnership  stock 
of  which  the  executor  may  compel  a 
division."  See  Lewis  ('.  Laugdon,  7  Sim. 
421.  Chancellor  Kent  gives  his  sanction 
to  this  doctrine  ;  3  Kent  Comm.  [64]  ; 
and  though  it  was  doubted  b}'  Lord  Eldon 
in  Crawshay  v.  Collins,  15  Ves.  224,  227, 
yet  this  doubt  has  been  considered  over- 
ruled by  the  case  of  Lewis  v.  Langdon, 
supra. 

(a)  Dougherty  v.  Van  Nostrand,  1 
Hoff.  Ch.  68. 

{b)  JIarten  v.  Van  Shaick,  4  Paige, 
479.  The  court  directed  the  receiver  to 
carry  on  the  business  in  this  case ;  the 
very  thing  which  was  considered  by  the 
Vice-Chancellor  in  7  Sim.  421,  to  he 
beyond  the  power  of  equity,  and  there- 
fore to  show  that  the  good-will  of  a  busi- 
ness could  not  belong  to  the  firm,  but 
remained  to  the  survivor.  See  AVilliams 
V.  Wilson,  4  Sandf.  Ch.  379. 

(c)  Though,  for  the  reason  stated  in 
the  text,   there   is  properly   speaking  no 


good-will  belonging  to  professional  part- 
nershij)S,  yet  it  is  very  common  for  at- 
torneys, solicitors,  physicians,  &c.,  to 
agi-ee,  upon  selling  out,  to  secure  their 
customers  to  those  who  succeed  them. 
The  policy  of  sanctioning  agreements  of 
this  character  has  been  doubted.  But 
their  validity  is  not  questioned  ;  though 
equity,  it  seems,  will  not  specifically  en- 
force them.  Candler  v.  Candler,  Jac. 
231  ;  Whittaker  v.  Howe,  3  Beav.  389, 
393  ;  Bozon  v.  Farlow,  1  Meriv.  459. 

(d)  Farr  v.  Pearce,  3  Madd.  78.  Here, 
Farr  &  Pearce  had  been  partners  in  the 
business  of  surgeon,  apothecary,  &c.,  un- 
der articles.  Sir  John  Leach,  V.  C,  said: 
"When  such  jiartnerships  determine,  un- 
less there  be  stipulations  to  the  contrary, 
each  must  be  at  liberty  to  continue  his 
own  exertions ;  and,  where  the  deter- 
mination is  by  the  death  of  one,  the 
right  of  the  survivor  cannot  be  affected. 
Such  jiartnerships  are  very  different  from 
commercial  partnerships."  Another  case 
is  mentioned  by  Collyer  as  having  been 
decided  on  the  same  principle.  Spicer  v. 
James,  Rolls,  M.  T.  1830;  Coll3'er  ou 
Part.  §  164. 


16 


242  THE   LAW   OF   PARTNERSHIP.  [cn.    VII. 

pied  would  bring  but  little  more  for  their  occupancy.  Tliere  are 
instances  which  might  fall  between  these  in  this  respect.  The 
business  of  an  apothecary,  in  this  country,  is  almost  altogether 
commercial.  In  England,  it  is,  in  great  proportion,  the  business 
of  a  medical  practitioner.  Here,  therefore,  the  good-will  might 
be  treated  as  a  commercial  one  ;  there,  as  a  professional  one.  (e) 

§  182.  Trade  Name  and  Trade-Marks.  —  The  question  of  the 
right  to  use  a  trade  name  has  come  before  the  courts,  and  it 
would  seem  that  this  could  not  be  treated  as  of  the  nature  of 
good-will,  or  as  a  valuable  interest  which  the  court  could  recog- 
nize and  protect,  mainly  from  the  want  of  adequate  power  in  a 
court.  (/)  ^     But  of  late  years  new  and  excellent  principles  and 

(c)  See   Farr  v.   Pearce,   in   preceding  And  in  Holden  v.  M'Miikin,  1  Pars.  Sel. 

note.     In   16  Am.  Jur.  87,  the  good-will  Cas.  270,  282,  it  is  held  that  a  newspaper 

of  a  newspaper  establishment  is  consid-  is  subject  to  the  same  rule  as  a  commer- 

ered  to  stand  on  the  same  footing  as  the  cial  partnership. 

good-will  of  a  professional  business.     See  (/)  See  Lewis  v.  Langdon,  7  Sim.  421; 

Keene  v.  Harris,  cited  in  17  Ves.  338,  342.  "Webster  v.  Webster,  3  Swanst.  490. 

1  Firm  name.  We  have  already  seen  (ante,  §  97)  that  it  is  the  right  of  a  partner- 
ship to  take  any  name  it  pleases ;  and  this  name  may,  in  the  absence  of  statute, 
include  the  names  of  persons  not  partners,  and  of  none  who  are  partners.  This  is 
sometimes  forbidden  by  statute  (ante,  §  176).  The  right  of  a  firm  to  include  in  its 
firm  name  the  name  of  a  person  not  a  member  is  however  subject  to  exceptions.  Thus 
it  is  provided  by  statute  in  Massachusetts  (Pub.  Stats,  ch.  76,  §  6)  that  no  one  can 
use  the  name  of  another  in  business  without  the  written  consent  of  the  person  named 
or  his  representative.  Whether  the  name  used  is  that  of  any  particular  bearer  of  the 
name  is  a  question  of  fact,  to  be  proved  by  the  person  objecting.  Hallett  v.  Cum- 
ston,  110  Mass.  29.  When  consent  is  thus  given  to  a  ])erson,  who  aftervvaids  takes  a 
partner,  the  latter  cannot  continue  the  use  of  the  name  after  the  death  of  him  to  whom 
the  consent  was  given.  Lodge  v.  Weld,  139  Mass.  499,  2  N.  E.  95.  Even  in  the  absence 
of  statute,  the  use  of  the  name  of  a  retiring  partner  in  a  firm  name,  in  such  a  way  as 
to  subject  the  retiring  partner  to  liability  or  to  the  possibility  of  being  sued,  may  be 
restrained  by  him.  Scott  v.  Rowland,  26  L.  T.  Rep.  391 ;  Gray  v.  Smith,  43  Ch.  D. 
208  (C.  A.);  Peterson  v.  Humphrey,  4  Abb.  Pr.  394  ;  McGowan  Bros.  P.  &  M.  Co.  v. 
McGowan,  22  Ohio  St.  370. 

Where  a  firm  name  has  been  adopted  and  used  by  a  partnership,  it  may  have  ob- 
tained a  value  in  itself,  similar  to  the  value  of  a  good- will  or  of  a  trade-mark,  which  the 
court  ought  to  protect.  And  during  the  life  of  the  firm  the  name  will  be  so  protected, 
by  preventing  strangers  who  have  no  right  to  do  so  from  using  it.  This  will  be  done 
as  a  matter  of  course  if  the  name  is  not  that  of  the  party  who  adopts  it.  Other  con- 
siderations, however,  ay)ply  when  the  person  to  be  restrained  himself  bears  the  name 
used.  No  man  can  be  restrained  from  using  his  own  name  in  business,  simply 
because  another  has  a  right  to  use  the  same  name  in  the  same  business  ;  in  order 
to  have  him  restrained  from  using  his  own  name  it  must  be  shown  that  the  use  com- 
plained of  is  for  the  purpose  and  with  the  effect  of  deceiving  the  public.  Burgess  v. 
Burgess,  3  DeG.  JL  &  G.  896;  Turton  v.  Turton,  42  Ch.  D.  128;  Iowa  Seed  Co.  v.  Dorr, 
70  la.  481,  30  N.  W.  866  ;  Russia  Cement  Co.  v.  Lepage,  147  Mass.  206,  17  N.  E.  304  ; 
Meneely  v.  Meneely,  62  N  Y.  427;  Carmichel  v.  Latimer,  11  R.  1.  395.  "Where  a 
person  is  selling  goods  under  a  particular  name,  and  another  person,  not  having  that 
name,  is  using  it,  it  may  be  jiresumed  that  he  so  uses  it  to  represent  the  goods  sold  by 
himself  <as  the  goods  of  the  person  whose  name  he  uses  ;  but  where  the  defendant  sells 
goods  under  his  own  name,  and  it  happens  that  the  plaintiff  has  the  same  name,  il 


182.] 


RIGHTS    AND    DUTIES   OF    PARTNERS.  243 


rules  have  been  adopted  in  England  and  in  this  country  in 
respect  to  trade-marks,  They  are  considered  property,  so  far 
that  parties  using  them  falsely  and  injuriously  are  now  cer- 
tainly liable  in  damages  to  those  who  have  a  right  to  them,  and 

does  not  follow  that  the  defendant  is  selling  his  goods  as  the  goods  of  the  plaintiff.  It 
is  a  question  of  evidence  in  each  ease  whether  there  is  false  representation  or  not."  Tur- 
ner, L.  J.,  in  Burgess?;.  Burgess,  3  DeG.  M.  &  G.  89C,  905.  One  who  has  disposed  of  the 
right  to  use  his  own  name  as  a  quasi-tTade-mark  may  however  be  restrained  from  using 
it  himself.  Horton  Mfg.  Co.  v.  Horton  Mfg.  Co.  18  F.  K.  816 ;  Kussia  Cement 
Co.  V.  Lepage,  147  Mass.  206,  17  N.  E.  304.     See  McLean  v.  Fleming,  96  L'.  S.  245. 

The  most  difficult  question  as  to  the  right  in  a  firm  name  arises  upon  dissolution, 
upon  a  sale  of  the  whole  or  j)art  of  a  business..  The  better  view  wouhl  apju-ar  to  be 
that  the  purchaser  of  a  business  gets  no  right,  without  an  exj)ress  agreement,  to  use 
tlie  name  of  the  selling  firm  :  whether  he  is  a  stranger  or  one  of  the  selling  firm. 
Gray  v.  Smith,  43  Ch.  D.  208  (C.  A.);  Horton  Mfg.  Co.  v.  Horton  Mfg.  Co.,  18  F.  R. 
816  (scmble);  Williams  i-.  Farrand,  88  Mich.  473,  50  N.  W.  446.  But  .see  Levy  u. 
Walker,  10  Ch.D.  436  (C.  A.);  Holmes  v.  Holmes,  B.  &  A.  Mfg.  Co.,  37  Conn.  278  ; 
Adams  v.  Adams,  7  Abb.  N.  C.  292.  Nor  can  the  purchaser  advertise  himself  as 
"successor"  of  the  seller.  Williams  r.  Farrand,  88  Mich.  473,  50  N.  W.  446; 
Morgan  v.  Schuyler,  79  N.  Y.  490.  If  it  is  desired  to  secure  the  right  to  use  the  firm 
name,  the  purchaser  should  get  an  agreement  tliat  he  may  use  it.  Where  such  an 
agreement  is  made,  the  purchaser  cannot  in  his  turn  (unless  the  name  is  a  trade-mark) 
transfer  his  right  to  use  it  to  another.  Horton  Mfg.  Co.  v.  Horton  ilfg.  Co.,  18  F.  R. 
816.  See  Lodge  v.  Weld,  139  Mass.  499,  2  N.  E.  95.  Whether  the  right  to  the  use 
of  the  name  passes  or  not  is  often  immaterial.  If  the  name  is  composed  of  the 
surnames  of  individuals,  it  is  clear  that  no  one  that  does  not  bear  the  name  can 
object  to  the  use  of  it.  Rogers  v.  Taintor,  97  Mass.  291.  Unless,  therefore,  the 
name  were  used  in  such  a  way  as  to  deceive,  the  purchaser  could  not  usually  be  pre- 
vented from  using  it. 

Where  there  is  a  dissolution,  but  no  sale  of  the  business,  the  question  is  more  free 
from  dilHculty.  If  a  firm  is  dissolved  during  the  lifetime  of  the  partners,  with  no 
provision  as  to  the  use  of  the  firm  name,  it  seems  clear  that  either  partner  may  use 
the  old  firm-name,  as  he  is  entitled  to  continue  the  business,  subject  to  the  limita- 
tion, however,  that  he  must  not  involve  his  copartner  in  liability.  Banks  v.  Gibson, 
34  Beav.  566  ;  Caswell  v.  Hazard,  121  N.  Y.  484,  24  N.  E.  707.  But  it  would  seem 
to  be  in  the  power  of  either  partner,  by  filing  a  bill  for  an  account,  to  have  the  value 
of  the  fimi  name  brought  into  the  firm  assets. 

It  has  been  decided  in  some  cases  that  the  right  to  use  the  firm  name  survived  ; 
and  since  a  surviving  partner  could  not  subject  the  estate  to  any  liability  by  using  it, 
he  might  do  so.  Lewis  v.  Langdon,  7  Sim.  421  ;  Robertson  v.  Quiddington,  28  Beav. 
529  ;  Staats  v.  Hewlett,  4  Den.  559.  But  it  would  seem  that  if  the  name  has  any 
value,  the  firm  and  not  the  surviving  partner  is  entitled  to  the  benefit  of  it  ;  and 
therefore  that  if  the  surviving  partner  continues  to  use  the  firm  name  the  estate  of  the 
deceased,  while  not,  perhaps,  entitled  to  prevent  the  use  of  it,  may  require  the  survivor 
to  account  for  its  value.  Fenn  v.  Bolles,  7  Abb.  Pr.  202.  The  earlier  cases  must 
probably  be  considered  overruled,  along  with  the  old  decisions  which  held  that  the 
good-will  survives. 

A  former  partner,  whether  or  not  he  has  disposed  of  the  good-will  and  right  to  the 
firm  name,  may  in  a  proper  manner  advertise  his  connection  with  the  old  firm,  as  that 
he  is  "  late  of"  the  firm.  Williams  v.  Farrand,  88  Mich.  473,  50  X.  W.  446  ;  Binin- 
ger  V.  Clark,  60  Barb.  113  ;  Peterson  v.  Humphrey,  4  Abb.  Pr.  394.  But  this  may 
not  be  done  in  a  way  to  deceive  the  public,  as  by  making  the  words  "late  of"  so 
inconspicuous  as  to  be  overlooked.  Hookham  v.  Pottage,  L.  R.  8  Ch,  91 ;  Smith  v. 
Abbott,  5  Abb.  N.  C.  274. 


244  THE    LAW    OF   PARTNERSHIP.  [CH.    VII. 

equity  will  restrain  tliis  unlawful  use.  Qg)  ^  We  cannot  but 
think  that  this  right  partakes  so  much  of  the  nature  of  good-will 
that  it  will  be  included  within  that  term,  or  otherwise  recognized 
and  jirotccted  by  courts,  if  they  have  power  to  do  so.  {h)  Of  copy- 
rights and  patent-  rights  no  question  is  made :  they  often  form 
a  valuable  portion  of  the  stock  of  bookselling  and  other  com- 
mercial partnerships.  (^) 

§  183.  Lien  of  Partner  on  Firm  Property.  —  It  is  said  in  some 
cases,  and  in  text-books  of  high  authority,  that  each  ])artner  has 
a  lien  on  the  common  property,  first,  to  secure  the  payment  of 
the  common  debts,  for  which  each  partner  is  liable  in  solido, 
and  then  to  secure  to  him  his  own  share  in  the  partnership  prop- 
erty, after  the  debts  are  all  paid.  And  it  is  also  said  that  this 
lien  may  be  followed  out,  and  made  to  attach,  in  some  cases, 
to  the  proceeds  of  partnership  property,  which  has  been  wrong- 
fully sold.  We  should  consider  this  topic  here,  but  it  is  closely 
connected  with  another  principle  generally  stated  with  it ; 
namely,  that  it  is  through  this  lien  that  the  right  of  creditors  of 
the  partnership  to  the  property  of  the  partnership,  as  pledged  to 
the  payment  of  their  debts,  is  to  be  worked  out. 

This  is  much  the  most  important  aspect  of  this  topic  of  lien, 
in   a   practical  point  of   view ;  and,   regarding   the   doctrine  of 

((/)  The  right  and  property  of  a  firm  to  note  to  2  Kent  (9th  ed.),  [372].     See  also 

and  in   a  trade-mark  are   of   course   the  6  West.  L.  J.  337. 

same  as  that  of  an  individual.     The  fol-         (h)  In  Hine  y.  Lart,  10  Jur.  106,  it  seems 

lowing    cases    upon    the    general  subject  to  have  been  considered  by  the  court  that 

may   be   consulted    as    exemplifying   the  a  trade-mark   was   partnership  property, 

proposition    of  the  text.      Taylor  v.  Car-  See    Lewis    v.    Langdon,     7     Sim.     421. 

penter,    2   Woodb.    &    ]\I.    1  ;    11    Paige,  Equity  will  not  however  decree  the  sale 

292,    2    Sandf.    Ch.    603,    3   Story,  458 ;  of  a  partner's  interest  in  a  firm  brand  or 

Amoskeag  llauufacturing  Co.  v.  Spear,  2  trade-mark,  its  value  being  too  insubstan- 

Sandf.  599  ;    Coats  v.  Holbrook,  2  Saudf.  tial  upon  which  to  set  a  value.     Taylor  v. 

Ch.  586  ;  Knott  v.  Morgan,  2  Keene,  213;  Bemis,  4  Biss.  406. 

Rodgers  v.  Nowell,  5  C.  B.  109  ;    Farina  (i)  Parkhurst  v.   Kinsman,  1   Blatchf. 

V.   Silverlock,    1    DeG.   &  J.    434.     The  488,  495 ;    Penniman  v.  Munson,  26  Vt. 

cases  are  well  collected  and  examined  in  164;    Lovell   v.   Hicks,   2  Younge   &   C. 

481. 

^  Trade-murks.  When  one  buys  another's  interest  in  a  business  he  buys  the  right 
to  use  and  to  prevent  others  from  using  the  trade-marks  belonging  to  the  business. 
Publishing  Co.  v.  Gage,  11  Can.  306  ;  Hall  v.  Barrows,  33  L.  J.  Ch.  204  ;  Hoxie  v. 
Chaney,  143  Mass.  592,  ION.  E.  713  ;  Williams  v.  Farrand,  88  Mich.  473,  50  N.W.  446  ; 
Merry  v.  Hoopes,  111  N.  Y.  415,  18  N.  E.  714.  Though  a  mere  sale  of  the  chattels  or 
real  estate  of  the  business  by  one  partner  to  another  without  any  agreement  as  to  the 
business,  does  not  carry  with  it  an  exclusive  right  to  the  good-will  or  trade-marks:  and 
the  selling  partner  may  use  the  latter.  Smith  v.  Walker,  57  Mich.  456,  24  N.  W. 
830,  26  N.  W.  783  ;  Huwer  v.  DannenhofFer,  82  N.  Y.  499  ;  Hazard  v.  Caswell,  93 
N.  Y.  259.     See  Kidd  v.  Johnson,  100  U.  S.  617,  620. 


§  183.]  RIGHTS    AND    DUTIES    OF    PARTNERS.  245 

lien  as  of  more  moment  to  the  creditors  than  to  the  partners 
themselves,  we  defer  the  consideration  of  it  until  we  treat  of 
the  rights  and  remedies  of  third  persons  against  the  firm.  And 
then  we  shall  state  our  dissent  from  some  of  the  views  fre- 
quently expressed  of  this  lien,  and  endeavor  to  show  how  it 
needs  to  be  qualified  or  modified  before  it  can  harmonize  with 
the  law  of  partnership,  or  the  general  law-merchant. 


246  THE   LAW    OF   PARTNERSHIP.  [CH,    Vlli 


CHAPTER   Yin. 

OF    THE   REMEDIES   OF   PARTNERS    INTEK   SE. 

SECTION    I. 
GENERAL    CONSIDERATIONS. 

§  184.  Nature  of  Action  by  or  against  Partnership.  —  The  rela- 
tion of  partners,  and  the  legal  status  of  a  partnership,  are 
peculiar ;  and  the  remedies  which  each  partner  has  against 
another  are  equally  so,  and  it  is  sometimes  difficult  to  define 
them.  A  partnership  is  not  a  corporation,  nor  a  legal  person ; 
and  yet  the  common  law  yields  so  far  to  the  reasons  and  necessi- 
ties of  the  law-merchant  as  to  consider  the  partnership  as  a  quasi 
corporation,  or,  at  least,  to  recognize  it  as  having  some  kind  and 
measure  of  personality.  Perhaps  it  might  be  better  if  our  law, 
like  the  Scotch  law  (founded  on  the  civil  law),  carried  this  per- 
sonality so  much  farther  as  to  permit  actions  by  or  against  the 
firm,  without  reference  to  the  individual  partners,  (a)  In  some 
instances,  it  might  be  useful  and  safe  to  permit  (as  the  Scotcli  law 
permits)  (aa)  a  partner  to  proceed  against  a  partnership,  or  the 
firm  against  a  partner,  much  as  may  be  done  in  the  case  of  a  cor- 
poration. Nothing  of  that  kind  is  known  to  the  common  law  ;  (b) 
and  it  may  be  that  equity  has  now  established  principles  and 
methods  which  practically  answer  as  well.^      But  in  equity  an 

{r,)  2  Bell  Comer.  Bk.  7,  V.  p.  510  Tinal   v.    Bright,    Minor,    103;    Estes   v. 

(fijt)  Ibid.  AVhipple,   12  Vt.  373  ;  Bracken   v.   Ken- 

(b)  Upon  the  ground,   that   the  same  ncdy,  4   111.  558,   564  :    Myrick  v.  Dame, 

person  cannot  in  the  same  suit  be   both  9   Cush.    248,   254  ;  Homer  v.  Wood,   11 

])laintiff     and    defendant    of  record,    no  Cush.  66  ;  Banks  r.  Mitchell,  8  Yeig.  111. 

action  can  be  maintained  between  one  and  Though  a  partner,  payee  of  a   negotiable 

the  firm  of  which  he  is  a  member.      De  note  made    by  his   firm,  cannot   sue   the 

Tastet  V.  Shaw,  1  B.  &  Aid.  664  ;  Neale  v.  makers,  his  indorsee  may  recover  upon  it. 

Turton,  4  Bing.  149  ;  Teague  v.  Hubbard,  Smith  v.  Lusher,  5  Cow.  688  ;  Thayer  v. 

8  B.  &  C.  345  ;  Chadwick  v.  Clarke,  1  C.  Buffum,  11  Met.  398  ;  Davis  i-.  Briggs,  39 

B.  700;  Westcott  v.  Price,  Wright,  220  ;  Me.    304  ;  Fulton  v.   Williams,   11  Cush. 

1  Where  a  partner  makes  a  loan  to  the  firm  and  takes  a  firm  note,  although  of 
course  he  cannot  sue  the  firm  upon  it,  it  is  a  perfectly  valid  note.      If  he  indorses 


§  185.]  OF    THE    REMEDIES    OF    PARTNERS    INTER    SE.  247 

action  to  recover  money  wrongfully  paid  to  defendant  by  a  partner 
should  make  the  defaulting  partner  a  party.  (66)  In  this  country, 
where  equity  and  law  have,  in  many  States,  approached  closely 
together,  and  seem  to  be  tending  towards  unity,  there  may  be 
still  less  need  of  any  remedies  in  addition  to  those  now  made  use 
of.  But  many  questions  in  the  use  of  these  remedies  certainly 
demand  better  and  more  certain  answers  than  can  now  be  made. 
They,  however,  can  be  given  authoritatively  only  by  adjudication, 
or  by  legislation. 

§  185.  Partnership  Questions  not  generally  cognizable  at  Law.  — 
As  a  general  rule,  the  law  will  not  take  cognizance  of  questions 
which  relate  to  the  partnership  between  living  partners,  (c)  ^     The 

108,  110.  So,  if  the  partmn-ship  be  payee  v.  Lyman,  1  Story,  423.  But  the  assignee 
of  a  note  madi;  by  one  of  tlu;  partners,  the  of  a  partner  who  is  tlie  payee  of  a  no7i- 
technical  impediment  to  a  suit  on  the  ncyotiable  note  made  by  tlie  partnership, 
note  is  removed  by  actual  negotiation,  and  cannot  sue  on  the  note,  since  his  assignor 
tlie  holder  may  claim  a  valid  title  through  could  not.  Hill  v.  McPherson,  15  Mo.' 
the  indorsement  of  the  firm.  Per  Shaw,  204.  If  a  firm  is  the  first  indorser  of  a 
C.  J.,  in  Parker  v.  Macomber,  18  Pick,  note,  the  holder,  being  a  partner  therein, 
509.  See  Babcock  v.  Stone,  3  McLean,  cannot  sue  a  subsequent  indorser  on  the 
172.  And  where  one  wlio  is  a  member  of  note  :  it  being  a  good  answer  to  the  suit 
two  firms  makes  a  promissory  note  in  the  of  the  holder,  that,  as  a  member  of  the 
name  of  one  firm,  payable  to  a  person  who  copartnership,  he  stands  in  the  relation 
is  a  member  of  the  other  firm,  tlie  payee  of  a  prior  indorser.  Decreet  v.  Burt,  7 
may  sue  and  recover  upon  it  at  law  ;    and     Cush.  551. 

the  admissions  of  the  common  member  of  (hb)  Atkinson  v.  Mackreth,  L.  R.  2  Eq. 

both  firms  cannot  be  given  in  evidence  570  ;  [Penniman  v.  Jones,  58  N.  H.  447  ] 
to  defeat  a  recovery  on    the  instrument.  (c)  Or    as    the    rule    is  laid  down  by 

Moore  v.  Gano,  12  Ohio,  300.  See  Baring  Abbott,  C.  J. :  "  One  partner  cannot  main- 
it  to  a  purchaser  for  value,  the  latter  may  recover  upon  it.  Roberts  v.  Ripley,  14 
Conn.  543  ;  Cutting  v.  Uaigneau,  151  Mass.  297,  23  N.  E.  839  (semblc)  ;  Walker 
V.  Wait,  50  Vt.  t)68.  But  the  mere  assignee  of  such  a  note  or  other  claim  cannot 
sue,  since  he  must  do  so  in  the  name  of  his  assignor.  Davis  v.  Merrill,  51  Mich. 
480,  16  N.  W.  864.  Except  in  jurisdictions  where  an  assignee  of  a  claim  may  sue 
in  his  own  name.     Frank  v.  Anderson,  13  Lea,   695. 

But  where  a  firm  note  to  a  partner  is  merely  indorsed  to  a  formal  party  for 
purposes  of  suit,  it  is  of  course  subject  to  all  equities  that  exist  against  the  part- 
ner. Wintermute  v.  Torrent,  83  Mich.  555,  47  N.  W.  358.  And  it  would  seem 
that  it  could  not  in  this  case  be  enforced  at  all,  since  the  partner's  claim  is  always 
sulijeet  to  the  state  of  accounts  between  the  firm  and  the  partners.  Thompson  v. 
Lowe,  111  Ind.  272,  12  N.  E.  476  ;  Cutting  v.  Daigneau,  151  Mass.  297,  23  N,  E. 
839.      But  see  Carpenter  v.  Greenop,   74  Mich.  6G4,  42  N.   W,  276. 

So  where  a  partner  borrows  money  from  the  partnership  and  gives  a  note, 
though  the  firm  cannot  sue,  its  indorsee  may  do  so  ;  and  in  those  jurisdictions 
where  an  assignee  of  a  chose  in  action  may  sue  in  his  own  name,  one  to  whom 
the  mere  claim  of  a  firm  against  a  partner  for  borrowed  money  is  assigned  may 
sue  the  partner.  Bank  of  British  N.  Amer.  v.  Delafield,  126  N.  Y.  410,  27  N.  E. 
797  ;  (especially,  as  the  court  says,  where  the  partner  is  shown  to  be  indebted  to  the 
firm  in  a  much  larger  amount.) 

1  Until  accounts  are  settled   and  a  balance   struck,  one  partner  cannot  maintaia 


248  THE   LAW   OF   PARTNERSHIP.  [CH.    VIII. 

reasons  for  this  are  substantial  and  of  much  weight.  One  is, 
that  if  a  partner  calls  on  another  to  acknowledge  or  satisfy  any 

tain  au  action  against  his  copartner  for  maintain  no  action  against  the  partnership 
work  and  labor  performed,  or  money  for  the  amount  of  his  expenditures,  because 
expended  on  account  of  tlie  ])artnership."  he  cannot  be  both  plaintilf  and  defendant 
Hohnes  v.  Higgins,  1  B.  &  C.  76.  It  is  of  record  ;  nor  against  his  cojjartners,  for 
unnecessary  to  adduce  here  the  numerous  the  reason  stated  hereafter  in  the  text,  that 
authorities  upon  tliis  point ;  for,  as  is  until  an  account  of  the  partnership  con- 
said  hereafter,  the  wiiole  of  this  section  cerns  is  taken,  it  is  impossible  to  tell 
consists  simply  in  a  statement  of  the  whether  he  is  really  a  debtor  or  creditor  of 
exceptions  to  the  general  rule.  We  have  the  other  partners.  But,  after  a  trial  and 
already  seen  that,  for  his  personal  services  verdict  for  the  plaintiff,  it  is  too  late  for 
in  tlie  affairs  of  the  partnersliip,  as  a  the  defendant  to  object  that  the  sul)j('ct- 
general  rule,  no  partner  is  entitled  to  com-  matter  of  the  suit  was  a  copartnershi]) 
peusatiou,  even  as  an  item  of  account  contract  between  liim  and  the  ]ilaintifl'. 
between  the  partners.  For  his  advances  The  objection  should  be  made  at  the  trial, 
and  outlays  in  behalf  of  the  firm,  each  Smith  v.  Allen,  18  Johns.  24.5.  See 
partner  is,  indeed,  entitled  to  the  proper  Gomersall  v.  Gomersall,  14  Allen,  60  ; 
credits,  whenever  the  partnership  accounts  and  Crottes  v.  Frigerio,  18  La.  Ann.  283. 
are  made  up.   But  we  have  seen  that  he  can 

an  action  at  law  against  another  on  a  partnership  claim.  Broda  v.  Greenwald,  66 
Ala.  .038;  Fisher  v.  Sweet,  67  Cal.  228,  7  Pac.  657  ;  Price  v.  Drew,  18  Fla.  670; 
Bowzer  v.  Stoughton,  119  111.  47,  9  N.  E.  208;  Mereditli  v.  Ewiug,  85  Ind.  410; 
Lang  V.  Oppenheim,  96  Ind.  47  (but  see  Anderson  v.  Ackerman,  88  Ind.  481  )  ;  Hall  v. 
Clagett,  48  Md.  223  ;  Learned  v.  Ayres,  41  Mich.  677,  3  N.  W.  178  ;  Arnold  v.  Arnold,  90 
N.  Y.  580  ;  Elmer  v.  Hall,  {Pa. )  23  Atl.  971  ;  Dowliiig  v.  Clarke,  13  R.  1. 134  ;  O'Neill  v. 
Brown,  61  Tex.  34.  In  accordance  with  the  general  rule,  where  a  partner  is  to  be 
paid  for  his  services  by  the  partnership,  he  cannot  recover  the  amount  from  liis 
copartner  at  law  ;  his  only  remedy  is  an  accounting.  Holmes  v.  Higgins,  1  B.  & 
C.  74  ;  Milburn  v.  Codd,  7  B.  &  C.  419  ;  O'Brien  v.  Smith,  42  Kas.  49,  21  Pac. 
784;  Stone  v.  Mattingly,  (Ky.)  19  S.  W.  402;  Duff  v.  Maguire,  99  Mass.  300; 
Younglove  v.  Liebhardt,  13  Neb.  557,  14  N.  W.  526  ;  Weaver  v.  Upton,  7  Ired. 
458;  Hills  v.  Bailey,  27  Vt.  548.  The  same  is  true  where  a  partner  sells  goods  to 
the  firm.  Marks  v.  Stein,  11  La.  Ann.  509  ;  Remington  v.  Allen,  109  Ma.ss.  47  ; 
Course  v.  Prince,  1  Mill  C.  R.  416.  So  where  he  lends  money  to  the  firm.  Per- 
ring  V.  Hone,  4  Ring.  28  ;  Coliey  v.  Smith,  2  Moo.  &  R.  96  ;  Mickle  v.  Peet,  43 
Conn.  65  ;  Springer  v.  Cabell,  10  Mo.  640  ;  Sieghortner  v.  Weissenborn,  20  N.  J. 
Eq.  172  ;  O'Neill  v.  Brown,  61  Tex.  34.  So  where  he  leases  premises  to  the  firm. 
Pio  Pico  V.  Cuyas,  47  Cal.  174  ;  Johnson  v.  Wilson,  54  111.  419.  So  where  he 
pays  out  money  for  the  use  of  the  firm.  Sadler  v.  Nixon,  5  B.  &  Ad.  936  ;  Rob- 
son  V.  Curtis,  1  Stark.  78  ;  Goddard  v  Hodges,  1  Cr.  &  M.  33  ;  Brown  v.  Tapscott, 
6  M.  &  W.  119  ;  Ross  v.  Cornell,  45  Cal.  1-33  ;  Crossley  v.  Taylor,  83  Ind.  337  ; 
Hennegin  v.  Wilco.xon,  13  La.  Ann.  576  ;  Phillips  v.  Blatchford,  137  Mass.  jUO  ; 
Lyons  v.  Murray,  95  Mo.  23,  8  S.  W.  170  ;  Harris  v.  Harris,  39  N.  H.  45  ;  Mur- 
ray V.  Bogert,  14  Johns.  318  ;  Ives  v.  Miller,  19  Barb.  196  ;  Torrey  v.  Twombly, 
67  How.  Pr.  149  ;  McDonald  v.  Holmes,  22  Ore.  212,  29  Pac.  738  ;  Leidy  v. 
Messinger,  71  Pa.  177  ;  Fessler  v.  Hickernell,  82  Pa.  150  ;  Merriweather  v.  Harde- 
man, 51  Tex.  436. 

Nor  can  a  partner  sue  his  copartner  at  law  when  the  obligation  of  the 
latter  runs  to  the  firm.  Thus  where  a  partner  receives  mone)'  on  account  of  the 
firm,  his  copartner  cannot  bring  an  action  for  his  share.  Fromont  v.  Coujdand,  2 
Bing.  170  ;  Bovill  v.  Hammond,  6  B.  &  C.  148  ;  Russell  v.  Byron,  2  Cal.  86  ; 
Stanton    v.  Buckner,  24  La.  Ann.  391  ;    Riarl   v.  Wilhelm,  3    Gill,  356  ;    Smicii  v. 


§  185.]  OF    THE    REMEDIES    OF    PARTNERS    INTER    SE.  249 

claim  in  which  the  partnership  is  interested,  the  plaintiff  will 
cither  j)rcvail  and  recover  damages  to  which  he  must  himself 
eventually  contribute,  or  be  defeated,  and  perhaps  be  obliged  to 
pay  to  the  defendant  something  which  gives  the  plaintiff"  a  right 
to  call  at  once  on  the  defendant  to  refund  a  part  of  what  he 
pays,  (c?)  The  second  reason  is  little  more  than  a  development 
or  consequence  of  the  first.  It  is,  that  no  partner  has  a  several 
and  personal  claim  on  any  other  partner  for  any  matter  in  which 
the  partnership  is  interested,  because  neither  can  the  ])artners  be 
separated,  —  all  being  interested,  both  as  plaintiff's  and  as  defend- 
ants,—  nor  can  any  claim  or  item  of  claim  be  separated  from  the 
other  interests  of  the  partnership.  One  ])artner  may  to-day  pay 
much  more  or  much  less  than  the  sum  which  would  fall  upon  him 
to  pay,  in  proportion  either  to  the  numbers  of  the  partners,  or  to 
his  share  or  interest  in  the  concern.  But  yesterday  he  may  have 
done  just  the  reverse  ;  and  the  charge  or  credit  of  yesterday  must 
be  brought  into  connection  with  the  charge  or  credit  of  to-day, 
before  it  can  be  ascertained  whether  he  has  paid  too  much  or  too 
little,  and  therefore  whether  he  may  claim  of  the  other  partners, 
or  they  of  him.  But,  to  settle  this  question  finally  and  justly,  the 
charges  and  credits  of  all  other  days,  and  not  only  so,  but  of  all 
the  other  partners,  must  be  taken  into  consideration,  before  it  can 
be  ascertained  whether  the  plaintiff"  has  a  valid  claim  against  the 
defendant,  {e) 

(d)  Milburn  v.  Codd,  7  B.  &  C.  419,  England,  4  Mylne  &  C.  171,  172.  See 
421.  FnuK'isco  v.  Fitch,  25   Barb.  130  ;  Morin 

(e)  Lord  Chancellor  Cottenham  ex-  v.  Martin,  25  Mo.  360 ;  Hammond  v. 
plains  the  disability  of  partners  to  sue  Hammond,  20  Ga.  556  ;  Wiggiii  v.  Cum- 
each   other,    in    Richardson    v.   Bank    of     niings,  8  Allen,  153. 


Smith,  33  Mo.  557  (see  Bethel  v.  Franklin,  57  Mo.  466)  ;  Towle  v.  Meserve,  38 
N.  H.  9;  Young  v.  Brick,  3  N.  J.  L.  (2  Penn.)  664;  Graham  v.  Holt,  3  Ired. 
300  ;  Devore  v.  Woodruif,  1  N.  Dak.  143,  45  N.  AV.  701.  See  Wright  v.  Cobleigh, 
21  N.  H.  339  (statutory).  So  where  a  jiartner  buys  goods  of  the  firm,  no  action 
can  be  brought  against  him  for  the  price  of  the  goods  by  his  copartner.  Page  v. 
Thompson,  33  Ind.  137  ;  Ivy  v.  Walker,  58  Miss.  253.  But  see  Bennett  v.  Smith, 
40  Mich.  211. 

But  in  some  jurisdictions  one  partner  is  allowed  to  maintain  an  action  for 
liis  share  of  the  profits  where  the  accounts  may  be  easily  adjusted,  as  where  all  the 
debts  are  paid,  and  nothing  remains  but  to  ascertain  to  whom  the  balance  is  due. 
See  post,  §  194;  Clarke  v.  Mills,  36  Kas.  393,  13  Pac.  569;  Wheeler  v.  Arnold, 
30  Mich.  304  ;  Aldrich  v.  Lewis,  60  Miss.  229.  This  is  not  infrequently  allowed 
where  the  partnership  was  in  a  single  tranisaction.  Finlay  v.  Stewart,  56  Pa.  183  ; 
Meason  v.  Kaine,  63  Pa.  335  ;  Kutz  v.  Dreibelbis,  126  Pa.  335,  17  Atl.  609  ;  Fry 
V.  Potter,   12  R.  L   542. 

See  an  exhaustive  collection  of  the  authorities,  Ames,  Cas.  Part.  p.  451,  n. 


250  THE    LAW    OF    PARTNERSHIP.  [CH.    VIII, 

The  ol)jections  to  the  cognizance  by  law  of  the  claim  of  a  part- 
ner, against  a  partner  on  partnership  account,  resolve  themselves 
into  this  :  The  balance  against  every  partner,  on  parcnership 
account,  is,  like  every  other  debt  to  the  partnership,  a  part  of  the 
stock  or  property  of  the  partnership  ;  all  this  is  first  bound  to 
the  debts  of  the  firm,  and,  after  these  are  })aid,  it  all  belongs  to 
the  partners  severally,  in  due  proportion.  No  one,  therefore,  can 
make  good  his  separate  claim  or  title  to  one  of  these  debts  or 
balances,  any  more  than  he  can  to  the  sej)arate  debt  of  any  credi- 
tor of  the  firm  or  a  severed  portion  of  the  merchandise.  There 
is,  indeed,  no  separate  claim  until  adjustment  of  all  the  claims  ; 
and  therefore  no  ground  for  maintaining  such  a  suit  at  law. 

It  may  be  said  that  there  is,  in  fact,  in  each  partner  a  kind  of 
latent  but  vested  interest  in  his  share,  and  a  proportionate  claim 
au'ainst  every  partner  who  withholds  his  share;  and  that  the  pro- 
cess of  account  and  adjustment  gives  no  title,  but  only  ascertains 
its  extent  and  measure.  Something  like  this  is  true  ;  and  equity 
proceeds  on  principles  not  very  different.  But  the  common  law 
cannot,  for  tlie  reason  that  it  has  no  methods  nor  processes  by 
which  it  could  cause,  or  regulate,  or  recognize  the  account  and 
adjustment  necessary  to  define  the  personal  claim  of  each  partner. 
Certainly  it  cannot  do  this  as  easily  and  as  completely  as  equity  can 
do  it ;  and  this  is  substantially  the  reason  why  equity  has  juris- 
diction over  all  cases  of  this  kind.  (/) 

(  f)  "  It  is  a  geueral  rule,  that  between  was  due   at  the   execution   of   the   deed, 

partners,  whether  tliey  are  so  in  general  or  and  whether  the  sum  has  been  reduced  in 

for  a  particular  transaction  only,  no   ac-  any  and  what  degree  by  the  intermediate 

count  can  be  taken  at  law."     Per  Abbott,  gains  of  the  partnership  business.     Such 

C.  J.,  in  Bovill  v.  Hammond,  6  B.  &  C.  an  account  cannot  be  taken    by  a  jury, 

149,   151.      And  in   Eogers  v.   Rogers,   1  and  consequently  no  issue  could  be  taken 

Hall,  391,  it  was  expressly  held,  that  a  on    the   debt    on    which    the    defendants 

court  of  law  cannot  take  jurisdiction  of  rely."     "The  short  objection  to  this  ap- 

accounts  between  partners.     See  Harvey  plication   is,"   said    Chambre,   J.,    "that 

V.  Criekett,  5  M.  &  S.  336,  340  ;  Smith  the    court    cannot    direct    a    partnership 

V.  Barrow,  2  T.  11.  476,  478  ;  Nugent  v.  account  to  be  taken,  without  assuming  a 

Locke,    4   Cal.    318 ;    McKnight    v.    Mc-  jurisdiction  that  does  not  belong  to  it." 

Cutchen,    27  Mo.    436.     In  De  Tastet  v.  Chapman    v.    Koops,    3    B.    &    P.    289  ; 

Shaw,  1  B.  &  Aid.  664,  663,  Lord  Ellen-  Parker  v.  Pistor,    3  B.   &   P.    288.     See 

borough,  C.  J.,  delivering  the  opinion  of  Jndd    v.    Harris,    6    Vt.    185  ;    Spear    v. 

the    court,    said:     "The    only   mode    in  Newell,  13  Vt.  288;  Beach  v.  Hotchkiss, 

which  a  fact  can  be   controverted  in   an  2  Conn.  425. 

action  at  law,  namely,  by  taking  an  i.ssue  The  action  of  account  may  be  brought 

to  be  tried  by  a  jury,  is  impracticable  in  between  partners  wherever  that  action  is 

the  present  case  :   because  the  debt  con-  in  use  ;  but  it  seems  properly  applicable 

stitntes  an  item  in  a  partnership  account ;  only  wliere  the  ])artnership  has  come  to 

and    the    paitnership    account    must    be  an  end.     1  Story  Eq.  §§  659-665. 
taken  in   order  to  ascertain    how   much 


§   180.]  OF    THE    REMEDIES    OF    PARTNERS    INTER    SE.  251 

The  limits  between  legal  and  equitable  jurisdiction  in  relation 
to  questions  arising-  under  partnership  are,  on  the  whole,  suffi- 
ciently well  defined,  although  there  are  some  questions  upon 
which  an  unfortunate  degree  of  obscurity  still  rests.  We  will,  in 
the  first  place,  considijr  those  cases  of  which  courts  of  law  take 
cognizance,  and  then  those  which  are  referred  to  equity. 


SECTION    II. 

QUESTIONS    BETWEEN    PARTNERS     COGNIZABLE    AT    LAW. 

§  186.  Demands  Distinct  from  Affairs  of  Partnership. —  Partners 
may  sue  their  partners,  or  be  sued  by  them,  on  any  matter  not 
connected  with  the  partnership,  as  freely,  and  in  precisely  the 
same  way,  as  if  they  were  nijt  partners  ;  for  the  plain  reason, 
that,  outside  of  the  partnership^  they  are  not  partners.  So  if  one 
partner  sells  his  separate  property  to  his  partner,  this  does  not 
make  it  partnership  property  ;  and  the  seller  may  sue  the  buyer 
for  the  price,  at  law.  {ff)  Nor  does  it  make  any  difference  whether 
this  personal  and  separate  contract  or  debt  becomes  afterwards 
connected  with  the  partnership,  or  is  so  at  the  time  in  the  inten- 
tion of  the  parties,  if  it  be  not  on  account  of  the  partnership,  so 
as  to  involve  all  the  partners.  Thus,  if  one  partner,  who  has 
taken  more  than  his  proportion  from  the  partnership,  and  there- 
fore has  a  large  debit  against  him  on  the  partnership  books,  wishes 
to  reduce  this  debit,  and  borrows  money  from  another  partner, 
confessedly  to  be  paid  to  the  ))artnership  in  reduction  of  this 
debit,  the  borrower  is  bound  personally  to  the  lender,  and  the 
lender  can  sue  personally  the  borrower.  And,  if  a  partner  sues  a 
partner  on  any  independent  and  several  indebtedness,  the  defend- 
ant cannot  set  off  or  recoup  any  alleged  balance  which  he  claims 
that  he  should  have  against  the  plaintiff,  on  partnership  account, 
■when  that  account  shall  be  hereafter  settled  and  balanced.  ((/) 

(ff)  Elder  v.  Hood,  28  111.  5-38.  between  the  partners  can  be  foniided  on 

(g)  Ives  u.  Miller,  19  Barb.  196.     See  it.     Buell    v.   Cole,    54    Barb.   353.     The 

Roberts  v.  Fitler,  13  Pa.  265  ;  Molony  v.  neglect,  however,  of  a  defendant  to  enjoin 

Davis,  48.  Pa.   512;  [Wood  v.  Brush,  72  a  suit  at  law  against  him  by  a  copartner, 

Cal.    224,    13  Pac.   627  ;    Jones  v.  Shaw,  in   respect  to  their  partnership  dealings,  ' 

67  Mo.  667  ;  McKay  v.  Overton,  65  Tex.  does  not  prevent  his  maintaining  a  bill 

82;  Tomlinson  v.  Nelson,  49  Wis.   679.]  for  an  account  after  judgment  in  the  suit. 

Though    one    partner   give    another    his  and  offsetting  against  it  so  much  as  upon 

promissory  note,  if  it  be  before  and  in  aid  settlement  shall  be  found  just.     Gregg  v 

of  settlement,  and  may  not  be  found  to  Brewer,  67  111.  525. 
be  due   on  settlement,    no  ^uit    at    law 


252 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VIII. 


§  187.  Demands  arising  before  Partnership  launched.  —  So,  too,  a 
partner  can  sue  a  partner  on  any  contract  or  transaction  arising 
before  the  partnership,  although  referring  to  the  partnership,  {h) 
Thus,  if  one  proposed  partner  borrow  money  of  another,  to  be 
advanced  by  the  borrower  as  a  ))art  of  his  contribution  to  the 
stock  of  the  partnership,  the  borrower  is  liable  at  law  ])ersonally 
to  the  lender,  whether  the  money  so  borrowed  is  so  used  and 
applied  by  the  borrower  or  not.  (i)  ^ 


(/()  Goddard  v.  Hodges,  3  Tyrw.  209. 
Where  the  plaintiff  contracted  to  do  cer- 
tain work  for  a  joint-stock  company  for 
a  given  sum,  and  afterwards  caused  his 
name  to  be  inserted  in  the  books  of  the 
comi)any  as  a  holder  of  shares  therein,  — 
lield,  that  this  did  not  affect  his  right  to 
sue  the  company  in  res))ect  of  the  ])rior 
contract.  Lucas  v.  Beach,  1  Scott  N.  K. 
350,  1  M.  &  G.  417.  See  Holmes  v. 
Higgins,  1  B.  &  C.  74  ;  Fox  v.  Clifton, 
6  Bing.  776  ;  Howell  v.  Brodie,  6  Bing. 
N.  C.  44  ;  Cheny  v.  Clark,  3  Vt.  431  ; 
Currier  v.  Webster,  45  N.  H.  226. 

(i)  Helme  v.  Smith,  7  Bing.  714,  opin- 
ion of  Parke,  J.  Ex  parte  Notley,  1 
Mont.  &  A.  46  ;  Elgie  v.  Webster,  5  M. 
&  W.  518  ;  Bumpass  v.  Webb,  1  Stewart, 
19  ;  Scott  V.  Campbell,  30  Ala.  728  ; 
Duncan  v.  Lyon,  3  Johns.  Ch.  362  ; 
Bailey  v.  Stai'kc,  6  Ark.  191  ;  Biernan 
V.  Brashes.  14  Mo.  24  ;  French  v.  Styr- 
Jng,  2  C.  B.  N.  s.  357  ;  [Bull  v.  Coe,  77 
Cal.  54,  18  Pac.  808  ;  Bates  v.  Lane,  62 
Mich.  132,  28  N.  W.  753.]  See  CoUamer 
V.  Foster,  26  Vt.  754  ;  Pool  v.  Delancy, 
11  Mo.  570  ;  Currier  v.  Rowe,  46  N.  H. 
72. 

The  above  cases  show  that  if  A.,  enter- 
ing into  partnership  with  B.,  at  B.'s 
request  advances  for  him  the  amount  of 
capital  B.  has  agreed  to  contribute  to  the 
joint  funds,  this  is  a  loan  of  money  by 
A.  to  B. ,  and  constitutes  a  debt,  arising 


previous  to  the  partnership,  which  A. 
may  recover  at  law  pending  the  jiaitner- 
ship,  and  though  the  partnership  accounts 
ai'e  unsettled.  See  also  Williams  v.  Hen- 
shaw,  11  Pick.  84;  Crater  v.  Binninger, 
45  N.  Y.  545.  So  one  partner  may  sue 
another  for  money  loaned  to  pay  the 
hitter's  share  of  an  execution  against  the 
firm.  Chamberlain  v.  Walker,  10  Allen, 
429.  And  if  persons  enter  into  partner- 
ship, and  pay  in  their  respective  contri- 
butions, one  of  them  cannot  now  recover 
back  his  share  from  the  others,  though 
the  concern  prove  a  losing  one  and  is 
abandoned.  The  shares  of  all  the  part- 
ners are  now  only  subject  to  an  account. 
See  opinion  of  Cockburn,  C.  J.,  in  French 
V.  Styring,  supra;  Nockels  v.  Crosby,  3 
B.  &  C.  819,  824,  opinions  of  Holroyd 
and  Littledale,  JJ.  See  also  Gale  v. 
Leckie,  2  Stark.  107  ;  Townsend  v. 
Goewey,  19  Wend.  424  ;  Manning  v.  Wads- 
worth,  4  Md.  59  ;  Rockwell  v.  Wilder, 
4  Met.  561  ;  Wright  v.  Michie,  6  Gratt. 
354  ;  Robinson  v.  Mcintosh,  3  E.  D. 
Smith,  221.  It  has  been  said,  that  it  is 
not  competent  for  partners  to  agree  in 
their  articles  that  such  person  as  a  major- 
ity of  them  shall  afterwards  appoint  shall 
have  the  power  to  sue  in  his  own  name 
for  moneys  agreed  to  be  contributed  by 
each  ]iartner  to  the  general  fund.  For- 
tune V.  Brazier,  10  Ala.  791.  But  query. 
See  jjost,  §  191,  and  note  (m). 


1  Where  A.  buys  one-half  of  B.'s  stock  in  trade  and  enters  into  a  partnership 
with  him  in  the  business,  the  purchase  of  the  goods  is  not  a  partnership  matter,  and  B. 
may  sue  at  law  for  the  purchase-money.  Kinney  v.  Robison,  49  Mich.  247,  1& 
N.  W.  120.  Or  if  B.  fails  to  keep  his  agreement  as  to  the  sale,  A.  may  sue  at  law 
for  breach  of  the  contract  of  sale.  Reid  v.  McQuesten,  61  N.  H.  421.  The  purchase- 
money  goes  of  course  to  B.  individually,  not  to  the  new  partnership.  Ball  v.  Farley, 
81  Ala.  288,  1  So.  253. 


§  188.] 


OF   THE   REMEDIES   OF   PARTNERS    INTER   SE. 


253 


§  188.  Demands  arising  after  Termination  of  Partnership.  —  So,too, 
if  the  contract  or  transaction  arise  after  the  termination  of  the 
partnersliip,  although  it  have  a  reference  to  it,  an  action  at  law  is 
still  maintainable.  (^  )  Thus,  if  there  were  three  partners,  and  the 
partnership  is  dissolved  by  consent,  and  there  is  a  charge  against 
one  of  them  for  a  thousand  dollars,  and  he  borrows  money  from 
another  partner  to  pay  it,  and  does  so  pay  it,  the  lender  can  sue 
the  borrower,  although  the  accounts  are  unsettled,  and  it  is 
uncertain  where  the  final  balance  will  lie  or  what  it  will  be.  (^) 
But  if,  in  such  a  case,  the  accounts  are  all  adjusted  and  balanced, 
and  it  is  certain  that  the  lender  owes  the  borrower,  as  partner,  on 


{j)  Causes  subsequent  to  dissolution, 
from  which  a  right  of  action  between 
partners  may  ari.se,  may  be  such  as  origi- 
nate solely  in  the  relations  of  partners 
to  tliird  persons.  Osborne  v.  Harper,  5 
East,  225  ;  Wright  v.  Hunter,  1  East,  20, 

5  Ves.    792.      See   Butcher    v     Forman, 

6  Hill,  583.  See  Wright  v.  Cumpsty, 
41  Pa.  102,  where  the  plaintiff  and  de- 
fendant dissolved  partnership,  but,  before 
the  formal  and  public  dissolution,  the 
defendant  contracted  large  debts  in  the 
name  of  the  old  firm,  which  the  plaintiff 
paid.  It  was  held  that  the  plaintiff 
might  recover  the  amount  in  an  action 
against  the  defendant  as  money  paid  to 
his  use.  Hntton  v.  Eyre,  6  Taunt.  289, 
1  Marsh.  603.  But  if  there  are  more 
than  two  partners,  and  if,  after  dissolu- 
tion, by  the  misconduct  of  one,  the  rest 
are  compelled  to  pay  money  to  third  par- 
ties, it  is  important  to  ascertain  whether 
such  payment  is  made  out  of  a  joint  fund, 
or  by  the  several  contributions  of  each  ; 
for,  after  dissolution,  there  is  generally  no 
joint  stock  or  fund,  and  if  such  payment 
is  made  by  an  aggregate  of  the  several 
funds  of  the  contributing  partners,  then 
each  contributor  must  bring  a  separate 
action  for  the  amount  of  his  advance, 
because,  quoad  that  payment  the  con- 
tributors are  not  partners.  See  Osborne  u. 
Harper,  supra ;  Graham  v.  Robertson,  2 
T.  R.  282  ;  Brand  v.  Boulcott,  3  R.  & 
P.  235  ;  Kelby  v.  Steel,  5  Esp.  194  ; 
Manahan  v.  Gibbons,  19  Johns.  109,  112, 
426  ;  Doremus  v.  Selden,  19  Johns.  213. 

Of  the  foregoing  cases,  it  is  to  be 
observed,  that  the  parties  were  not  part- 
ners at  the  time  of  action  brought  ;  that 


the  cause  of  action  accrued  subsequently 
to  dissolution  ;  and  that  the  subject- 
matter  of  the  suit  was  in  no  way  con- 
nected with  the  partnershij)  nor  with 
the  partnership  accounts.  See  Milburn  v. 
Cod.l,  7  15.  &  C.  419.  Though  the  plain- 
tiff anil  defendants  had  ceased  to  be  part- 
ners, and  the  cause  of  action  had  accrued 
after  their  dissolution,  yet  the  subject- 
matter  of  the  suit  was  deemed  to  be 
properly  an  item  of  the  unsettled  partner- 
ship accounts,  and  the  plaintiff's  action, 
therefore,  not  maintainable.  See  De  Jar- 
nette  v.  McQueen,  31  Ala.  230. 

(k)  A.  &  B.  dissolved  partnership,  and 
A.  assumed  the  possession  and  entire  con- 
trol of  the  partnership  stock  in  trade. 
In  disposing  of  the  goods,  he  sold  a  part 
of  them  to  B.,  who  signed  a  bill  of  sale, 
acknowledging  the  purchase  of  A.  It 
was  held  fhat  A.  might  recover  the  value 
of  the  goods  in  an  action  at  law  against 
0.  Caswell  V.  Cooper,  18  111.  532.  The 
plaintiff  and  three  other  persons  entered 
into  partnership  for  a  single  adventure, 
the  plaintiff  furnishing  all  the  capital. 
The  defendant  was  one  of  the  four  part- 
ners, and  the  adventure  being  closed,  and 
the  firm  dissolved,  the  capital  was  de- 
posited with  the  defendant  for  the  plain- 
tiff. It  was  held  that  it  thereby  became 
the  individual  property  of  the  plaintiff, 
and  could  be  recovered  by  him  of  the 
defendant.  Myers  v.  Winn,  16  111.  135. 
See  Warbritton  v.  Cameron,  10  Ind.  302  ; 
Rockwell  V.  Wilder,  4  Met.  562  ;  Ronclie 
V.  Pendergrast,  3  H.  &  J.  33  ;  Chnmbir- 
lain  V.  Walker,  10  Allen,  429.  See  Wycoif 
V.  Purnell,  10  Iowa,  332. 


254  THE   LAW   OP   PARTNERSHIP.  [CH.    VIII, 

tliis  final  balance,  what  he  thus  owes  might  be  applied  by  way  of 
set-off  to  the  lender's  action.  But  not  unless  the  accounts  are 
settled.  (0  1 

§  189.  Private  Debt.  —  If  the  parties  to  a  debt  or  contract  can 
be  considered  in  reference  to  it  as  only  joint  sureties  or  joint  con- 
tractors, (m)  or  connected  in  any  other  way  than  as  partners,  (w) 
the  disability  of  partnership  does  not  apply,  although  they  may 
be  partners  generally,  (o) 

(Z)  Ives  V.  Miller,  19  Barb.  196.     See  share  in  profits  in  such  a  way  that  they 

Pool   V.   Delaney,    11  Mo.  570  ;  Scott    v.  are  partners  qnoad  third  persons,  but  yet 

Campbell,  30  Ala.  728  ;  Coleman  i;.  Cole-  are  not  partners  inter  se,  there  is  nothing 

man,   12  Rich.    L.   (S.  C. )   183;     [Great-  to  prevent  an  action  being  maintained  by 

house  r.  Greathouse,  60  Tex.  597.]  either  against  the  other.     Hesketli  i;.  Blan- 

(??i)   Burnell  v.   Minot,  4  J.  B.  Moore,  chard,  4  East,  144. 
340  ;  Helme  v.  Smith,  7  Bing.   709,  713,         As  to  a  distinction  between  a  general 

714;  Holmes  c.  Williamson,  6  M.  &  S.  158  ;  and  a  special  partnership,  see  Galbraith  v. 

Ansell  V.  Waterhouse,  6  M.  &  S.  390,  per  Moore,    2    Watts,    86.      See    Brigham    v. 

Bayley,  J. ;  Blackett  v.   Weir,  5  B.  &  C.  Eveleth,    9    Mass.     538  ;    Jones    v.    Har- 

385,    388  ;  Batard  v.   Hawes,    2  E.  &  B.  raden,  9  Mass.  540  ;    Gow  on   Part.    [79], 

287.  citing  Abbott  v.  Smith,  2  W.  Bl.  947  ;  per 

{u)  ir  a  person  is  only  a  nominal  part-  Lord  Kenyon,  Merryweather  v.   Nixon,  8 

ner,   but,   from  being  held  out  as  a  part-  T.  R.  816  ;  Graham  v.  Robertson,  2  T.  R, 

ner  to  third  persons,  is  obliged  to  pay  the  2S2  ;    Herries  v.  Jameson,  5  T.  R.   556  ; 

debts  of  the  firm,   he  may,  in  an  action  Evans  v.  Yeatherd,  2  Bing.  133  ;    Wilson 

against  the  actual  partner,  show  the  true  v.  Cutting,  4    Moore   &  S.  268  ;    Koel   v. 

nature  of  his  relations  to  the   firm,   and  Bowman,  2  Litt.  46  ;   Wright  v.   Hunter, 

recover  the  whole  amount  he  has  been  com-  5  Ves.  792. 

pelled  to  pay.     Latham  v.  Kenniston,  13  (o)  As  where   four  persons,   who    had 

N.   H.   213.     In  like  manner,   if  persons  acted  as  directors  of  a  proposed  railway 

1  Where  upon  dissolution  or  otherwise  one  partner  agrees  with  the  other  to  assume 
certain  firm  debts,  and  fails  to  pay  them,  the  copartner,  upon  being  obliged  to  pay  the 
debt,  may  maintain  an  action  at  law  for  the  amount ;  for  the  debt  has  ceased  to  be 
due  from  the  partnership.  The  copartner  has  assumed  the  position  of  a  mere  surety, 
and  the  contract  by  which  this  has  been  done  is  a  matter  entirely  apart  from  the  part- 
nership. Kellogg  V.  Moore,  97  111.  282  ;  Warring r.  Hill,  89  Ind.  497  ;  Lire  Bur- 
gess, 83  Me.  339,  22  Ath  222;  Graham  r.  Thornton,  (Miss.)  9  So.  292;  Neil  v. 
Greenleaf,  26  Oh.  St.  567  ;  Miller  v.  Bailey,  19  Ore.  539,  25  Pac.  27  ;  Scott's  Appeal, 
88  Pa.  ;73  ;  Clarke's  Appeal,  107  Pa.  436  ;  Edwards  v.  Remington,  51  Wis.  336,  8  N. 
W.  193  ;  Jewell  i>.  Ketchum,  63  Wis.  628,  23  N.  W.  709  ;  Webster  t;.  Lawson,  73  Wis. 
561,  41  N.  W.  710.  But  no  action  will  lie  without  showing  either  a  particular  time  set 
for  i)ayment,  or  the  lapse  of  a  reasonable  time.  Geise  v.  Ragan,  80  Ga.  732,  6S.  E.  697. 
If  the  agreement  takes  the  form  of  a  covenant  to  pay  debts,  and  is  broken,  the  co- 
partner may  of  cour.se  sue  even  if  he  has  not  paid  the  debt  himself.  Miller  v.  Bailey, 
19  Ore.  539,  25  Pac.  27.  This  would  most  frequently  ha  pen  if  a  time  was  limited 
for  payment. 

Where  upon  dissolution  onepartner  agrees  to  pay  the  debts  of  the  firm,  his  copartner, 
who  has  previously  supplied  goods  to  the  firm,  may  sue  at  law  for  the  price  of  them. 
Throi)pr.  Richardson,  132  Pa.  399,  19  Atl.  218.  Where  upon  dissolution  one  partner 
agreed  to  collect  the  firm  debts  and  pay  over  half  of  what  he  collected  to  his  cojiartner, 
the  latter  may  maintain  an  action  at  law  on  the  agreement.  Ferguson  v.  Baker,  116  N. 
Y  257,  22  N.  E.  400, 


§  190.] 


OF   THE   REMEDIES    OF   PARTNERS   INTER   SE. 


255 


§  190.  Separation  by  Agreement  from  Partnership  Business.  —  It 
is  quite  clear  that  cei-taiu  particular  aud  distinct  transactions 
may  be  separated  from  the  atiairs  or  business  of  the  partnership, 
by  the  agreement  of  the  parties.  (/?)  ^  Then  those  persons  who 
are  concerned  in  this  separated  matter  are  not  as  partners  to 
each  other,  although  in  all  other  business  relations  they  remain 
partners.  And  it  may  be  added,  the  law  will  take  cognizance  of 
any  such  separated  transaction,  and  of  any  single  one  of  which 
the  character  or  circumstances  are  such  as  to  indicate  that  the 
meaning  of  it  is,  that  one  partner  shall  pay  a  certain  sum  of 
money  to  another  partner  before  any  account  is  taken  ;  wjiich 
money  is  not  to  be  carried  into  the  general  account  when  that  is 
taken,  (q) 

On  similar  grounds,  a  partner  can  sue  a  partner  on  his  note 
or  indorsement  or   acceptance,  (r)     Nor  do  we  think  it   would 


company,  being  sued  for  debts  contracted 
on  account  of  the  concern,  jointly  retained 
an  attorney  to  defend  them  on  their  per- 
sonal responsibility,  it  was  held  that  one  of 
the  four,  who  had  paid  the  attorney's  bill, 
was  entitled  to  sue  the  others  for  contribu- 
tion. Tindal,  C.  J.:  "If  these  four  per- 
sons entered  into  the  contract  with  the 
attorneys,  distinct  from  their  character  of 
members  of  the  company,  it  appears  to  me 
that  the  case  does  not  fall  within  the  gen- 
eral rule."  Edger  v.  Knapp,  6  Scott  N. 
R.  707,  712  ;  Boulter  v.  Peplow,  9  C.  B. 
493  ;  Sedgwick  v.  Daniell,  2  H.  &  N. 
319. 

ii))  Coffee  V.  Brian,  10  J.  B.  Moore, 
341,  3  Bing.  54  ;  Cross  v.  Cheshire,  6  Exch. 
43.  See  Cousten  v.  Burke,  2  Harris  &  G. 
300,  303;  Collamer  v.  Foster,  26  Yt.  754  ; 
Williams  v.  Henshaw,  11  Pick.  83,  84  ; 
Gibson  v.  Moore,  6  N.  H.  547  ;  Caswell  v. 
Cooper,  18  111.  532  ;  Buckner  v.  Ries,  34 
Mo.  357.  [Dakin  v.  Graves,  48  N.  H.  45.] 
The  nisi  ]}riits  case  of  Robsou  v.  Curtis,  1 
Stark.  7^,  seems  hardly  reconcilable  with 
the  principle  of  the  foregoing  decisions. 

(q)  See  the  language  of  Bayley,  J.,  in 
Jackson  v.  Stopherd,  2  Cr.  &  M.  361,  4 


Tyrw.  330 ;  and  see  Finlay  v.  Stewart,   56 
Pa.   183. 

(r)  Preston  v.  Strutton,  1  Anst.  50  ; 
Neale  v.  Turton,  4  Bing.  151  ;  Bonafle  v. 
Fenner,  6  Sm.  &  M.  212  ;  Grigsby  v,  Nance, 
3  Ala.  347  ;  Morrison  v.  Stockwell,  9  Dana, 
1 72  ;  Lomas  v.  Bradshaw,  9  C.  B.  620. 
See  Teague  v.  Hubbard,  8  B.  &  C.  345  ; 
Case  V.  Maxey,  6  Cal.  276.  [McSherry  r. 
Brooks,  46  Md.  103  ;  McKay  v.  Overton, 
65  Tex.  82.]  And  where  it  is  ascertained 
by  two  partners  who  are  about  closing 
their  concerns,  that  a  balance  will  cer- 
tainly be  due  by  one  of  them  to  the  other 
on  a  final  settlement,  although  the  true 
balance  cannot  at  the  time  be  ascertained, 
then  if  such  debtor  partner  gives  his  note 
to  the  creditor  partner  for  a  sum  within 
the  balance  which  it  is  acknowleilged  will 
be  due  to  him  on  the  final  settlement,  such 
note  is  given  upon  a  good  consideration, 
and  is  equivalent  to  an  express  promise  to 
pay  the  given  sum  mentioned  ;  and  the 
payment  of  such  note  may  be  enforced  at 
law,  though  the  balance  is  not  struck  be- 
tween them.  Rockwell  v.  Wilder,  4  Met. 
556.  See  Ives  r.  Miller,  19  Barb.  196  ; 
Pool  V.  Delaney,  11  Mo.  570.     See  Grid- 


^  As  where  one  partner  assents  to  the  other  taking  partnership  property  to  his 
individual  use,  in  consideration  of  an  agreement  to  pay  half  its  value  to  the  partner 
individually.  Purvines  v.  Champion,  67  111.  459  ;  Neil  v.  Greenleaf,  26  Oh.  St.  567. 
So  if  one  partner  agrees  to  pay  a  copartner  a  share  of  his  profits,  the  latter  may  main- 
tain an  action  at  law  upon  breach  of  the  agreement.     Emery  v.  Wilson,  79  N.  Y.  78 


256 


THE    LAW    OF    PARTNERSHIP. 


[CH.    VIII. 


be  competent  for  the  defendant  to  defeat  such  an  action  oy 
showing-  that  it  was  in  fact,  on  i)artnership  account,  or  a  part- 
nership debt,  because  this  would  vary  by  evidence  a  written 
contract,  (s) 

So,  too,  if  a  partner  receives  a  sum  of  money  actually  belong- 
ing to  his  partner,  but  carries  the  same  to  partnership  account, 
the  partner  to  whom  the  money  belongs  may,  nevertheless,  sue 
the  partner  who  received  it.  (t)  And,  in  general,  the  mere  fact 
that  a  transaction  is  entered  upon  partnership  books  or  accounts 
as  belonging  to  the  partnership  will  not  prevent  a  suit  by  the 
partner  to  whom  it  actually  belongs  ;  as  only  the  fact  of,  and  not 
the  appearance  of,  partnership  interest  could  defeat  his  suit. 

If  there  be  a  firm  of  more  than  two  persons,  and,  on  settle- 
ment, one  is  found  to  have  withdrawn  more  than  his  share,  the 
other  two  may  have  a  joint  action  against  him  thereon  ;  but 
neither  one  of  the  other  two  can  sue  separately,  although  he  has 
an  assignment  of  all  the  rights  and  interests  of  his  associates  in 
the  assets  of  the  firm,  {tt) 


ley  V.  Dole,  4  N.  Y.  486.  In  Van  Ness  v. 
Forrest,  8  Craiicli,  30,  it  was  held,  that 
a  promissory  note,  given  by  one  partner  to 
another  for  the  use  of  the  copartnership, 
will  sustain  an  action  in  the  name  of  the 
promisee  against  the  maker,  notwithstand- 
ing the  connection,  and  that  the  money, 
when  recovered,  would  belong  to  the  co- 
partnership. 

(s)  It  should  be  remembered,  with  res- 
pect to  negotiable  paper,  that  credit  is 
deemed  to  be  given  exclusively  to  those 
whose  names  appear  on  the  face  of  the 
paper,  and  that  it  is  not  allowable  to  add 
parties  by  ]iarol.  See  1  Pars,  on  Notes  & 
Bills,  pp.  *93,  *102.  But,  to  an  action  on 
a  note  given  by  an  outgoing  partner  for 
assets,  he  may  set  up  in  defence  an  agree- 
ment, that,  for  any  notes  or  accounts  that 
.should  prove  worthless,  he  should  be 
allowed  a  deduction  pro  tanto.  Bethel  v. 
Franklin,  57  Mo.  466. 

(0  The  i)laintiff,  and  Robert  Smith,  his 
father,  had  been  in  partnership,  during 
wliich  time  one  Keate  became  indebted  to 
them  in  531/.  Robert  Smith  died,  leaving 
plaintiff  his  sole  executor.  Subseijuently, 
the  plaintiff  took  the  defendant  into  part- 
nership, and  Keate  became  indebted  to 
these  two  in  the  further  sum  of  301.  He 
afterwards  became  involved,  and  his  effects 


were  assigned  to  trustees,  for  the  benefit 
of  his  creditors.  Two  payments  were  made 
in  the  course  of  distribution  at  different 
times.  The  first,  which  was  made  to  the 
plaintiff  and  defendant,  was  divided 
between  them  according  to  their  several 
proportions ;  that  is,  tlie  proportion  of  the 
former  debt  of  531/.  to  tlie  plaintiff's  separ- 
ate use,  and  the  proportion  of  the  30/.  in 
moieties  between  them.  After  this,  the 
trustees  transmitted  a  bill  of  exchange  to 
the  plaintiff  and  defendant  in  their  joint 
names,  and  the  defendant  alone  received 
the  money  under  the  title  of  Smith  &  Bar- 
row. The  plaintiffs  proportion  of  this 
second  dividend,  so  far  as  related  to  his 
oiiginal  debt,  was  79/.  14s.  6d.  The  ques- 
tion was,  whetlier  the  plaintiff  could  re- 
cover this  sum  from  the  defendant,  in  an 
action  for  money  had  and  received  to  the 
plaintiff's  use,  it  being  contended  for  the 
defendant  that  it  was  money  received  on 
account  of  a  partnership  transaction,  and 
therefore  not  recoverable  in  the  present 
action.  It  was  held  that  he  could  main- 
tain this  action.  Smith  v.  Barrow,  2  T. 
R.  476.  See  Coffee  v.  Brian,  10  J.  B. 
Moore,  341,  3  Bing.  4  ;  ante,  note  (p). 
Cross  t).  Cheshire,  7  Exch.  43. 

{tt)  Wiggin    V.    Cummings,    8    Allen, 
353. 


§  191.] 


OF   THE   REMEDIES   OF   PARTNERS   INTER   SE. 


257 


§  191.  Action  on  Partnership  Agreement. — If  tllC  articles  of 
partnership,  or  other  agreements  between  the  partners,  are  under 
seal,  covenant  will  lie  for  any  breach  of  the  agreement  to  enter 
into  partnership,  or  of  any  stipulation  for  payment,  advances,  or 
other  acts  for  setting  the  partnership  into  operation,  although 
accounts  between  the  partners  which  are  subsequent  to  the  part- 
nership require  to  be  investigated  and  adjusted  in  a  court  of 
equity.  (?^) 


{u)  Venning  v.  Leckie,  13  East,  7  ;  Ex 
parte  Notley,  1  Mont.  &  A.  46  ;  Glover  v. 
Tuck,  24  Wend.  153  ;  Tevrill  v.  Richards, 

1  Nott  &  McO.  20  ;  Williams  v.  Heiishaw, 
11  Pick.  81  ;  Ellison  v.  Chapman,  7  Blackf, 
224  ;  Bailey  v.  Starke,  6  Ark.  191.  In 
like  manner,  covenant  will  lie,  subject  to 
the  qualification  stated  in  the  text,  for  the 
breach  of  any  of  the  stipulations  in  the 
articles  of  pai'tnership  after  the  partner- 
ship has  actually  begun.  Glover  v.  Tuck, 
supra ;  Want  v.  Reese,  1  Biiig.  18  ; 
Hatcher  v.  Seaton,  2  M.  &  W.  47;  Bedford 
V.  Brutton,  1  Scott,  261,  262  ;  M'Arthur  v. 
Ladd,  5  Ohio,  514,  521  ;  Duncan  v.  Lyon, 
3  Johns.  Ch.  351,  362  ;  Hayes  v.  Flowers, 
25  Miss.  168  ;  Ridgwny  v.  Grant,  17  111. 
117  ;  Manning  v.  Wadsworth,  4  Md.  70  ; 
Hall  V.  Stewart,  12  Pa.  213  ;  Capen  v. 
Barrows,  1  Gray,  376.  But  covenant 
does  not  lie,  on  an  agreement  of  partner- 
ship, to  com[)el  the  payment  of  a  balance 
due  to  the  partnership  from  one  of  the 
partners.  Niveny.  Spickerman,  12  Johns. 
401.  An  action  will  lie  between  partners 
for  the  breach  of  a  covenant  to  account. 
And  in  the  simple  case  of  a  single,  or  at 
most  but  temporary,  breach  of  partnership 
covenants,  unless  the  bill  pray  for,  and 
there  are  just  grounds  for,  dissolution, 
equity  will  not  interfere  by  injunction  or 
otherwise  ;  but  will  leave  the  injured 
party  to  his  action  of  covenant,  as  the  more 
appropriate  remedy.     Marshall  v.  Colman, 

2  Jao.  &  W.  266. 

Each  partner,  committing  a  breach  of 
his  covenant,  may  be  sued  by  all  the  rest 
jointly  for  the  joint  damage  sustained  by 
them  in  respect  thereof  :  for  the  covenant 
of  each  covenantor  is,  in  contemplation  of 
law,  made  with  all  the  rest,  excluding 
himself,  and  all  the  rest  are  joint  as  against 
him;  "for  if  there  be  twenty  partners, 
and  one  of  them  covenants  with  all   the 


rest,  he  is,  in  that  respect,  several  from 
them  all,  and  they  all  joint  against  him." 
rcr  curiam  in  Thimblethorpe  v.  Hardesty, 
7  Mod.  117  ;  Vesey  v.  Mantell,  9  M.  &  W. 
323 ;  Eccleston  v.  Clipsham,  1  Saund. 
153;  Wright  v.  Michie,  6  Gratt.  354, 
358;  Spencer  v.  Durant,  Comb.  115; 
Saunders  v.  Johnson,  Skin.  401  ;  Caj)en  v. 
Barrows,  1  Gray,  376.  It  was  held  in 
one  Massachusetts  case,  on  the  supposed 
authority  of  an  English  decision,  that 
where  three  or  more  copartners  have  con- 
tributed severally  and  in  diH'erent  propor- 
tions to  the  joint  stock,  and  one  of  them 
withdraws  from  the  coiiartnership,  in  vio- 
lation of  their  mutual  agreement,  each  has 
his  several  remedy  for  a  breach.  Dunham 
V.  Gillis,  8  Mass.  462.  See  Thomas  v. 
Pyke,  4  Bibb,  418.  But  Dunham  v.  Gil- 
lis has  been  overruled,  and  the  authority 
of  the  case  upon  which  it  was  decided 
strongly  questioned,  in  Capen  v.  Barrows, 
supra,  by  Metcalf,  J.,  in  delivering  the 
opinion  of  the  court.  Though  partners 
covenant,  each  respectively  with  the 
others,  and  with  their  respective  execu- 
tors, administrators,  &c.,  upon  the  death  of 
one  of  the  partners,  a  covenantee,  his  right 
of  action  survives  to  his  co-covenantees. 
Eccleston  v.  Clipsham,  1  Saund.  153. 

As  in  actions  of  covenant  between  part- 
ners, so  in  actions  upon  simple  contracts, 
each  partner  is  regarded  as  contracting 
with  the  rest,  excluding  himself,  and  may 
be  sued  b}'  all  the  rest  jointly  for  the  vio- 
lation of  his  contract  ;  he  being  several 
from  them  all  in  respect  of  the  breach,  and 
they  all  joint  against  him.  Venning  v. 
Leckie,  1,3  East,  7. 

Though  partners  cannot,  by  agreement 
among  themselves,  give  an  authority  to 
any  one  of  them  to  bring  an  action  in  his 
name  against  persons  not  members  of  the 
firm,  there  is  no  objection  to  their  empow- 
17 


258 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIII. 


Whenever  there  has  been  any  breach  of  an  express  stipulation 
between  persons  who  are  partners,  an  action  for  damages  will  be 
sustainable,  unless  the  breach,  or  the  stipulation  itself,  or  both, 
are  such  that  they  involve  the  whole  partnership  business  and 
accounts,  and  the  damages  can  be  determined  only  by  first 
settling  those  accounts,  (v)  Thus,  if  one  partner  agrees  to  pay 
another  a  certain  salary,  or  commission,  or  other  compensation 
for  his  services  over  and  above  his  share  of  the  profits,  and  inde- 
pendently of  them,  it  would  seem  that  an  action  at  law  can  be 
maintained  on  this  promise,  (w)  And  the  same  rule  would 
probably  apply  to  the  breach  of  any  distinct  and  indejiendent 
agreement  in  the  articles  of  partnership,  unless  the  difficulty  of 


eriiig  one  of  their  number  to  be  the  sole 
plaintitf  in  actions  to  be  brought  inter  se 
in  the  course  of  the  partnership  business. 
"  Such  an  agreement  is,  in  effect,  an  under- 
taking not  to  object  on  account  of  all  who 
ought  otherwise  to  have  joined  in  the 
action  not  being  joined."  Per  Best,  C.  J., 
in  Radenhurst  v.  Bates,  3  Bing.  463,  470  ; 
Cross  V.  Jackson,  5  Hill,  478-  In  this  last 
case,  the  property  and  interest  of  a  large 
association  were,  by  their  articles,  vested 
in  trustees  thereafter  to  be  elected,  and  the 
subscribers  agreed  to  pay  to  such  trustees 
their  respective  subscriptions.  Cowen,  J., 
said  :  "  The  effect  was,  on  the  trustees 
\)eing  elected,  as  provided  by  the  articles, 
to  vest  every  legal  right  of  the  company  in 
them,  the  right  to  sue  the  defendant  in 
their  own  names  inclusive.  Had  it  been 
left  for  the  law  to  imply  a  promise,  it 
would,  no  doubt,  have  looked  to  the  other 
stock  subscribers  as  the  promisees,  because 
the  consideration  came  from  them  ;  and, 
in  that  case,  the  action  must  have  been  in 
the  names  of  the  whole."  Niven  v.  Spick- 
erman,  12  .Johns.  401.  See  Davies  v. 
Hawkins,  3  Moore  &  S.  488.  See  also  For- 
tune V.  Brazier,  10  Ala.  791,  for  a  case 
hardly  reconcMlable  with  the  above  author- 
ities ;  Brown  v.  Tapscott,  6  M.  &  W.  119. 

(v)  Capen  v.  Barrows,  1  Gray,  376. 
See  Bedford  v.  Bnitton,  1  Bing.  N.  C.  407. 
See  Andrews  v.  ?jllison,  6  J.  B.  Moore, 
199  ;  and  compare  Bedford  v.  Brntton, 
sicprrt,  with  Estes  v.  Whipple,  12  Vt.  373. 
See  also  Ridgway  v.  Grant,  17  111.  117. 
[Hnntv.  Reilly,  50  Tex.  99.] 

(w)  Paine  v.  Thacher,  25  Wend.  450. 
in  Weaver  v.    Upton,  7   Ired.    458,   the 


action  was  covenant,  and  the  breach  as- 
signed the  non-payment  of  $450  by  the 
defendant  to  the  i)laintiff.  The  covenant 
was  contained  in  articles  of  copartnership 
between  Upton  &  Weaver,  and  was  as 
follows:  "The  said  Upton,  of  the  first 
part,  bargains  and  agrees  to  give  me,  the 
said  Weaver  of  the  second  part,  four  hun- 
dred and  fifty  dollars,  to  manage  the  busi- 
ness, which  I  agree  to  manage  according 
to  the  best  of  my  judgment."  In  this 
action,  the  defendant's  counsel  moved  to 
nonsuit  the  plaintiff,  upon  the  ground  that 
the  covenant  amounted  to  an  article  of 
copartnershiji,  and  that  the  $450,  for  the 
non-payment  of  which  the  covenant  was 
alleged  to  have  been  broken,  was  to  be 
allowed  out  of  the  funds  of  the  copartner- 
ship. A  nonsuit  was  accordingly  entered, 
and  ui)on  appeal  the  judgment  was  affirmed. 
The  court  said  :  "  The  parties  were  stipu- 
lating concerning  the  partnership  business, 
and  the  terms  on  which  it  was  to  be  carried 
on  ;  and,  among  others,  that  Upton  bar- 
gained and  agreed  to  let  Weaver  have  $450 
for  his  services  that  year.  It  seems  to  us 
that  it  woulil  be  against  justice  and  right 
to  construe  the  covenant  to  be  an  agree- 
ment by  Upton,  that  he  would  pay  that 
sum  out  of  his  own  pocket.  We  think 
that  it  was  an  item  in  the  expense  account 
of  the  firm,  and  that  the  firm  should  jiay 
it."  The  case  of  Hills  v.  Bailey,  27  Vt. 
548  is  (piite  similar.  When  ]>artners 
agree  to  put  into  the  firm  a  specified 
amount,  each  may  sue  the  other  for  a 
breach  of  the  agreement.  Truitt  <;.  Baird, 
12  Kas.  420. 


§  193.]  OF    THE    REMEDIES    OF    PARTNERS    INTER    SE.  259 

determining  the  damages  without  a  general  settlement  should 
make  the  action  nugatory,  and  be  sufficient  to  defeat  it.  ^ 

§  192.  Inability  of  Partner  to  Sue  another  not  therefore  Abso- 
lute. —  The  common  law  formerly  allowed  to  a  partner  scarcely 
any  remedy  whatever  against  a  partner.  It  seemed  to  say  that 
partners  have  agreed  to  trust  each  other,  and  waive  all  legal 
rights.  Malynes  expressly  declares  that,  "  partners  cannot  sue 
each  other  by  the  law.  If  two  men  have  a  wood  jointly,  and 
the  one  selleth  the  wood  and  keepeth  the  money  all  to  himself, 
in  this  case  his  fellow  shall  have  no  remedy  against  him  by  the 
common  law ;  for  as  they,  when  they  took  the  wood  jointly, 
put  each  other  in  trust,  and  were  contented  to  occupy  and 
deal  together,  so  the  law  suffereth  them  to  order  the  profits 
thereof."  (x)  But  the  law,  in  these  days,  would  not  suffer  the 
one  to  do  so  great  a  wrong  to  the  other.  We  have  already  seen, 
and  shall  again  see,  that  the  law  sustains  actions,  and  gives 
remedies,  between  partners,  unless  more  substantial  and  suffi- 
cient reasons  than  the  mere  theory,  or  rather  fancy,  stated  by 
Malynes,  interferes  to  prevent  the  law  from  doing  justice. 

If  a  partner  gives  his  copartner  a  sum  of  money  for  a  specific 
purpose,  and  the  copartner  keeps  the  money,  there  is  authority 
and  reason  for  holding  that  the  partner  who  gave  the  money 
may  sue  him  who  received  and  holds  it.  (?/)  So  a  partner  may 
sue  his  partner  on  a  matter  separated  by  an  award,  (j/^) 

§  193.  Demand  founded  upon  Balance  of  Account. — There  are 
no  cases  in  which  an  action  at  law  by  partner  against  partner  is 
maintained,  so  numerous  or  diversified  as  those  which  are  founded 

{x)  Malynes,  Lex  Merc.  310.  were  not  himself  a  member  of  the  societv, 

(y)  See  Sharp  v.  Warren,  6  Price,  131,  and  that  he  had  placed  himself  out  of  the 

where  the  auditor  of  a  benefit  club,  him-  protection  of  his  situation  in  the  society  by 

self  a  member,  having  misapplied  the  funds  his  conduct  in  withdrawing.     See  Smith 

of  the  society  and  refused  to  pay  them  over,  v.  Barrow,  2  T.  R.  476  ;  Cross  v.  Cheshire, 

it  was  held,  that  the  proper  officers  of  the  6  Exch.  43. 

club,  suing  in  its  name,   might  maintain  (i/y)  One  partner  ma}'  sue  another  on 

indebitatus  assumpsit  against  him  for  the  an  award  upon   a   partnership  matter   in 

amount,  on  the  ground  that  the  defendant's  dispute   between  them,  otlier  partnership 

carrying  away  the  money,  and  leaving  the  matters  being  still  unsettled.     Blakeley  v. 

society,  made  him  liable  to  them,  as  if  he  Graham,  111  Mass.  8. 

^  When  an  agreement  for  a  partnership  is  entered  into,  but  one  party  refuses  to 
carry  it  out  by  enteiing  into  the  business,  the  other  party  has  an  immediate  right  of 
action  against  him  for  a  breach  of  contract.  Goldsnuth  v.  Sachs,  17  F.  R.  726,  8 
Sawy.  110  ;  Powell  v.  Maguire,  43  Cal.  11  ;  Mann  v.  Bowen,  85  Ga.  616,  11  S.  E.  862  ; 
Vance  v.  Blair,  18  Ohio,  532  ;  Hill  v.  Palmer,  56  Wis.  123,  14  N.  W.  20.  The  same 
is  true  of  an  agreement  fixing  the  term  of  the  partnership.  Terry  v.  Carter,  25  Miss. 
168  ;   Bagley  v.  Smith,  10  N.  Y.  489  ;  Addams  v.  Tutton,  39  Pa.  447. 


260  THE   LAW    OF    PARTNERSHIP.  [CH.    VIII, 

upon  the  striking  of  a  balance.  There  is  much  conflict  and  uncer-. 
tainty  among  them,  most  of  which,  we  think,  might  have  been 
avoided  by  a  distinct  recollection  of  the  reasons  and  principles 
obviously  a})plicable  to  such  cases. 

The  general  rule  is,  that  a  partner  may  sue  at  law  a  partner 
on  a  promise  to  pay  a  balance  which  has  been  struck  and  agreed 
upon.  (2)  The  reason  for  this  is  clear  and  certain ;  it  is,  that 
all  the  reasons  for  refusing  this  remedy  at  law  disappear  from 
such  a  case.  For,  in  the  first  place,  as  to  a  settled  balance, 
they  are  no  longer  partners.  If  the  settlement  has  closed  their 
concerns,  or  has  followed  the  dissolution  of  the  partnership, 
they  are  no  longer  partners  at  all ;  if  the  partnership  goes  on, 
they  are  not  partners  as  to  this  balance,  because  it  has  been 
taken  out  of  the  current  accounts,  separated  from  the  partner- 
ship, and  appropriated  to  the  partner  to  whom  it  is  due.  In 
the  next  place,  there  is  no  longer  any  objection  on  the  ground 
that  the  law  cannot  take  an  account  of  the  partnership  debts 
and  means,  and  take  into  view  all  those  facts  and  considerations 
which  are  necessary  in  order  to  ascertain  who  owes  the  other, 
and  how  much.  The  law  cannot  do  it,  and  equity  will  not  do  it ; 
for  it  has  been  done  already  by  the  parties  themselves.  As  there 
is  now  no  reason  for  a  court  to  do  it,  the  inability  of  a  court  to 
do  it  constitutes  no  reason  for  refusing  cognizance  of  the  case, 

§194.  Whether  Final  Balance  Required. —  We  apprehend  the 
true  rule  to  be,  that  courts  of  law  should  sustain  any  action 
between  partners  of  the  character  above  described.  But  the 
question  is  sometimes  decided  on  more  technical  grounds.  Some- 
times it  is  said  that  no  such  action  will  be  maintained,  unless  for 


{z)  And,  as  we  have  already  seen,  an  1  Hall,  ISO  ;  Calvert  v.  Marlow,  6  Ala. 
action  may  be  maintained  upon  .such  a  342;  Gulick  u.  Gulick,  2  Green  (14  N.  J.), 
promise,  notwithstanding  a  covenant  to  578  ;  McCoU  v.  Oliver,  1  Stew.  510  ;  Fan- 
account  between  the  parties.  Moravia  v.  ning  v.  Chadwick,  3  Pick,  420  ;  Van 
Levy,  2  T.  R.  483,  note.  See,  in  illustra-  Amringe  v.  Ellmaker,  4  Barr,  281.  So,  if 
tion  of  the  general  principle  enunciated  in  it  is  agreed  between  a  surviving  partner, 
the  text,  Preston  v.  Stratton,  1  Aiist.  50;  and  the  representative  of  one  deceased,  that 
Brierly  v.  Cripps,  7  C.  &  P.  709  ;  Wray  v.  the  former  will  pay  the  latter  a  certain 
Milestone,  5  M.  &  W.  21  ;  Henley  v.  sum  of  money  in  consideration  of  all  inter- 
Soper,  8  B.  &  C,  16  ;  Winter  v.  White,  1  est  in  the  partnership  account  being  relin- 
Br.  &  B.  350  ;  Ozeas  v.  Johnson,  1  Binn.  quished,  an  action  of  assumpsit  to  recover 
191,  4  Dall.  434  ;  Walker  v.  Long,  2  P,  the  sum  agreed  upon  may  be  maintained, 
A.  Browne,  125  ;  Young  v.  Brick,  2  Pen-  Wells  v.  Wells,  Ventr.  40.  [Cochrane  v. 
ning,  663  ;  Beach  v.  Hotchkiss,  2  Conn,  Allen,  58  N.  H.  250.]  See  Lane  v  Tyler, 
425  ;  Lamalere  v.  Caze,  1  Wash,  C.  C.  49  Me.  108 ;  Holyoke  v.  Mayo,  50  Me. 
435  ;  Wetmore  v.  Baker,  9  Johns.  307  ;  385  ;  Nims  v.  Bigelow,  44  N.  H.  376  ; 
Murray  v.  Bogert,  14  Johns.  318  ;  Clark  y.  Goble  v.  Howard,  12  Ohio,  165  ;  Wright 
Dibble,  16  Wend.  601;  Attwater  i;.  Fowler,  v.  Cumpsty,  41  Pa.  102, 


§  194.]  OF   THE   REMEDIES   OF   PARTNERS   INTER   SE.  261 

a  final  balance.  And  this  was  asserted  somewhat  obiter  perhaps, 
in  Massachusetts,  at  a  time  when  the  equity  powers  of  the 
Supreme  Court  of  that  State  were  not  so  extensive  as  they  now 
are  ;  and  it  was  added,  that  all  the  different  States  concur  in 
this.  But  after  remarking  that  in  some  of  our  States,  and  in 
England,  no  suit  at  law,  even  for  a  final  balance,  can  be  mam- 
tained,  unless  upon  an  express  promise  to  pay  this  balance,  the 
court  go  on  to  say  that,  in  Massachusetts,  this  is  unnecessary  ; 
and  the  suit  will  be  maintained  although  the  accounts  are  not 
closed  between  the  partners,  and  there  exist  outstanding  debts ; 
provided  these  debts  are  valueless,  or  the  plaintiff  tenders  them 
to  the  defendant  before  the  action,  (a) 

It  would  seem,  therefore,  that  the  phrase  "  final  balance  "  is 
not  used  in  a  very  strict  sense,  although,  in  another  part  of  the 
same  decision,  the  court  ask,  "  Is  the  account  a  final  balance, 
and  will  the  payment  in  this  suit  be  an  absolute  termination  of 
all  the  partnership  accounts  between  these  parties  ?"(^)  the 
last  clause  of  this  sentence  being  in  the  nature  of  a  definition 
of  a  final  balance. 

It  is  certain,  as  our  notes  show,  that  there  are  high  authori 
ties  which  recognize  a  rule  requiring  that  the  balance  should 
be  final,  meaning  that  the  accounts  should  be  closed  and  this 
balance  be  the  result,  and  that  there  should  be  also  an  express 

(«)  Williams  v.  Henshaw,  11  Pick.  81,  Gray,   376,  382.     In  Haskell   v.   Adams, 

82.  several  members   of  a   company  gave  its 

{b)  In  Williams  v.  Henshaw,  12  Pick,  agent  their  note,  which  was  discounted, 
378,  the  question,  as  stated  by  the  court  and  money  raised  for  the  use  of  the  corn- 
was,  "  whether  one  partner,  after  the  ex-  pany.  The  company  being  dissolved,  the 
piration  of  the  joint  concern,  or  even  after  partners  who  gave  the  note  brought  as- 
dissolution,  can,  at  any  time,  without  any  surapsit  against  another  partner  to  recover 
settlement,  without  any  agreement  with  or  the  proportion  of  the  amount  of  the  note 
notice  to  his  copartner,  by  assuming  all  due  from  him.  The  company  was  still  in 
the  outstanding  debts,  maintain  assumpsit  debt,  and  no  adjustment  of  their  atiairs 
against  him  for  any  balance  which  may  be  had  been  made.  It  was  held  that  the 
due."  The  court  held  that  he  could  not;  action  couhi  not  be  maintained, 
and  for  the  reason,  that,  notwithstanding  It  may  be  inferred  from  all  the  above 
a  judgment  for  the  plaintiff'  on  a  balance  cases  that  the  balance  which  is  treated  as 
thus  made  out,  "  in  many  ways  new  bal-  final  is  one  occurring  upon  the  dissolution 
ances  might  arise,  which  would  give  rise  of  the  firm.  And  in  Dickinson  v.  Granger, 
to  new  actions,  and  thus  create  a  multi-  18  Pick.  317,  the  court  say  expressly :  "A 
plicity  of  suits."  See  Brinley  v.  Kupfer,  final  balance  of  course  can  never  arise  till 
6  Pick.  179  ;  Sikes  v.  Work,  6  Gray,  433.  after  a  dissolution."  Before  one  partner 
In  Wilby  v.  Phinney,  15  Mass.  116,  the  can  sue  another  at  law,  there  must  be  a 
expression  "  final  balance  "  seems  to  be  dissolution,  a  final  settlement,  a  balance 
used  with  great  latitude.  See  Fanning  v.  struck,  and  a  promise  to  pay.  Balances 
Chadwick,  3  Pick.  420,  423  ;  Rockwell  v.  struck  preparatory  to  a  settlement  will  not 
Wilder,  4  Met.  561.  See  also  Haskell  v.  su]iport  an  action.  Burns  v.  Nottingham, 
Adams,  7  Pick.  59  ;  Capen  v.  Barrows,  1  60111.  561. 


262 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIII. 


promise  to  pay  this  balance,  (c)  But  this  is  going  further  than 
the  weight  of  authority,  and  much  further,  we  think,  than  the 
reason  of  the  case  extends.  The  later  English  authorities  appear 
to  have  established  the  rule  in  that  country,  that  an  express 
promise  is  not  necessary,  because  a  promise  is  implied  in  clos- 
ing the  accounts  and  stating  the  balance,  (d) 


(c)  That  there  must  be  an  express 
promise  to  pay  a  balance  seems  to  have 
been  held  by  BuUer,  J.,  in  Moravia  v.  Levy, 
2  T.  R.  483,  note  ;  though  in  Foster  v. 
Allauson,  2  T.  R.  479,  the  same  judge 
said  that  he  had  no  difficult}'  in  holding 
that  the  dissolution  of  a  previously  exist- 
ing partnership  and  the  settlement  of  an 
account  were,  in  point  of  law,  "a  sufficient 
consideration  for  a  {iromise  ; "  which  re- 
mark seems  as  applicable  to  an  implied  as 
to  ah  express  promise.  But  in  Fromont 
V.  Coujiland,  2  Bing.  170,  it  was  distinctly 
intimated  by  the  court,  mainly  upon  the 
authority  of  the  cases  just  cited,  and  con- 
trary to  tlie  nisi  prius  case  of  Rackstraw  v. 
Imber,  Holt  N.  P.  368,  that  there  must  be 
an  express  ))romise.  It  is  to  be  observed, 
however,  that  the  court  also  held,  that  no 
balance  had  been  struck  between  the 
parties,  and  that  the  case  was  decided, 
partly  at  least,  on  that  ground.  In  this 
country,  Fromont  i'.  Coupland,  and  Mo- 
ravia V.  Levy,  have  been  followed  in  quite 
a  number  of  the  States.  Thus,  in  New 
York,  one  partner  cannot  recover  a  balance 
of  accounts,  except  there  be  an  express 
promise  to  pay  it.  Casey  v.  Brush,  2 
("aines,  293  ;  Halsted  v.  Schmelzel,  17 
Johns.  80  ;  Westerlo  v.  Evertson,  1  Wend. 
532  :  Townsend  v.  Goewey,  19  Wend.  424  ; 
Pattison  v.  Blanchard,  6  Barb.  537.  So 
in  South  Carolina  :  Course  v.  Prince,  1 
Mill  C.  R.  416.  In  Illinois  :  Davenport 
V.  Gear,  3  111.  495  ;  Frink  v.  Ryan,  4  III. 
322  ;  Chadseyi-.  Harris,  11  111.  i51  ;  Blue 
V.  Leathers,  15  111.  32.  And  see  Wycoff  v. 
Purnell,  10  Iowa,  332.  In  Pennsylvania, 
the  early  cases  seem  to  hold,  that  the  prom- 
ise upon  which  one  partner  may  recover 
from  another  a  balance  of  accounts  need 
not  be  express.  Ozeas  v.  Johnson,  1  Binn. 
191,  4  Dall.  434 ;  Lamalere  v.  Caze,  1 
Wash.  C.  C.  435  ;  Hourguebie  v.  Girard, 
2  Wash.  C.  C.  212  ;  Williams;;.  Henshaw, 
11  Pick.  81.     But  in  Killam  v.  Preston,  4 


W.  &  S.  14,  the  court  seemed  inclined  to 
hold,  apparently  upon  the  authority  of  the 
earlier  English  cases,  that  the  jiromise 
must  be  express.  But  this  was  not  directly 
ruled.  And  in  Van  Amringe  v.  Ellmaker, 
4  Barr,  281,  the  court  held,  that,  conced- 
ing the  principle  that  assumpsit  will  not 
lie  by  one  partner  to  recover  from  the  other 
a  balance  due  upon  the  settlements  of  the 
partnership  accounts,  without  proof  of  an 
expi'ess  promise  to  pay,  yet  the  execution 
of  a  note  for  the  balance  due  after  settle- 
ment was  a  sufficient  express  promise.  See 
Brown  v.  Agnew,  6  W.  &  S.  235  ;  Hamil- 
ton V.  Hamilton,  18  Pa.  20.  Whether  an 
express  promise  is  requisite  in  New  Jersey 
and  in  North  Carolina,  see  Jaques  v.  Hulit, 

1  Harrison  (16N.  J.)38  ;  Gulick  i;.Gulick, 

2  Green  (14  N.  J.)  578  ;  Graham  v.  Holt, 

3  Led.  300. 

(d)  Rackstraw  v.  Imber,  Holt  N.  P. 
368.  The  plaintiff  and  defendant,  having 
dissolved  partnership,  met  to  adjust  their 
accounts.  The  defendant  admitted  a  cer- 
tain balance  to  be  due  from  him  to  the 
plaintiff,  and  offered  to  pay  it,  if  the  plain- 
tiff would  sign  a  certain  deed.  The  plain- 
tiff refused  to  sign  the  deed,  and  brought 
the  present  action  for  the  admitted  balance. 
It  was  held  that  he  was  entitled  to  recover. 
See  Henley  v.  Soper,  8  B.  &  C.  16,  21.  In 
Wray  o.  Milestone,  5  M.  &  W.  21,  the 
plaintiff  and  defendant,  beside  having  other 
general  dealings,  had  also  been  partners  in 
a  particular  adventure  for  the  purchase  and 
sale  of  wool.  They  came  to  a  general 
account,  of  which  a  debit  against  the 
defendant  for  loss  on  wool  formed  one 
item.  The  defendant  signed  the  account, 
and  admitted  the  balance  due.  The  pres- 
ent action  was  brought  to  recover  the 
amount  of  the  item  entered  in  the  account 
as  the  "loss  on  wool."  Upon  motion  for 
a  new  trial,  one  of  the  questions  was, 
whether  a  sufficient  promise  by  the  defend- 
ant was   proved.     Lord  Abinger,  C.  B.  : 


§  194.]  OF   THE   REMEDIES   OF   PARTNERS   INTER   SE.  263 

The  act  of  settling  the  account  and  striking  the  balance  is 
itself  the  plainest  acknowledgment  of  an  indebtedness  which  is 
wholly  liberated  from  all  complication  with  the  accounts  of  the 
partnership  :  it  grows  out  of  them,  but  only  out  of  their  termina 
tion  and  settlement.  Nor  can  we  doubt  that  this  rule  of  law 
must  prevail  in  this  country  also,  (e) 

Then,  as  to  the  question  whether  the  balance  must  be  a  final 
one,  we  cannot  but  think  that  it  is  quite  enough  if  it  be  a  balance, 
or  a  debt,  distinctly  separated  from  the  partnership  accounts, 
either  by  their  entire  settlement,  or  by  a  settlement  which  may 
be  partial  as  to  the  affairs  of  the  partnership,  but  complete  as  to 
this  debt.  If  not  absolutely  final,  perhaps  a  presumption  will 
always  exist  that  it  remains  connected  with  partnership  affairs. 
But,  as  it  is  perfectly  well  settled  that  a  partner  may  sue  his 
copartner  on  a  cause  of  action  which  never  pertained  to  the  part- 
nership, it  seems  quite  as  certain  that  he  should  have  his  action 
for  a  cause  which  he  can  show  to  have  been  cut  out  from  the  part- 
nership by  himself  and  his  partners  jointly,  and  to  be  as  completely 
separated  from  it  as  if  there  had  never  been  any  connection 
between  them. 

It  is  undoubtedly  necessary  that  all  the  partners  should  be  bound 
by  the  settlement,  or  by  the  agreement  by  which  this  matter  was 
separated  from  the  partnership.  (/)     In  few  words,  we  think  it 

"The  account  being  settled,  there  is  an  Exch.  43.     In  this  case,  a  promise  by  the 

unqualitied    acknowledgment,    signed    by  defendant  to  pay  the  plaintiff,  his  partner, 

the  defendant,  that  15/.  is  due  from  bim  the  sum  sued   for,  was  implied  from  the 

to  the  plaintiff  on  the  general  balance  of  defendant's  admission,  that,  through  his 

accounts    between    them."  .  .  .  "  If  the  own  improper  use  of  the  partnership  name, 

item  forms  part  of  a  settled  account,  with  the  plaintiff  had  been  compelled  to  expend 

a  promise  to  pay  the  balance,  I  think  there  that  sum  for  the  defendant's  sole  benefit, 
is  no  need  of  an  express  promise  to  pay  the  (c)  In  Massachusetts,  an  action  by  one 

particular  item."     Parke,  B.  :  "There  is  partner  against  another  to  recover  a  Vjalance 

no   occasion  to   go   thiough   the   form   of  of  accounts,    may  be   sustained   upon  an 

words  that  he  promises  :    the  transaction  implied   promise.      Williams  v.  Henshaw, 

speaks  for  Itself."     Maule,  B.  :  "I  know  11  Pick.  79  ;  Wilby  f.  Phinney,  15  Mass. 

of  no  rule  of  law  which  requires  in  this,  or  116,   121;  Brigham   v.    Eveleth,  9  Mass. 

in  any  other  case,  an  express  promise."    In  538;  Fanning  y.  Chadwick.  3  Pick.  420  ; 

Jackson  v.  Stopherd,  2  Cr.  &  M.  361,  to  Dickinson  v.  Granger,  18  Pick.  317.     So 

which  we  have  aln-aily  referred,  two  per-  also  in  Alabama,  MColl  v.  Oliver,  1  Stew, 

sons  who  had  worked  a  coal-mine  having  510  ;  Pope  v.  Randolph,  13  Ala.  214  :  and 

dissolved  partnership,  and  made  an  agree-  in  Vermont,  Spear  v.  Newell,  13  Vt.  288. 
ment  for  the  division  of  a  certain  portion  (/)   See  Gill  v.  Kuhn,  6  S.  &  R.  333  ; 

of  their  property,  the  nature  of  their  bar-  Coiir.se  v.  Prince,  1  Mill  C.  R.  416  ;  Bo.vill 

gain  for  the  division  and  the  subsequent  v.    Hammond,    6  B.   &  C.   149,   151,  per 

actual  use  by  one  partner   of  the  whole  Littledale,  J.  ;  Carr  r  Smith,  5  Q.  B.  128  ; 

jtroperty,    was   held   to   raise   an   implied  Chadsey  v.  Harris,  11  111.  151  ;  Morrow  v. 

obligation  on  him  to  pay  the  other  partner  Riley,  15  Ala.  710      One  partner  may  im- 

for  a  moiety  of  it.     Cross  v.  Cheshire,  7  pliedly   assent   to  and   be   bound   by  an 


264 


THE   LAW    OF   PARTNERSHIP. 


[CH.    VIII. 


not  necessary  that  the  balance  should  be  general  as  well  as  final ; 
but  it  is  sufficient  if  it  be  so  far  final  that  the  decision  of  the 
question  will  be  final  upon  all  parties,  and  that  nothing  which  can 
hapi)en  to  the  partnership  will  make  it  necessary  or  just  to 
review  this  decision,  {y) 


account  stated  So  lield,  per  Washington, 
J.,  in  Lanialere  v.  Caze,  1  Wash.  C.  C. 
437.  But  see  Killani  v.  Preston,  4  W.  &  S. 
14.  See  also  Beach  v.  Hotchkiss,  2  Conn. 
425  ;  Kobinson  v.  Williams,  8  Met.  454. 

((/)  It  seems  to  be  well  established  by 
the  English  cases  (to  some  of  which  we 
have  already  alluded),  that  the  balance  for 
which  a  suit  will  lie  between  partners  is 
not  necessarily  a  general  balance  of  all  the 
accounts  between  them,  but  may  be  a 
balance  in  respect  of  specific  njatters, 
which,  by  agreement,  have  lieen  insulated 
from  the  general  accounts.  So  in  Jackson 
V.  Stopherd,  2  Or.  &.  M.  361  ;  Cottee  v. 
Brian,  3  Bing.  54  ;  Cross  v.  Cheshire,  7 
Exch.  43  ;  Brown  v.  Tapscott,  6  M.  &  W. 
119.  So  where  a  balance  of  accounts  is 
taken,  and  a  note  given  as  the  balance, 
that  must  be  paid  ;  although  there  are 
subsequent  accounts  upon  which  the  [layee 
may  eventually  be  found  in  arrears. 
Preston  v.  Strutton,  1  Anst.  50.  Tlie 
plaintiff  and  defendant  were  partners  in  a 
stage-coach  company,  which  was  dissolved 
in  the  month  of  November.  The  plaintiff's 
action  was  for  the  recovery  of  certain 
balances  of  accounts,  by  which  it  appeared 
that, -during  the  partnershiji,  a  balance 
was  struck  every  month  ;  and  that  for  the 
months  of  September,  October  and  No- 
vember, balances  had  been  found  due  from 
the  defendant  to  the  plaintiff,  though  the 
balance  for  November  had  since  been  paid. 
It  was  held  that  the  plaintiff  might  recover 
the  balances  in  his  favor  on  the  September 
and  October  accounts.  Brierly  v.  Cripps, 
7  C.  &  P.  709  ;  Carr  v.  Smith,  5  Q.  B.  128. 
In  Vermont,  a  ])artner  can  recover  only  a 
balance  found  due  to  him  upon  dissolution, 
and  after  the  adjustment  of  all  the  i)art- 
nership  dealings.  Spear  v.  Newell,  13  Vt. 
288;  Warren  v.  Wheelock,  21  Vt.  323. 
See  Sawyer  v.  Proctor,  2  Vt.  580.  The 
same  is  true  in  Illinois.  Davenport  v. 
Gear,  3  111.  495  ;  Chadsey  v.  Harrison,  1 1 
111.  151  ;  Burns  v.  Nottingham,  60  111. 
531  ;  and  is  apparently  the  doctrine  of  the 


following  cases  :  Graham  v.  Holt,  3  Ired. 
300  ;  Pope  v.  Randolph,  13  Ala.  214 ; 
Killam  v.  Preston,  4  W.  &  S.  14  ;  Haldei- 
man  v.  Halderman,  1  Hempst.  558  ;  Chase 
V.  Garvin,  19  Me.  211.  The  proposition  of 
the  text  is  sustained  in  the  case  of  Gibson 
V.  Moore,  6  N.  H.  547,  in  which  all  the 
leading  authorities  are  reviewed,  and  a 
conclusion  reached  which  seems  to  be 
founded  both  upon  the  better  authority 
and  the  better  reason.  There  the  plaintiff 
and  defendant  had  been  partners.  A 
controversy  having  arisen  respecting  some 
of  their  ])artnership  affairs,  they  referred 
the  matters  in  dispute  to  arbitration.  The 
referees  awarded  that  the  defendant  should 
pay  the  plaintiff  $88.08,  and  the  defendant 
promised  to  pay  the  award.  But  there  had 
been  no  settlement  of  the  general  concerns 
of  the  partnership,  nor  any  final  balance 
struck.  The  present  action  was  assumpsit 
on  the  award,  and  the  court  held  that  it 
might  be  maintained.  Parker,  J.,  said  : 
"  In  the  present  case,  there  has  been  no 
final  balance  struck.  The  settlement  of 
the  partnership  concerns  generally  still 
remains  to  be  made.  But,  by  agreement 
between  the  parties,  in  relation  to  a 
specific  portion  of  the  partnership  trans- 
actions a  final  adjustment  has  been  made. 
The  partners  have  agreed  to  close  thus  far, 
and  one  has  agreed  to  pay  the  other  a 
certain  sum  notwithstanding.  Nor  is  it 
of  any  importance  that  the  debts  of  the 
partnershij)  are  not  all  paid,  if  such  be  the 
fact.  Creditors  cannot  object.  They  will 
have  the  responsibility  of  both  partners 
still,  nor  is  the  jiayment  of  money  by  one 
partner  to  the  other  to  their  p»rejudice.  If 
it  was,  that  could  not  prevent  the  part- 
ners from  adjusting  the  concerns  between 
themselves,  so  as  to  create  a  liability  from 
one  to  the  other.  They  are  not  parties 
here,  nor  their  rights  in  question.  If 
partners  can  pledge  the  partnership 
property  for  the  debt  of  an  individual 
partner,  and  creditors  cannot  hold  it 
(Whitney  v.  Dean,  5  N.    H.  249),  they 


196.] 


OF   THE   REMEDIES   OF   PARTNERS   INTER   SE. 


265 


§  195.  "What  is  a  Settlement  of  Accounts  ?  —  It  is  of  no  impor- 
tance how  the  settlement  has  l)een  made ;  whether  by  the  parties, 
or  by  law,  or  by  arbitration,  (h)  Indeed,  a  suit  on  an  award  has 
been  maintained,  where  the  partners  submitted  "  all  differences  " 
between  them  to  the  arl)itrators,  on  the  ground  that  an  award  in 
such  a  case  is  a  final  settlement  of  the  partnership  :  and  this  rule 
was  applied  in  one  case  where  tlie  plaintiff  could  not  have  sued 
the  defendant  on  the  agreement  to  submit.  (0 

So  where  the  settlement  did  not  embrace  all  the  debts,  some  of 
no  great  amount  being  left  outstanding,  the  plaintiff  was  per- 
mitted to  enter  a  remittitur  as  to  these,  (y)  It  is  said  that  if 
there  be  a  dissolution  or  expiration  of  the  period  of  partnership, 
no  partner  can,  without  the  consent  of  his  copartner,  assume  all 
the  outstanding  debts  as  belonging  to  him,  and,  allowing  their 
full  value,  so  strike  a  balance,  and  sue  his  copartner,  (k)  But  it 
must  be  true  that  the  mere  existence  of  outstanding  debts  ought 
not,  of  itself,  to  defeat  the  right  of  a  partner  to  an  action  at  law, 
if  everything  but  these  debts  is  settled  and  determined,  and  he  is 
willing  either  to  take  them  all  at  their  face,  or  allow  and  transfer 
them  all  to  his  partner  as  of  no  value  whatever.  (Q 

§  196.   Mistake   in   Accounts.  —  If    the    accounts    have    been 


may  surely  make  any  adjustment  of  the 
partnership  interests  among  themselves 
that  they  think  expedient."  And  see, 
upon  the  same  point.  Sawyer  v.  Proctor,  2 
Vt.  580  ;  Vau  Ness  v,  Forrest,  8  Crauch, 
30. 

It  seems  to  be  established,  both  in 
England  and  in  this  country,  that,  if  the 
partnership  affairs  are  so  nearly  adjusted 
that  there  remains  but  a  single  item  to 
li(iuidate,  one  partner  ma}'  maintain  an 
action  against  his  copartner  for  a  balance 
due  him  growing  out  of  the  partnership 
transactions,  such  balance  being  so  far 
final  as  to  remove  the  difRc.ulty  as  to  part- 
nership. Robson  I'.  Curtis,  1  Stark.  78  ; 
Bovill  V.  Hammond,  6  B  &  C.  149,  per 
Bayley,  J.,  dissent ieiUe ;  Musier  v.  Trum- 
])0ur,  5  Wend.  274  ;  Westerlo  v.  Evertson, 
]  Wend.  534  ;  Gibson  v.  Moore,  6  N.  H. 
549  ;  Clark  v.  Dibble,  16  Wend.  603 ; 
Byrd  v.  Fox,  8  Mo.  574  ;  Brubaker  v. 
Robinson,  3  Pen.  &  W.  295  ;  Van 
Amringe  v.  Ellmaker,  4  B:irr,  283. 

(h)  Henly  v.  Soper,  8  B.  &  C.  16,  20. 
[Abell  V.  Piiillips  (Ky.),  13  S.  W.  109.] 
See  Gibson  v.  Moore,  6  N.  H.  547  ;  Brierly 


V.  Cripps,  7  C.  &  P.  709  ;  Preston  v. 
Stratton,  1  Anst.  50  ;  Wray  v.  Milestone, 
5  M.  &  W.  21. 

(i)  Winter  V.  White,  3  J.  B.  Moore, 
674.  See  Buruell  v.  Minot,  4  J.  B.  Moore, 
340. 

(J  Brinley  v.  Kupfer,  6  Pick.  179.  See 
cases  at  end  of  preceding  note,  and  Sikes 
V.  Work,  6  Gray,  433  ;  Frink  v.  Ryan,  4 
111.  322. 

{k)  Williams  v.  Henshaw,  12  Pick. 
378. 

(0  Rockwell  V.  Wilder,  4  Met.  556, 
561.  The  existence  of  outstanding  debts 
due  the  firm  will  not  necessarily  defeat  an 
action  of  assumpsit  between  ]iartners  for 
a  balance,  if  the  plaintiff  show  that  the 
outstanding  debts  are  incapable  of  collec- 
tion, and  thus  that  the  judgment  rendered 
will  make  a  final  settlement  between  the 
partners.  And  in  such  case,  especially 
if  an  assignment  of  all  the  outstanding 
debts  be  seasonably  given  or  tendered  to 
the  other  party,  the  action  may  be  sus- 
tained. Per  Morton,  J.,  in  Williams  v. 
Henshaw,  11  Pick.  79. 


266 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIII. 


settled,  and  one  partner  can  prove  tliat  he  paid  too  much  to  the 
other,  by  some  mistake  or  ignorance  of  fact  or  of  accounting, 
there  would  not  seem  to  be  any  reason  —  unless  one  should  grow 
out  of  the  peculiar  circumstances  of  the  case — to  prevent  him 
from  recovering,  at  law,  what  he  has  thus  overpaid,  {m) 

In  New  Hamjishire,  it  is  provided  by  statute  that  "  any  copart- 
ner or  joint-owner  may  maintain  an  action  of  assumpsit  against 
one  or  more  of  his  copartners  or  joint-owners,  to  recover  his  just 
share  of  any  goods  or  chattels,  choscs  in  action,  or  the  proceeds 
thereof,  received  by  such  copartners  or  joint-owners,  and  not 
accounted  for,  delivered,  paid,  or  otherwise  settled  for  on 
demand."  (n) 

§197.  Contract  to  Render  Accounts.  —  If,  in  the  articles  of 
partnership,  or  even  independently  of  them,  one  partner  cove- 


(?)j)  Bond  V.  Hays,  12  Mass.  34  ;  Chase 
V.  Garvin,  19  Me.  211.  If  an  account 
between  partners  has  been  stated,  in 
which  there  is  a  manifest  error  in  the 
figures,  or  in  the  principles  u[)on  which  it 
is  adjusti'd,  the  amount  really  due  to  the 
injured  party  may  be  recovered  in  assump- 
sit, leaving  the  dissolution  and  settlement 
otherwise  unaffected.  But  where  there  is 
no  actual  adjustment  of  accounts,  and  one 
partner  purchases  the  interest  of  another 
for  a  gross  sum,  but  the  purchase  is 
affected  by  fraud,  the  defrauded  partner 
may  wholly  avoid  the  contract,  and  have 
the  accounts  reopened  ;  but  his  remedy  is 
in  equity.     Chase  v.  Garvin,  supra. 

Upon  the  principle  stated  in  the  text, 
if,  after  the  dissolution  of  a  partnership, 
settlement  of  the  accounts,  and  division 
of  the  profits,  some  of  the  former  partners, 
from  causes  arising  subsequently  to  the 
dissolution,  are  compelled  to  incur  heavy 
expenses  on  the  account  of  the  former 
partnership,  an  action  would  apparently 
lie  by  them,  against  the  other  partners,  to 
recover  their  proportion  of  such  ex))end- 
iture.  Graham  v.  Robertson,  2  T.  R.  282. 
See  Kennedy  v.  M'Fadon,  3  Harris  &  J. 
194.  So  if  a  partnership  has  been  dissolved, 
and  the  partnership  accounts  adjusted, 
and  one  partner  is  afterwards  obliged  to 
pay  an  outstanding  claim  not  provided 
for,  he  may  maintain  assumpsit  against 
his  copartner  for  the  proportion  of  it  which 
the  latter  ought  to  pay  by  reason  of  his 
joint  liability.     Brown  i;.  Agnew,  6  W.  & 


S.  235,  238.  [Whetstone  v.  Shaw,  70  Mo. 
575.]  See  Dickinson  v.  Granger,  18  Pick. 
315,  317  ;  Kelley  v.  Kauffman,  18  Pa. 
351.  But  an  agreement  between  two  part- 
ners after  dissolution,  to  the  effect  that 
they  would  "quit  even"  to  avoid  the 
expenses  of  a  chancery  suit,  does  not 
authorize  one  to  maintain  an  action  at 
law  against  the  other  to  recover  con- 
tribution for  a  partnership  debt  subse- 
quently paid.  De  Jarnette  v.  McQueen,  31 
Ala.  230.  See  Fanning  v.  Chadwick,  3 
Pick.  420.  One  partner  may  sue  another 
for  money  advanced,  if  the  transaction  be 
single,  not  involving  the  rights  of  credi- 
tors, or  an  adjustment  of  partnership 
accounts.  Russell  v.  Grimes,  46  Mo.  410  ; 
Finlay  v.  Stewart,  56  Pa.  183.  See  also 
Wells  V.  Simonds,  51  How.  Pr.  48.  Or 
for  his  share  of  the  declared  profits,  if  by 
mutual  agreement  one  ])artner  is  made 
general  manager,  and  is  from  time  to  time 
to  pay  over  declared  dividends  of  profit  to 
the  others.  Wadley  v.  Jones,  55  Ga.  329. 
Or  for  his  share  of  the  assets  after  dissolu- 
tion and  actual  division.  Hunt  v.  Morris, 
44  Miss.  314  ;  Dakin  v.  Graves,  48  N.  H. 
45.  Or  for  money  paid  on  a  firm  debt, 
which,  on  dissolution,  the  other  partner 
had  agreed  on  receipt  of  the  assets  to  pay. 
Hinkie  v.  Reid,  43  Ind.  300.  Or  for  a 
sum  agreed  by  one  partner  to  be  paid  to 
the  other,  for  his  interest  in  the  concern. 
Wells  V.  Carpenter,  65  111.  447. 

(w)  Revised    Statutes  of  New  Hamp- 
shire, ch.  180,  §  4,  p.  358. 


§  198.] 


OF   THE    REMEDIES    OF   PARTNERS   INTER   SE. 


267 


nants  with  another  that  he  will  account,  it  seems  clear  that  an 
action  of  covenant  lies  for  a  breach,  (o)  And  it  was  said,  some 
years  since,  in  Massachusetts,  that  assumpsit  would  lie  on  such  a 
promise  between  j)artners.  («?)  Such  an  action  would  be  main- 
tained now  everywhere. 

§  198.  Demand  for  Contribution.  —  A  difference  has  been  made 
between  an  action  at  law  between  partners  for  contribution,  and 
those  we  have  been  considering,  for  which  it  is  not  easy  to  see 
sufficient  reason.  Courts,  at  least  in  England,  seem  to  have  held, 
or  judges  have  said,  that  a  partner  who  has  paid  money  for  the 
partnership,  may,  generally,  sue  his  copartners  for  contribution,  (q) 


(o)  Foster  v.  Allanson,  2  T.  R.  479  ; 
Want  V.  Reece,  1  Bing.  18;  Owston  v. 
Ogle,  13  East,  538  ;  Duncan  v.  Lyon,  3 
Johns.  Ch.  362  ;  Bailey  v.  Starke,  6  Ark. 
191.  See  Niven  v.  Spickernian,  12  Johns. 
401. 

ip)  "Wilby  V.   Phinney,  15  Mass.  120. 

{q)  The  rule  usually  laid  down  upon 
this  point  is,  that  contribution  may  be 
obtained  in  an  action  of  assumpsit  by  one 
partner  against  another,  for  money  laid 
out  for  the  defendant's  use.  But  it  has 
always  rested  rather  upon  the  dicta  of 
eminent  judges  than  upon  the  authority 
of  adjudged  cases,  and,  in  the  general 
form  in  which  it  has  been  customary  to 
state  it,  may  be  considered  as  no  longer 
supported  even  by  the  weight  of  English 
authoritj'.  See  Abbott  v.  Smith,  2  W. 
Bl.  947.  Other  cases  and  dicta  which  are 
sometimes  cited  in  support  of  the  right  to 
contribution  between  partners,  we  have  al- 
ready referred  to  ;  and  they  are,  we  think, 
better  explained  upon  other  grounds. 
See  Wright  v.  Hunter,  5  Ves.  792;  §  187, 
and  note ;  Holmes  v.  Williamson,  6 
Maule  &  S.  159  ;  Blackett  v.  Weir,  5  B. 
&  C.  385,  388  ;  Evans  v.  Yeatherd,  2 
Bing.  133.  Wooley  v.  Batte,  2  C.  &  P. 
417,  is,  perhaps,  the  most  direct  adjudica- 
tion in  favor  of  contribution  at  law  be- 
tween partners.  See  Milburn  v.  (.'odd,  7  B. 
&  C.  419,  per  Bailey,  J. 

Mr.  Gow,  in  the  first  and  second  edi- 
tions of  his  work  on  Partnership,  laid 
down  the  rule  that,  "in  an  action  of 
assumpsit,  for  money  paid  to  his  use,  one 
partner  may  enforce  from  his  copartner 
contribution  towards  a  debt,  which  the 
single  partner  may  have  discharged,  but 


for  which  the  firm  were  jointly  liable." 
Gow  on  Part.  (2d  ed.)  90.  In  the  sub- 
sequent editions,  however,  the  rule  is 
greatly  (jualitied,  and  its  operation  re- 
stricted to  the  case  of  partners  in  a  single 
transaction.  For  the  rule  in  its  changed 
and  limited  shape,  he  cites  numerous 
cases.  Abbott  v.  Smith,  2  W.  Bl.  947  ; 
Merry  weather  v.  Nixon,  8  T.  R.  186  ; 
Evans  v.  Yeatherd,  2  Bing.  133  ;  Merries 
V.  Jamieson,  5  T.  R.  556,  per  Lord  Ken- 
yon  ;  Ansell  v.  Waterhouse,  6  M.  &  S. 
390,  per  Bayley,  J.;  Holmes  v.  Williamson, 
6  M.  &  S.  i58  ;  Carlen  v.  Drury,  1  Yes.  6t 
B.  157  ;  Wright  v.  Hunter,  5  Ves.  792  ; 
Burnell  v.  Miuot,  4  J.  B.  Moore,  340. 
But  these  cases  seem  to  be  very  far  from 
establishing  the  proposition  for  which  they 
are  cited.  In  some  of  them  are  to  be  found 
dicta  of  judges  asserting  the  general  right 
of  contribution  between  joint  defendants  ; 
in  some,  contribution  is  actually  enforced, 
but  between  persons  who  are  not  partners, 
but  simply  joint  contractors,  or  otherwise 
jointly  connected  ;  while  in  others,  the 
question  before  the  court  is  the  compe- 
tency of  a  witness,  his  competency  de- 
pending upon  his  liability  to  contribute, 
either  in  law  or  in  equity,  to  a  demand 
which  his  testimony  establishes.  The 
distinction,  if  any,  which  these  cases 
suggest,  is  one  between  persons  who  are 
simply  joint  contractors,  and  between 
those  who  hold  to  each  other  the  closer 
relation  of  partners  ;  that  is,  it  i.s  between 
parties  who  are  partners,  and  those  who 
are  not,  and  not  between  different  kinds 
of  partners.  And  the  difference  as  to  the 
right  of  contribution,  between  those  who 
are  partners  and  those  who  are  merely  co. 


268 


THE   LAW    OF   PARTNERSHIP. 


[CH.    VIII. 


This  is  the  more  remarkable,  because  the  whole  doctrine  of  con- 
tribution is  originally  only  equitable.  Every  reason  against  other 
actions  at  law,  between  copartners,  would  seem  to  apply  to  those 
for  contribution.  One  partner  pays  money  to-day,  and  another 
to-morrow;  and  the  only  way  of  determining  the  questions  which 
might  arise  from  such  payments  would  seem  to  be,  to  credit  the 
paying  partner  with  the  amount  he  pays,  and  give  this  item  its 
due  place  and  weight  in  the  general  account  of  the  partnership. 
We  find  but  little,  or  rather  notliing,  in  American  jurispru- 
dence, (r)  and  nothing  in  the  reason  of  the  case,  to  sustain  an 
action  at  law  by  a  partner  against  his  partner  for  contribution, 
unless  the  facts  of  the  case  and  the  whole  character  of  the  trans- 
action insulate  it  from  the  general  accounts  of  the  partnership, 
and  bring  it  within  those  reasons  which,  as  we  have  said,  seem  to 
us  sufficient  to  sustain  any  action  at  law  between  partners,  (s)  ^ 


debtors  or  co-contractors,  as  well  as  the 
reason  for  it,  is  obvious.  They  are  thus 
stated  by  the  court  in  White  v.  Harlow,  5 
Gray,  463,  468:  "Where  two  indepen- 
dent parties  owe  a  joint  debt,  and  one 
pays  the  whole,  which  he  may  be  com- 
pelied  to  do  by  the  creditor,  the  law,  in  the 
absence  of  any  express  agreement  of  sucli 
debtors,  implies  a  promise  of  the  co- 
debtor,  to  him  who  has  thus  paid  the 
whole,  to  pay  him  one-half  of  the  com- 
mon debt  thus  discharged.  But,  when 
one  partner  thus  pays  the  whole  debt,  the 
law  implies  no  such  promise  :  it  merely 
authorizes  him  to  charge  the  whole  to  the 
firm  in  partneiship  account,  of  which  he 
will  have  the  benefit,  as  a  credit  on  settle- 
ment of  that  account,  voluntarily,  or  by 
a  suit  in  equity." 

(r)  The  American  authorities,  indeed, 
seem  to  be  against  the  right  of  contribu- 
tion as  between  partners.  And  in  this 
respect  no  distinction  is  made  between 
trading  and  professional  partnerships. 
Westerlo    v.    Evertson,    1     Wend.     532 ; 


Gridley  v.  Dole,  4  Mill,  C.  R.  486  ;  Law- 
rence V.  Clark,  9  Dana,  257  ;  Kennedy  v. 
McFadon,  3  H.  &  J.  194  ;  Bracken  v. 
Kennedy,  4  111.  564  ;  Brown  v.  Agnew,  6 
\V.  &  S.  238  ;  Roberts  v.  Fitter,  13  Pa. 
265  ;  Haskell  v.  Adams,  7  Pick.  59  ; 
White  V.  Harlow,  5  Gray,  463  ;  Morin  v. 
]\Iartin,  25  Mo.  360  ;  De  Jarnette  v.  Mc- 
Queen, 31  Ala.  230. 

(s)  As  where  one  partner  claims  con- 
tribution of  another  in  respect  of  some 
transaction  whicli  has  been  separated  from 
the  partnership  accounts ;  or  has  arisen 
after  dissolution  and  settlement ;  or  is  a 
consequence,  not  of  the  relations  of  the 
partners  inter  se,  but  of  their  relations  to 
third  persons.  Graham  v.  Kobertson,  2 
T.  K.  232  ;  Brown  v.  Agnew,  6  W.  &  S. 
235  ;  Kelly  v.  Kauffman,  18  Pa.  351.  Or 
where  the  parties  to  tlie  suit  for  contribu- 
tion are  to  be  regarded  as  joint  contract- 
ors, or  in  any  other  light  than  as  partners. 
Ansell  V.  Waterhouse,  6  M.  &  S.  390  ; 
Holmes  v.  Williamson,  6  M.  &  S.  158  ; 
Burnell  v.   Minot,   4  J.  B.    Moore,   340  ; 


^  The  general  rule  is  that  a  partner  cannot  sue  for  contribution,  even  after  dissolu- 
tion, till  the  accounts  are  settled  ;  since  it  cannot  be  known  until  that  time  whether 
one  partner  is  indebted  to  the  firm  or  to  the  other  partner.     Ante,  §  185,  note  1. 

But  after  an  accounting  has  been  had,  one  partner  who  has  been  since  called  upon 
to  pay  a  firm  debt  not  included  in  the  account  may  maintain  an  action  for  contribu- 
tion. Sears  v.  Starbird.  78  Cal.  225,  20  Pac.  547  ;  Jepson  v.  Beck,  78  Cal.  540,  21 
Pac.  184 ;  Whetstone  v.  Shaw,  70  Mo.  575  ;  Logan  v.  Trayser,  77  Wis.  579,  46  N. 
W.  877. 


§  200.] 


OF  THE   REMEDIES   OF   PARTNERS   INTER   SE. 


269 


SECTION   III. 

QUESTIONS    BETWEEN    PARTNERS  COGNIZABLE    ONLY    IN    EQUITY. 

§  199.  Equitable  Jurisdiction  over  Partnership  Affairs.  —  The 
reasons  which  have  already  been  given  for  the  refusal  of  courts 
of  law  to  sustain  generally  actions  between  partners,  indicate, 
with  sufficient  clearness,  the  classes  of  cases  in  which  courts  of 
equity  give  relief.  It  may  be  said  that  they  will  give  relief  wher- 
ever law  will  not,  and  that  it  is  the  general  rule  that  law  will  not 
sustain  suits  l)etween  partners.  The  preceding  section  may  be 
considered  as  stating  the  exceptions  to  this  rule ;  and  all  cases 
which  do  not  come  under  one  or  other  of  these  exceptions  come 
under  the  rule. 

§  200.  Demands  between  Firms  having  a  Common  Member.  — 
One  important  class  of  actions,  in  which  suits  at  law  are  not 
maintainable,  needs  more  particular  attention.  It  consists  of  cases 
in  which  one  firm  has  a  cause  of  action  against  another  firm,  and 
there  is  some  one  person  who  is  a  member  of  both  firms.  There 
can  be  no  action  at  law  between  those  firms,  (t}    There  is  a  rule 


Edger  v.  Knapp,  6  Scott  N.  R.  707,  712  ; 
Sedgwick  V.  Daniel],  2  H.  &  N.  319  ; 
Forbes  v.  "Webster,  2  Vt.  58  ;  Dupuy  v. 
Johnson,  1  Bibb,  562.  Or  where  there  is 
a  special  agreement  between  partners 
authorizing  one  of  them  to  lay  ont  money 
on  partnership  account,  with  a  stipulation 
that  they  will  each  contribute,  in  due 
proportion,  such  sums  as  may  be  neces- 
sary to  reimburse  him.  Brown  v.  Tap- 
scott,  6  M.  &  W.  119  ;  Geddes  v.  Wallace, 
2  Bligh,  270  ;  Waugh  v.  Carver,  2  H.  Bl. 
235  THuttou  V.  Eyre,  6  Taunt.  289  ;  Li 
re  Webb,  2  J.  B.  Moore,  500  ;  Murray  v. 
Bogert,  14  Johns.  318.  There  must  be 
actual  payment  of  a  joint  debt,  before  one 
{)artner  can  recover  contribution.  Max- 
well V.  Jameson,  1  B.  &  Aid.  51  ;  Taylor 
V.  Higgins,  3  East,  169  ;  Gumming  v. 
Hackley,  8  Johns.  202.  See  Dunn  v. 
Lee,  1  J.  B.  Moore,  2  ;  Barclay  v.  Gooch, 
2  Esp.  571  ;  Ex  parte  Sergeant,  1  Glyn  & 
J.  183.  Neither  will  a  suit  for  contribu- 
tion he  maintained,  either  at  law  or  in 
equity,  in  consequence  of  a  recovery 
against  one  partner  under  a  judgment  in 


an  action  on  a  tort.  Merryweather  r. 
Nixon,  8  T.  R.  186  ;  Ansell  v.  Water- 
house,  6  M.  &  S.  390  ;  Vose  v.  Grant,  15 
Mass.  521  ;  Thweatt  v.  Jones,  1  Rand. 
328  ;  Dupuy  v.  Johnson,  1  Bibb,  565 ; 
Pecks  V.  Ellis,  2  Johns.  Ch.  131  ;  Lingard 
V.  Bromley,  1  Ves.  &  B.  114,  117.  See 
also  Seddon  v.  Connell,  10  Sim.  79,  86 ; 
Attorney-General  v.  "Wilson,  Craig  &  Ph. 
1,  28;  Miller  v.  Fenton,  11  Paige,  18. 
As  to  rights  arising  from  payments  of 
money  under  illegal  contracts,  see  Aubert 
V.  JIaze,  2  B.  &  P.  371  ;  Ex  parte  Bell, 
1  M.  &  S.  752  ;  Watson  v.  Fletcher,  7 
Gi-att.  1  ;  Sullivan  v.  Greaves,  Park  on 
Ins.  8.  See  Booth  v.  Hodgson,  6  T.  R. 
405  ;  Tenant  v.  Elliott,  1  B.  &  P.  3  ; 
Farmer  v.  Russell,  1  B.  &  P.  296  ;  Sharp 
V.  Taylor,  2  Phillips  Ch.  801,  818;  Thomp- 
son  V.  Thompson,  7  "Ves.  473  ;  Anderson 
V.  Moncrieff,  3  Dess.  Ch.  124.  See  Edgar 
V.  Fowler,  3  East,  222.  A  partner  who 
redeemed  lands  of  the  firm  from  execution 
was  held  entitled  to  contribution,  in 
Downs  V.  Jackson,  33  111.  464. 

(i)  Bosanquet  v.  Wray,  6  Taunt.  598; 


270 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIII. 


which,  though  technical,  or  rather  formal,  would  suffice  to  prevent 
it.  It  is  the  rule  which  prevents  the  same  party  from  being  both 
plaintiff  and  defendant  of  record  ;  for  then  a  man  would  sue  him- 
self. We  have  already  remarked  that  a  partnership  j)ossesscs  a 
kind  of  personality,  and  that  it  is,  for  many  purposes,  a  kind  of 
corporation.  The  law  of  partnership,  as  it  is  incorporated  into 
the  common  law,  acknowledges  this  substantially  as  the  founda- 
tion of  its  whole  system ;  but  it  never  acknowledges  it  formally. 
The  names  of  all  the  partners  —  as  a  general  rule  —  must  be  set 
forth,  both  as  to  the  plaintiffs  and  the  defendants.  They  should 
be  described  as  "  co-partners,  under  the  name  and  style  of  A.,  B. 
&  Co."  But  these  words,  however  usual  and  proper,  and  for  some 
purposes  necessary,  are,  in  law,  words  of  descrij)tion  ;  and  A.  B. 
<fe  C.  can  no  more  sue  A.  D.  &  E.  than  A.  can  sue  A.  In  addition 
to  this  technical  reason,  however,  it  may  be  said  that  such  suits 
would  frequently  involve  an  intricate  combination  of  interests,  to 
which  the  processes  of  law  are  not  adequate.  If  the  plaintiff  firm 
recover,  in  such  a  case,  A.  would  receive  a  sum  which  he  must 
contribute  to  raise,  and  the  account  might  possibly  involve  all  of 
those  of  both  partnerships.     This,  with  the  entire  sufficiency  of 


Maiuwaring  v.  Newman,  2  B.  &  P.  120  ; 
Motfatt  V.  Van  Milligen,  2  B.  &  P.  124, 
note ;  Jones  v.  Yates,  9  B.  &  C.  532  ; 
Griffith  V.  Chew,  8  S.  &  R.  30 ;  Portland 
Hank  v.  Hyde,  11  Me.  196  ;  Eastman  v. 
Wright,  6  '  Pick.  320,  321  ;  Graham  r. 
Hariis,  5  Gill  &  J.  489  ;  Barley  v.  Harris, 
8  N.  H.  235  ;  Rogers  v.  Rogers,  5  Ired. 
E4.  31 ;  Calvin  v.  Markliam,  3  How. 
(Miss.)  343  ;  Green  v.  Chapman,  27  Vt. 
236  ;  Englis  v.  Fnrniss,  4  E.  D.  Smith, 
587  ;  Haven  v.  White,  39  111.  509.  Upon 
the  same  principle,  a  plaintiff  cannot 
summon  himself,  nor  can  several  plaintiffs 
summon  one  of  their  own  number,  as  a 
trustee,  in  the  process  of  foreign  attach- 
ment. Belknap  v.  Gibbens,  13  Met.  471. 
See  Portland  B.uik  v.  Hyde,  11  Me.  196. 
And  where  there  are  two  firms,  with  a 
partner  common  to  each,  in  an  action 
against  one  of  them  the  other  cannot  be 
summoned  as  trustee  ;  for  the  reason  that 
tlie  trustee  process  is  a  mode  of  enforcing 
hy  a  suit  at  laio  the  contract  between  the 
trustee  and  the  principal  debtor,  for  the 
benefit  of  the  creditor  of  the  latter. 
Denny  v.  Metcalf,28  Me.  389. 


In  Pennsylvania,  by  act  of  April  14th, 
1838,  it  was  enacted  that  no  action  by 
partners  or  several  persons  against  part- 
ners or  several  persons  should  abate,  nor 
the  action  be  defeated  by  reason  of  one  or 
more  individuals  being  or  having  been 
members  of  both  firms,  or  being  or  having 
been  of  the  parties  plaintiffs,  and  also  of 
the  parties  defendants,  in  the  same  suit ; 
the  acts  and  declarations  of  the  partner 
or  persons  so  being  of  both  the  parties, 
plaintiffs  and  defendants,  to  affect  each 
party  res{)ectively  to  the  same  extent  as 
the  acts  and  declarations  of  the  other 
partners  or  persons,  plaintiffs  or  defend- 
ants, would  affect  the  respective  firms  or 
parties  ;  provided,  that  no  act  or  declara- 
tion of  the  party  shall  be  given  in  evi- 
dence in  his  own  favor  to  the  prejudice  of 
others.  For  cases  under  this  statute,  or 
bearing  upon  it,  see  Hepburn  v.  Curts,  7 
Watts,  300  ;  M'Fadden  v.  Hunt,  5  W.  k 
S.  468  ;  Tassey  v.  Church,  5  W.  &  S. 
468  ;  McConkey  v.  Rogers,  Brightly  N. 
P.  450.     [See  post,  §  229.] 


§  202.]  OF   THE    REMEDIES   OF   PARTNERS   INTER   SE.  271 

equity  for  such  cases,  has  doubtless  prevented  courts  or  legisla- 
tures from  annulling  or  modifying  this  rule.^ 

§  201.  Effect  of  Death,  &c.,  of  the  Commo.i  Member.  — It  is  applied 
with  equal  strictness  after  the  death  of  the  partner  common  to 
both  firms,  or  of  any  other  partner,  and  after  the  dissolution  of  the 
partnership  in  any  way.  (v)  The  foundation  of  the  rule  is,  that  a 
party  cannot  sue  himself,  because  he  cannot  contract  with  him- 
self ;  and,  therefore,  there  never  was  a  valid  contract  at  law  between 
these  two  firms.  (?^')  But  an  action  may  be  maintained  on  any 
transactions  subsequent  to  the  deatli  of  the  common  partner,  or 
his  withdrawal  from  either  firm,  (a;)  So  far  as  this  disability  is 
merely  technical,  it  may  be  doubted  whether  it  exists  in  tlie  case 
of  a  dormant  or  secret  partner. 

§  202.  Dormant  Partner  as  Party  to  Suit.  —  The  rule  Seems  to  be, 
that  the  creditors  of  a  partner  are  not  obliged  to  include  the  name 
of  a  secret  partner  among  the  defendants.  (^)  There  is  an  obvious 

{v)  Bosanquet  v.  Wray,  6  Taunt.  598  ;  sues   a  defendant,    with  whom    alone  he 

De   Tastet  v.  Shaw,   1    B.    &   Aid.    664  ;  believes   he   has   contracted   but   who   in 

Burley  v.  Harris,  8  N.  H.  235;    Portland  truth  has  a  dormant  partner,  the  defendant 

Bank  v.  Hyde,  11  Me.  196.     See  Englis  w.  may  plead  in  abatement  that  his  partner 

Furniss,  4   E.  D.    Smith,    587.      And    in  ought  to  be  joined,  unless  it  be  shown  that 

Ohio,  a  surviving  partner  cannot  maintain  the    interest  of    the  plaintiff  is  thereby 

proceedings  in  rem  for  supplies  furnished  materially  altered,  and  that  it  is  no  injury 

by  the  copartnership  to  the  vessel  of  his  to  the  plaintiff   to  compel  him  to  bring 

copartner  ;    the    water-craft    law   of    that  a  new  action  against  the  two,  and  to  allow 

State  not  creating  a  new,  artificial  person,  them  therein  to  set  off  a  debt  contracted 

with  capacity  to  contract,  but  merely  giv-  by  the  plaintiff,   as  the  plaintiff  believed, 

ing  an  accumulative   remedy  against  the  to  the  other  partner  alone,  but  in  which 

owner  himself.     Thompson    i:   Steamboat  both  partners  are  in  truth  equally  inter- 

J.  D.  Morton,  2  Ohio  St.  26.      See  Milter  ested.  But  this  case  may  now  be  considered 

V.  Andres,  13  Ga.  366.     [See  /^os/!,  §  231.]  as   overruled,  and  the    rule  to    be,  that, 

{w)  Rose  I'.  Poulton,  2  B.  &  Ad.  822.  if  the  plaintiff  have  no  means  of  knowing 

{x)  Bosanquet  v.  Wray,  6  Taunt.  598.  the  e.xistence  of  the  partnership,  the  part- 
One  member  of  a  firm  may  sue  another  ner  sued  cannot  plead  in  abatement  the 
firm  of  which  his  copartners  were  members,  non-joinder  of  a  dormant  partner.  De 
on  a  covenant  executed  to  him  by  that  Mautort  v.  Saunders,  1  B.  &  Ad.  398  ;  Ex 
firm.     MuUany  v.  Keenan,  10  la.  224.  parte  Hodgkinson,  19  Ves.  294  ;  Ex  parte 

{y)  It  was  held  in  one  case,  Dubois  v.  Norfolk,  19  Ves.  458  ;  Ex  parte  Watson, 

Ludert,  5  Taunt.  609,  that  if  a  plaintiff  19  Ves.  462  ;    Ex  parte  Matthews,  3  Yes. 

1  The  principle  is  well  established  that  no  action  at  law  will  lie  between  firms 
having  a  common  member,  for  the  reasons  given  in  the  text.  Hall  v.  Kimball,  77  111. 
161  ;  Crosby  v.  Timolat,  (Minn.)  52  X.  W.  526  ;  Beacannon  v.  Liebe,  11  Ore.  443,  5 
Pac.  273.  But  a  bill  in  e(puty  will  lie  in  such  a  ca.se.  Crosby  j;.  Timolat,  (Minn.) 
52  N.  \V.  526. 

Where  a  specific  debt,  not  part  of  a  general  account,  is  due  from  one  firm  to  the 
other,  it  may  be  assigned,  and  in  a  jurisdiction  where  the  assignee  of  a  chose  in  action 
may  sue  in  his  own  name,  the  assignee  may  sue  the  debtor  firm.  Beacannon  v.  Liebe, 
11  Ore.  443,  5  Pac.  273.  The  same  is  true  at  common  law  in  case  of  the  indorsement 
of  mercantile  paper. 


272 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIII. 


reason  for  this.  Why  should  the  creditor  lose  a  remedy,  and  the 
firm  acquire  a  protection,  merely  by  the  firm's  keeping  secret  the 
name  of  one  of  them  ?  or  why  should  the  creditor  be  bound  to 
place  on  record  a  name  which  he  does  not  know,  and  is  hindered 
from  knowing  by  his  debtors  ?  The  rule  seems  to  go  further,  how- 
ever. If  the  creditor  knows  the  name  of  a  secret  partner,  it  would 
seem  that  he  is  under  no  obligation  to  make  him  defendant,  (z) 
And  there  is  some  reason  for  this ;  partly  in  the  advantage  of  a 
uniform  rule,  and  much  more  in  the  principle  that  the  firm  should 
be  estopped  from  requiring  that  another  should  make  public  what 
they  themselves  choose  and  endeavor  to  keep  private. 

But  the  rule  is  sometimes  said  to  go  still  further,  even  to  the 
converse  proposition,  that  the  firm,  in  their  own  action,  need  not 
name  a  dormant  or  secret  partner;  and, therefore,  the  want  of  his 
name  cannot  be  taken  advantage  of,  by  abatement  or  otherwise. 
The  reasons  which  apply  to  the  other  side  of  this  rule  have  no 
application  whatever  to  this.  But,  as  a  mere  matter  of  convenience, 
there  is  perhaps  no  objection  to  this  proposition,  although  we  are 
not  certain  that  the  authorities,  when  well  considered,  sustain  this 
rule  where  the  firm  is  plaintiff,  (a)     But  to  go  further :  If  a  firm 


&  B.  126  ;  Baldney  v.  Ritchie,  1  Staik. 
338  ;  Doo  v.  Chippenden,  cited  in  Abbott 
on  Shipping  ;  Sylvester  v.  Smitli,  9  Mass. 
119  ;  [Tynberg  v.  Cohen,  67  Tex.  220,  2 
S.  W.  734.]  See  Cookingham  v.  Lasher, 
2  Keyes,  454,  and  Bird  v.  McCoy,  22 
Iowa,  549. 

(z)  If  he  was  unaware  of  the  dormant 
partner,  at  the  time  of  making  the  con- 
tract sued  upon,  he  may  or  may  not,  at  his 
election,  join  the  dormant  partner.  Ex 
parte  Hamper,  17  Ves.  412  ;  Ex  parte 
Liddle,  2  Rose,  36  ;  Grellier  v.  Neale,  1 
Peake,  146  ;  Robinson  v.  Wilkinson,  3 
Price,  538  ;  Ex  parte  Layton,  6  Ves.  438  ; 
Hoare  v.  Dawes,  1  Doug.  371  ;  Wilson  v. 
Wallace,  8  S.  &  R.  55  ;  Page  i-.  Brant,  18 
111.  37  ;  Cleveland  y.  Wood  word,  15  Vt. 
302  ;  Blin  v.  Pierce,  20  Vt.  25  ;  Hagar  v. 
Stone,  20  Vt.  106.  But  if  the  plaintiff 
sue  only  the  ostensible  members  of  a  firm, 
and  the  non-joinder  of  the  rest  is  objected 
to,  it  will  be  for  the  jury  to  say  whether, 
at  the  time  the  plaintiff  contracted, 
he  knew  or  had  the  means  of  know- 
ing that  others  were  jointly  interested 
with  the  defendants  ;  or,  in  other  words, 
to  decide  with  whom  the  contract  was 
intended  to  be  made.      Stanstield  v.  Levy, 


3  Stark.  8  ;  Mnllett  v.  Hook,  1  Moody  & 
M.  88  ;  Be  Mautort  v.  Saunders,  1  B.  & 
Ad.  398  ;  Ex  parte  Layton,  6  Ves.  438  ; 
Davies  v.  Hawkins,  3  M.  &  S.  488,  492  ; 
Boiitield  V.  Smith,  12  M.  &  W.  405.  See 
Robinson  v.  Wilkinson,  3  Price,  538. 
Where,  by  direction  of  the  plaintiff,  the 
writ  was  served  on  one  only  of  two  part- 
ners in  trade,  when  the  declaration  showed 
that  the  plaintiff  knew  the  names  of  both, 
and  a  verdict  was  obtained  upon  a  plea  of 
non-assumpsit,  pleaded  by  the  partner  on 
whom  the  writ  was  served,  it  was  held 
that  the  judgment  should  be  arrested. 
Shields  v.  Oney,  5  Munf.  550. 

(a)  Skinner  ;;.  Stocks,  4  B.  &  Aid.  437. 
See  Ross  v.  Decy,  2  Esji.  469,  note ; 
George  v.  Claggett,  7  T.  K.  361,  note; 
Rodwell  V.  Redge,  1  C  &  P.  220;  Gordon 
V.  Ellis,  2  C.  B.  821  ;  Cothay  v.  Fennell, 
10  B.  &  C.  671  ;  Alexander  v.  Barker,  2  Cr. 
&  J.  133  ;  Robson  v.  Dniramond,  2  B.  & 
Ad.  303. 

It  appears,  from  the  cases  just  above 
cited,  to  be  the  doctrine  of  the  English 
cases  that  the  dormant  partner  may  be 
coplaintiff  with  the  ostensible  partner  in  a 
suit  upon  a  contract  made  by  the  latter 
upon  partnership  account.  As  to  the  other 


§  202.] 


OF   THE   REMEDIES    OF   PARTNERS   INTER    SE. 


273 


should  seek  to  sue  another  firm,  when  one  partner  in  either  is  a 
secret  partner  in  the  other,  because  he  need  not  be  named  in  that 
one,  or  even  if  he  is  secret  in  both,  and  therefore  need  not  be 
named  in  eitlier,  we  should  have  much  doubt  whether  such  a  suit 
could  be  maintained  against  the  substantial  reasons  which  oppose 
it,  until  it  were  otherwise  determined  by  adjudication. 

And  if  it  be  said  that,  if  the  partner  common  to  both  be  only 
nominal  (6)  in  one,  or  both,  having  no  real  interest  whatever, 
sucii  a  suit  may  be  maintained,  we  should  have  some  doubt  if  he 
were  nominal  in  both,  and  more,  if  he  were  nominal  in  one  and 
actual  in  the  other ;  because  a  merely  nominal  partner  is  a  perfectly 
real  partner  as  to  those  parties.  It  seems  to  be  agreed  that,  if  the 
action  is  brought  on  a  written  contract,  in  which  all  tlie  names  are 
used,  the  want  of  interest  in  one  does  not  sustain  an  action  without 
him,  or  an  action  which  makes  him  both  plaintiff  and  defend- 
ant, (c)     And  we  should  be  inclined  to  think  the  relation  of  part- 


question,  whether  in  such  a  case  the 
secret  partner  must  join  or  wliether  the 
ostensible  partner  may  sue  alone,  we  have 
already  indicated  the  principles  by  which, 
we  think,  it  should  be  answered.  The 
English  cases  seem  rather  to  favor  the 
doctrine  that  the  ostensible  partner  may, 
if  he  chooses,  sue  without  joining  the 
secret  members  of  the  firm.  He  is  regarded 
as  an  agent,  contracting,  in  his  own  name, 


Barstow  v.  Gray,  3  Me.  409  ;  Ward  v. 
Leviston,  7  Blackf.  466  ;  Monroe  y.  Ezzell, 
11  Ala.  603  ;  Bank  of  St.  Mary's  v.  St. 
John,  25  Ala.  566,  621-624;  Gregory  v. 
Bailey,  4  Harr.  (Del.)  256;  Speake  v. 
Prewitt,  6  Tex.  252  ;  Jackson  v.  Alex- 
ander, 8  Tex.  109  ;  Keane  v.  Fisher,  9  La. 
Ann.  70,  74.  But  when  the  ostensible 
and  secret  partners  all  sue,  on  a  partner- 
ship contract,   the  defendant  may   make 


for  an    undisclosed   principal,    in    which     the  same  defences,   whether  by  offset   or 


case  either  the  agent  or  the  principal  may 
sue  upon  the  contract.  Sims  v.  Bond,  5 
B.  &  Ad.  389.  See  Mawman  v.  Gillett,  2 
Taunt.  327  ;  Lloyd  v.  Archbowle,  2 
Taunt.  324  ;  Lereck  v.  Shaftoe,  2  Esp. 
468;  Brassington  v.  Ault,  2  Bing.  177  ; 
Steel  V.  Western,  7  J.  B.  Moore,  31. 

In  the  United  States  the  rule  of  the 
English  coui-ts  has  been  followed,  and 
it  has  been  generally  held,  that  the  osten- 
sible partner  is  the  only  necessary  part)' 
plaintiff  to  a  suit  to  enforce  a  partnership 
contract,  though  the  dormant  partner  may 
be  joined.  Mitchell  v.  Dall,  2  H.  &  G. 
159,  171  ;  Clarkson  v.  Carter,  3  Cow.  84  ; 
Hawley  r.  Cramer,  4  Cow.  717;  Clark  v. 
Miller,  4  Wend.  628  ;  Boardman  i'.  Keeler, 
2  Vt.  65  ;  Lapham  v.  Green,  9  Vt.  407  ; 
Morton  v.  Webb,  7  Vt.  123  ;  Curtis  v. 
Belknap,  21  Vt.  433  ;  Lord  v.  Baldwin,  6 
Pick.  352  ;  Wood  v.  O'Kelley,  8  Cush. 
406  ;    Wilson  v.  Wallace,  8   S.  &  R.  55  ; 


otherwise,  as  if  the  action  had  been 
brought  in  the  name  of  the  acting  partner 
with  whom  the  contract  was  actually  made. 
Hilliker  v.  Loop,  5  Vt.  116  ;  Lapham  v. 
Green,  9  Vt.  407  ;  Lord  v.  Baldwin,  6 
Pick.  352  ;  Ward  v.  Leviston,  7  Blackf. 
466  ;  Rose  v.  Murckie,  2  Call,  409  ;  Beach 
V.  Hayward,  10  Ohio,  455.  The  right  of 
set-off  in  such  cases  is  provided  for  by 
statute  in  Massachusetts,  Pub.  Stat.  ch. 
168,  §  9.  In  New  York,  since  the  code, 
which  provides  (§  111)  that  "every  action 
must  be  prosecuted  in  the  name  of  the 
real  party  in  interest,"  a  dormant  partner 
is  a  necessary  party  as  a  plaintiff  in  an 
action  for  the  recovery  of  a  partnership 
debt,  founded  on  a  partnership  contract, 
whether  the  relief  sought  be  legal  or 
equitable,     Secor  v.  Keller,  4  Duer,  416. 

(6)  Ante,  §  96. 

(c)  Guidon  v.  Robson,  2  Camp.  302. 


18 


274  THE   LAW   OF   PARTNERSHIP.  [CH.    VIII. 

nership,  and  the  law  springing  out  of  this  relation,  should  have 
much  the  same  effect  as  a  written  contract. 

§  203.  Demand  of  Firm  grounded  on  the  Tort  of  a  Member.  — 
This  question  has  arisen  where  a  hrm  has  a  right  of  action,  and 
the  cause  of  action  is,  in  the  whole  or  in  part,  the  fraud  of  one  of 
the  partners.  If  A.  fraudulently  transfers  his  own  pi-opcrty,  he 
cannot,  generally  speaking,  bring  any  action  to  recover  this  property, 
because  he  cannot  avoid  his  own  act,  nor  found  his  right  upon  his 
wrong-doing.  But  if  A.,  of  the  firm  of  A.,  B.,  &  Co.,  fraudulently 
transfers  the  negotiable  paper  of  A.,  B.,  &  Co.,  in  payment  of  his 
own  debt,  under  circumstances  which  would  make  the  transfer 
null  as  to  the  partnership,  it  has  been  objected  to  the  action  of  A., 
B.,  &  Co.  for  the  paper,  that  A,  cannot  be  a  plaintiff  in  such  an 
action  and  that  B.  &  Co.  cannot  sue  without  A.  (d) 

But  such  an  objection  is  wholly  technical,  nor  do  we  think  that 
even  on  technical  ground  it  is  unanswerable.  The  law  is  familiar 
with  instances  of  a  party's  name  being  used  by  others,  for  their 
exclusive  benefit,  and  against  his  will.  An  assignee  for  value  of  a 
chose  in  action  so  sues  in  the  name  of  the  assignor  ;  and,  after 
notice  given  of  the  assignment,  the  debtor  is  bound  only  to  the 
assignee,  and  the  assignor,  who  is  nominal  plaintiff,  can  neither 
withdraw  nor  defeat  the  action,  nor  release  the  judgment;  having, 
in  fact,  no  more  power  over  the  action,  and  no  more  to  do  with  it, 
than  if  his  name  were  not  used,  (e)  If  there  be  some  objection  to 
the  application  of  a  similar  rule  to  the  case  under  consideration, 
there  may  be  less  to  permitting  B.  &  Co.  to  sue,  on  the  ground 
that  the  fraud  of  A.  removes  him  from  all  interest  and  from  the 
case.  Nor  are  cases  wanting  which,  at  least,  incline  to  this  view.  (/) 

(d)  Jnnes  V.  Yates,  9  B.  &  C.  532.  v.  Mclntyre,  31  Ala.  532.  See  opinion  of 
Sykes  &  Bury  being  in  partnership,  Sykes  Parker,  C.  J.,  in  Greeley  v.  Wyeth,  ION. 
gave  the  moneys  and  bills  of  the  partner-  H.  18,  and  of  Bigelow,  J.,  in  Homer  v. 
ship  in  payment  of  his  separate  debt,  and  Wood,  11  Cash.  68.  Craig  v,  Hulschezer, 
in  fraud  of  his  copartners,  the  party  34  N.  J.  363.  [Where  one  partner  wrong- 
receiving  the  property  being  privy  to  the  fully  delivered  partnership  property  to  his 
fraud.  Sykes  &  Bury  having  becoirie  individual  creditor,  the  other  partner 
bankrupt  their  assignees  brought  trover  for  could  not  replevy  the  property,  but  must 
the  bills,  anil  assumjjsit  for  the  money,  go  into  equity.  Hoff  v.  Rogers,  67  Miss. 
The  court  of  King's  Bench  held,  that  the  208,  7  So.  358.] 

])laintitfs  could  not  recover.     The  doctrine  In  Pennsylvania,  where  equitable  rem- 

of  .[ones  V.  Yates  was  approved  in  Greeley  edies  are  administered  through  the  medium 

V.  Wyeth,  16  N.  H.  10.      See  Wallace  v.  of  common-law  forms,  the  English  rule,  as 

Kelsall,  7  M.  &  W.  264,  273  ;    Gordon  v.  laid  down  in    Jones  v.   Yates,    lias  been 

Ellis,  7   M.  &  G.  607,   622  ;  Brewster   r.  distinctly  denied  any  operation.    Purdy  v. 

Mott,  5    111.  378  ;    Daniel  v.  Daniel,  9   B.  Powers,  6  Barr,  492. 
Mon.  195  ;  Buck  v.  Mosley,  24  Miss.  170  ;  (c)   1  Pars,  on  Cont.  (5th  ed.)  230. 

Goode  V.  McCartney,  10  Tex.  193  ;   Nail  (/)  There  are  dicta  to  the  effect,  that 


§  203.]  OF   THE    REMEDIES    OF    PARTNERS    INTER    SE.  275 

Even  if  it  should  be  held  that  a  partner  cannot  release  or  assign 
to  his  copartner  his  share  of  a  partnership  debt,  so  as  to  authorize 
a  suit  by  the  partner  alone,  —  a  proposition  which  we  do  not  think 
would  now  be  universally  held,  although  an  unavoidable  inference 
from  the  strict  and  technical  rules  of  the  common  law, —  it  does 
not  necessarily  follow  that  the  same  rule  w^ould  be  applied  where 
a  partner  destroys  or  loses  his  right  by  his  fraud.  The  true 
objection  is,  so  far  as  there  is  any  one  of  substance,  that  if  the 
fii-m  or  the  other  partners  alone  recovered,  it  would  be  recovered 
as  the  property  of  the  firm,  and  the  fraudulent  party  would  have 
his  share.  It  must  be  admitted  that  this  objection  has  much 
weight.  But  perhaps  it  might  be  obviated  by  reduction  or  severance 
of  damages,  by  set-off,  or  recoupment,  or  in  some  other  similar 
way,  at  law,  {g)  as  well  as  it  could  be  in  equity.  And  it  certainly 
would  be  a  great  hardship  to  deny  to  the  innocent  parties  any 
relief,  either  at  law  or  equity.  (A)  ^ 

in  such  a  case  the  injured  partners  could  dissolution  of  that  partnership,  it  was 
not  sue  without  joining  their  fraudulent  agreed  between  them  that  Evans  should 
copartner  ;  since,  the  action  being  ex  con-  receive  some  of  the  debts,  and  Morgan  the 
trcictii  and  the  contract  joint,  the  remedy  otliers.  Tliis  debt  was  to  be  paid  to  Mor- 
nuist  also  be  joint,  and  the  partners  can  gan,  and  the  defendant  had  accordingly 
have  no  joint  capacity,  except  when  all  paid  it  to  him.  They  called  ilorgan  to 
sue  together.  See  opinion  of  Lord  Ten-  prove  this  case,  and  Lord  Kenyon  held  him 
terden,  C.  J.,  in  Jones  v.  Yates,  9  B.  &  ('.  a  competent  witness,  as  the  judgment  in 
539  ;  of  Bigelow,  J.,  in  Homer  v.  Wood,  this  cause  would  not  conclude  his  right. 
11  <"ush.  6-t.  In  Longman  v.  Pole,  Moody  He  was  examined,  and  on  his  evidence  the 
&  JL  223,  Lord  Tenterden,  C.  J.,  in  sum-  defendant  obtained  a  verdict.  Evans  v. 
ming  up,  said  :  "  I  think,  in  point  of  Silverlock,  1  Peake,  21. 
law,  this' action  is  maintainable  ;  if  a  per-  (g)  Daniel  v.  Daniel,  9  B.  Mon.  195. 
son  colludes  with  one  partner  in  a  firm  to  (h)  "  The  defrauded  jjartner  may,  per- 
enable  him  to  injure  the  other  partners,  haps,  have  a  remedy  in  equity,  by  a  suit 
I  think  they  can  maintain  a  joint  action  in  his  own  name  against  his  partner  and 
against  the  person  so  colluding."  Perhaps,  the  person  with  whom  the  fraud  was  com- 
however,  this  case  is  distinguishable,  on  mitted."  Per  Lord  Tenterden,  C.  J.,  in 
the  ground  that  the  action  was  aise  for  a  Jones  r.  Yates,  9  B.  &  C.  539.  "  If  a 
tort.  The  following  case  is  somewhat  more  partner,  fraudulently  or  improperly,  with- 
in point.  Assumpsit  for  goods  sold  and  out  the  consent  of  his  partners,  applies 
delivered.  The  defendant's  counsel  stated  the  partnership  funds  to  his  own  private 
that  the  plaintiff  and  one  Morgan  were  in  purposes,  or  for  his  own  private  profit  or 
partnership    together;    and    that,    on    a  emolument,  or  invests  the  same  improperly 

1  In  a  case  of  this  sort  the  firm  is  the  party  wronged,  not  the  innocent 
partners.  They  sue  only  as  representing  the  firm,  and  should,  it  would  seem, 
recover  what  the  firm  is  entitled  to,  —  namely,  the  whole  amount  of  the  firm  property 
wrongfully  taken.  If  the  defendant  has  any  rights  in  the  matter,  they  are  rights 
against  the  wrongdoing  partner,  not  against  the  firm  ;  and  should  be  enforced 
against  him  individually.  By  his  act  in  this  case  he  cannot  charge  the  firm  prop- 
erty even  with  a  lien.  If  the  defendant  has  any  right  against  the  firm,  it  is  to 
secure  compensation  for  his  loss  out  of  the  wrongdoing  partner's  distributive  share 
of  the  assets,  if  any. 


276 


THE   LAW   OF   PARTNERSHIP. 


[CH.    VIII. 


If  a  partner  bring  a  bill  in  equity  against  tbe  other  partners, 
for  a  settlement  of  the  affairs  of  the  firm,  the  fraudulent  char- 
acter of  the  purpose  for  which  the  firm  was  formed  is  no  de- 
fence, {hh) 

§  204.  Equity  the  Principal  Tribunal  for  Partnership  Questions.  — 
As  equity  is  undoubtedly  the  principal  tribunal  for  the  abjudica- 
tion of  questions  arising  under  the  law  of  partnership,  it  is  perhaps 
always  able  to  give  relief  or  remedy  in  cases  which  justly  called 
for  it,  and  cannot  obtain  it  at  law.  (^)  The  most  frequent  instances 
of  actual  resort  to  equity  are  for  a  dissolution,  or  for  a  sale  in  the 
course  of  settlement  by  law ;  for  an  account,  either  general  or 
particular,  under  some  specific  agreement ;  for  contribution  ;  (j*') 
for  the  enforcement  of  rights,  given  either  by  law  or  by  agreement 
of  the  partners  ;  for  a  remedy  for  wrong  done  by  a  partner,  or 
prevention  of  it  by  injunction  against  him;  for  an  injunction 
against  third  parties,  to  prevent  them  aiding  a  partner  in  doing  a 
wrong  to  the  partnership;  —  sometimes  for  specific  performance 
of  agreement  to  enter  into  partnership ;  —  in  general,  for  all  frauds 
or  mistakes  of  fact ;  (/c)  —  and  in  some  cases  for  a  manager  or 
receiver  of  the  business  or  the  property  of  the  partnership.    Some 


in  his  own  name  and  for  his  own  use,  the 
other  partners  have  a  right,  if  they  can 
distinctly  trace  the  investment,  and  elect 
so  to  do,  to  follow  the  partnership  funds 
into  the  new  investment,  and  treat  it  as 
trust  property  held  by  that  partner  for 
the  benefit  of  the  firm,  and  as  liable  to  be 
accounted  for  by  any  jierson  into  whose 
possession  the  same  may  come,  who  is  not 
a  bo7m  fide  purchaser  for  a  valuable  con- 
sideration, without  notice."  Per  Story, 
J.,  in  Kelley  v.  Greenleaf,  3  Storj',  101. 
See  Halstead  v.  Sbepard,  23  Ala.  .^58  ; 
Purdy  V.  Powers,  6  Barr,  494. 

(hh)  Harvey  v.  Varney,  98  Mass.  118. 

(i)  See  Hamilton  v.  Cummings,  1 
Johns.  Ch.  517. 

(j)  "Wright  V.  Hunter,  5  Ves.  792  ; 
Abbot  V.  Smith,  2  W.  Bl.  947,  949. 
Hence,  in  a  case  where  five  persons,  in 
partnership  as  coach  proprietors,  had  in- 
curred a  partnersliip  debt,  which  the  cred- 
itor, after  the  death  of  one  of  the  part- 
ners, recovered  in  an  action  against  the 
survivors,  on  a  bill  filed  for  that  purpose 
against  the  representatives  of  the  deceased 
partner,  by  the  partner  who  had  ])aid  the 
damages  and  costs  of  the  action,  Sir  John 
Leach  decreed  contribution,  not  only  for 


the  damages,  but  also  for  the  costs. 
Thomas  v.  Lichfield,  Kolls,  H.  T.  1831, 
cited  in  Collyer  on  Part.  ( Perkins'  ed. ) 
§  287.  See  Browne  v.  Gibbins,  5  Bro. 
P.  C.  491,  3  Bro.  P.  C.  127  (Dublin  ed. )  ; 
Sells  V.  Hubbell,  2  Johns.  Ch.  397  ; 
Jones  V.  Morgan,  16  Jur.  238. 

(k)  Throughout  the  whole  of  this 
section,  we  shall  constantly  meet  with 
illustiations  of  the  interference  of  ecjuity, 
wherever  fraud  taints  the  intercourse  of 
persons  who  became  partners  fairly,  and  on 
a  basis  of  mutual  good  faith.  Here  we  shall 
only  remark  that  if,  in  the  original  agree- 
ment of  association,  there  has  been  fraud, 
imposition,  misrepresentation,  or  oppres- 
ion,  equity  may  declare  the  partnership 
void  ah  initio.  Howell  v.  Harvey,  5  Ark. 
270,  278  ;  Tattersall  v.  Groote,  2  B.  &  P. 
135,  per  Lord  Eldon  ;  Hynes  v.  Stewart, 
10  B.  Mon.  429  ;  Fogg  v.  Johnston,  27 
Ala.  432.  And  the  injured  party  may  file 
a  bill  for  the  return  of  any  premium  he 
may  have  paid  for  the  sake  of  becoming  a 
partner.  Per  Lord  Eldon,  in  Tattersall  v. 
Groote,  supra  ;  Pillans  v.  Harkness,  Colles 
P.  C.  442  ;  Hamill  v.  Stokes,  Daniell,  20, 
4  Price,  161.  See  Evans  v.  Bicknell,  6 
Ves.    174,   182  ;   Akhurst   v.    Jackson,    1 


§  204.]  OF   THE   REMEDIES   OF   PARTNERS   INTER   SE.  277 

of  these  topics  we  shall  consider  separately.  Here  we  would 
remark  that  the  legal  maxim,  "  de  minimis  non  curat  lex^''  is 
applied  with  a  wide  meaning  in  equity.  It  is  a  general  rule,  that 
good  reasons  must  be  given,  and  facts  proved  making  out  a  strong 
case  of  considerable  damage,  before  equity  will  interfere.  {V) 

The  principal  exception  to  this  rule  is  in  cases  of  fraud.  Where 
that  is  clearly  proved,  a  court  of  equity  is  usually  prompt  in  sup- 
pressing or  punishing  the  fraud,  although  the  amount  of  injury 
resulting  from  it  may  not  be  large,  (m)  Perhaps  it  may  be  useful 
to  advert  to  the  question,  whether  money  which  a  partner  seeks  to 
recover  will  be  taken  from  or  paid  to  the  funds  of  the  partner- 
ship; for  this  is  very  generally  a  test  question,  which  may  determine 
whether  the  proper  remedy  is  at  law  or  equity.  Thus,  we  mentioned 
covenant  or  assumpsit  as  maintainable  on  an  agreement  to  pay 
money  before  a  partnership,  and  to  establish  or  launch  a  partner- 
ship ;  but  neither  of  these  actions  will  be  sustained,  if  the  money 
when  paid  is  to  be  paid  out  of  the  funds  of  the  partnership,  or  if 
recovered  is  to  be  added  or  credited  to  those  funds,  (w) 

It  was  said  in  the  preceding  section  that  actions  at  law  will  lie 
between  partners,  in  general,  on  any  contract,  transaction,  or 
indebtedness  which  is  taken  out  of  and  separated  from  the  part- 
nership accounts,  before,  during,  or  after  the  partnership.  Now, 
we  have  in  the  question,  whether  the  money  is  either  to  come 
from  or  be  paid  to  the  partnership,  or  is  to  remain  the  benefit  or 
loss  of  the  partner  only,  and  never  to  appear  in  the  accounts  of 
the  partnership,  perhaps  the  best  way  of  determining  whether  the 
cause  of  action  is  so  separated  from  the  partnership  as  to  be 
sufficient  for  a  suit  at  law. 

Swanst.  89  ;  Colt  v.  Woollaston,  2  P.  Wms.  which  he  procured  the  funds  contributed 

154  ;  Green  v.  Barrett,  1  Sim.  45  ;    Blain  as  his  share  of  the  capital  of  the  firm,  is 

V.   Agar,  1  Sim.  37.     Or  for  an  account  no  ground  for  annulling  or  rescinding  the 

and  a  receiver.     Ex  parte  Broome,  1  Rose,  contract    of    partnership.      Ingraham    v. 

69,  71.     See,  however,  Clifford  v.  Brooke,  Foster,  31  Ala.  123.     See  Stein  v.  Rohert- 

13  Ves.  131,  and  the  comments  upon  the  son,  30  Ala.  286. 
last  two  cases  in  2  Hov.  Supp.  327.     And  (1)  See  post,  ch.  14. 

he  will  be  re.stored,  as  far  as  possible,  to  (m)  The  maxim,  de  minimis  non  curat 

his  original  situation.     Hynes  y.  Stewart,  fea;,  "  is  never  applied  to  the  positive  and 

10   B.   Mon.   429;   Fogg?'.  Johnston,  27  wrongful  invasion  of  another's  property." 

Ala.  432.  See  Oldaker  v.  Lavender,  6  Sim.  Per  Cowen,  J.,  in  5  Hill,  175. 
239.     But   upon   a   bill    by   one   partner  (n)  Bedford  v.  Brutton,  1  Scott,  245, 

against  his  copartners,  for  an  account  and  261,  262,  1  Bing.  N.  C.  407  ;  Pearson  v. 

liis  share  of  the  profits,  a  fraud  perpetrated  Skelton,  1  M.  &  W.  504.     See  Andrews  v. 

by  the  plaintiff  upon  one  of  his  copart-  Ellison,  6  J.  B.  Moore,  199  ;  Caldicott  v. 

ners,  in  a   transaction  prior  to  and   in-  Griffiths,  8  Exch.  898,  9  04  per  Maule,  J. 
dependent  of  the  partnership,  by  means  of 


278  THE   LAW    OF    PARTNERSHIP.     '  [CH.    VIII. 


SECTION  IV. 

ON   THE    METHODS    AND    PROCESSES   OF    EQUITY   APPLICABLE    IN   CASES 

OF    PARTNERSHIP, 

§  205.  Decree  for  Specific  Performance.  —  A  decree  for  specific 
performance  is  one  of  the  important  and  most  frequent  means 
of  relief  and  remedy  in  equity.  We  have  already  spoken  of  it  in 
reference  to  a  pi-ayer  for  this  relief  against  one  who  refuses  to  carry 
into  effect  an  agreement  for  a  partnership.  In  general,  it  will  be 
applied  by  equity,  as  between  partners,  whenever  the  performance 
of  a  certain  duty,  or  of  a  distinct  promise,  is  prayed  for,  which 
duty  or  promise  the  court  can  enforce  or  cause  to  be  executed  effi- 
ciently and  adequately,  while  there  is  no  adequate  remedy  at  law 
for  a  breach  of  it.  (o) 

But,  as  has  been  already  intimated,  there  must  always  be  duties, 
as  of  general  good  conduct,  of  skill  or  care,  or  the  like,  which  it  is 
impossible  for  the  court  to  regulate  or  enforce  by  a  decree  ;  and 
nothing  is  done  in  such  cases  unless  a  positive  mischief  is  threat- 
ened, which  may  be  prevented  or  remedied  by  injunction  or  other 
means.  Q)}     Equity  will  grant  this  remedy  only  where  the  part- 

(o)  Thus,  equity  has  enforced  an  agree-  (/?)  It  was  held,  in  quite  a  number  of 

ment,  made  upon  the  dissolution  of  a  part-  cases  in  England,  that  equity  would  not 

nership,  that  a  particular  book  used  in  the  prohibit  tlie  violation  of  a  negative  term 

trade  should  become  the  exclusive  property  in  an  agreement,  unless  it  had  the  power 

of  one  of  the  partners,  and  that  a  copy  of  of  enforcing  tlie  positive  part  of  the  same 

it  should  be  delivered  to  the  other.  Lingen  agreement,    upon    the  principle   that  the 

V.  Simpson,  1  Sim.  &  S.  600.     So  if  one  court  should  not  interfere  at  all,  nnless  it 

partner   receives    moneys,    but   does    not  could   administer   full   and   entire   relief, 

enter  the  receipts  in  the  partnership  books,  Kemble  v.  Kean,  6  Sim.  383  ;  Kimberly  i». 

relief  will  be  granted  in  equity.    Goodman  Jennings,  6  Sim.  340  ;    Baldwin  v.  Useful 

V.  Whitcomb,  1  Jac.  &  W.  593.    So,  if  the  Knowledge   Society,  9  Sim.  393  ;  Gervais 

continuing  and  incoming  partner  agree  to  v.  Edwards,  2  Drury  &  W.  80.     The  same 

give  the  retiring  partner  their  joint  and  doctiine  was  asserted  in  the  American  case 

several  bond  to  indemnify  him  against  the  of  Hamblin  v.  Dinneford,  2  Edw.  Ch.  529. 

debts  of  the  first  partnership,  it  seems  that  But  the  later  English  cases  have  adopted 

this   agreement    may   be   specifically   en-  a  different  principle.     Rolfe  v.  Rolfe,   15 

forced.   Warren  v.  Taylor,  8  Sim.  599.  An  Sim.    88  ;     Dietrichsen     v.    Cabburn,    2 

injunction  against  the  breach  of  a   part-  Phillips,  52  ;  Lumley  v.  Wagner,  5  De  G. 

7iership  covenaiit  is  often  equivalent  to  a  &  S.  485.     It  is  now  held  that  where  a 

decree  for  specific  perfoi'mance  ;  as  where  contract  contains  covenants  to  do  certain 

the  active  members  of  a  firm  aie  enjoined  acts,  and  also  to  ab.stain  from  doing  certain 

from   u.sing,    in    the  joint   business,  any  acts,  a  court  of  equity  has  jurisdiction  to 

other  than  the  name  agreed  upon  in  the  restrain  the  breach  of  a  negative,  though 

articles   as  the  style  of  the    partnership,  it  may  have  no  power  to  compel  specific 

See  post  §  214.  performance  of  the  affirmative  covenants  ; 


§  205.] 


OF   THE    REMEDIES    OF    PARTNERS    INTER    SE. 


279 


iiership  is  for  a  definite  period,  or  such  decree  is  necessary  to 
invest  one  of  the  partners  with  legal  rights  which  he  could  not 
otherwise  possess,  (p/?) 

Thus,  if  a  partner  covenants  to  give  his  whole  business  time  and 
attention  to  the  C(jnccrns  of  tlie  partnership,  no  specific  perform- 
ance would  be  decreed  on  a  prayer  setting  forth  that  he  was 
generally  negligent  and  inattentive.  But  such  a  covenant  would 
be  construed  as  an  enforcement  of  the  rule  of  law,  that  a  part- 
ner must  not  engage  in  other  business  which  interferes  with  his 
duties  to  the  firm  or  otherwise  injures  it ;  and  the  court  would 
restrain  a  partner,  under  such  covenant,  from  engaging  in  any 
independent  business,  (^y)  And  if  the  plaintiff,  in  his  bill  for  spe- 
cific performance  or  in  iiis  separate  bill,  prays  that  an  account  of 
the  profits  of  this  forbidden  business  may  be  taken,  and  a  share 
paid  to  them,  as  if  it  were  done  on  their  joint  account,  equity  — 
supposing  the  justice  of  the  case  ui)on  all  its  facts  so  to  require  — 
would  grant  this  relief,  (r)  ^ 


as  in  the  case  of  an  agreement  by  a  musician 
to  sing  at  a  particular  theatre,  and  not  to 
sing  at  any  other,  in  which  case  an  in- 
junction may  be  granted  against  the  breacli 
of  the  latter  portion  of  the  agreement 
But  it  seems  that  in  such  cases  the  court 
will  not  interfere,  if  it  is  apparent  that 
its  jurisdiction  cannot  be  beneticially  exer- 
cised. Ibid.  In  Lumley  v.  Wagner,  supra, 
all  the  authorities  are  reviewed,  and  the 
principles  governing  the  question  elab- 
orately discussed.  See  Johnson  v.  Shrews- 
bury,'&c.  R.  Co.,  3  De  G.,  M.  &  G.  927. 

The  doctrine,  that  where  a  contract 
has  both  a  positive  and  a  negative  term, 
and  the  jiositive  term  is  of  such  a  nature 
that  performance  cannot  be  compelled  by 
ei[uity,  it  will  not  interfere  to  prevent  the 
violation  of  the  negative  term,  seems 
never  to  have  been  applied  to  articles  of 
partnership,  though  "  it  does  not  appear 
why  cases  of  actual  partnership  should  be 
more  favored,  in  the  exercise  of  the  juris- 
diction by  injunction,  than  others."  Per 
Lord  Cottenliam,  in  Dietrichsen  v.  Cab- 
burn,  'Z  Phillips,  59.     Thus  in  Kenible  v. 


Kean,  supra,  Sir  L.  Shadwell,  V.  C, 
SMid  :  "In  the  case  where  the  parties  are 
j)artners,  and  one  of  the  partners  contracts 
that  he  shall  exert  himself  for  the  benefit 
of  the  partnership,  though  the  court,  it  is 
true,  cannot  compel  a  specific  performance 
of  that  part  of  the  agreement,  yet,  there 
being  a  partnership  subsisting,  the  court 
will  restrain  that  party  (if  he  has  coven- 
anted that  he  will  not  carry  on  the  same 
trade  with  other  persons)  from  breaking 
that  part  of  the  agreement.  That  is,  in 
case  of  a  partnership."  See  Morris?;.  Col- 
man,  18  Ves.  4-37. 

{pp)  Whitworth  v.  Harris,  40  Miss. 
483 ;  Freeman  v.  Smith,  2  Wall.  160  ; 
Buxton  V.  Lister,  3  Atk.  383  ;  Anony- 
mous, 2  Ves.  629.  630  ;  Birchett  v.  Boi- 
ling, 5  Munf.  442  ;  Hibbert  r.  Hibbert, 
Collyer  on  Part.  §  203. 

[q)  Kemble  v.  Kean,  6  Sim.  333 ; 
Morris  v.  Colman,  18  Ves.  437  ;  supra, 
note  (p). 

(r)  Somerville  v.  Mackay,  16  Ves.  382  ; 
Moritz  V.  Peebles,  4  E.  D.  Smith,  135. 


1  A  contract  for  entering  into  a  partnership  cannot  usually  be  enforced  in  equity. 
An  agreement  calling  upon  a  party  to  engage  in  business  is  of  course  incapable  of 
enforced  sjiecific  performance.  Morris  v.  Peckham,  51  Conn.  128  ;  Buck  ii.  Smith, 
29  Mich.  166  ;  Meason  v.  Kaine,  63  Pa.  335  ;  Reed  v.  Vidal,  5  Rich.  Eq,  289.  Such 
terms  of  the  articles  as  are  capable  of  specific  performance  will  be  enforced  by  a  court 


280 


THE   LAW   OF   PARTNERSHIP. 


[CH.  Yin. 


§  206.  Decree  for  Dissolution,  and  for  Account. — We  connect 
these  topics,  in  this  section,  because  a  court  of  equity  frequently 
decrees  an  account  between  partners;  ahiiost  always,  however, 
where  there  has  been  or  is  to  be  a  dissolution  of  the  partnership. 
Indeed,  courts  of  equity  have  intimated,  with  much  distinctness, 
that  they  would  not  decree  any  account,  unless  there  either  was  a 
dissolution,  or  the  bill  prayed  for  a  dissolution,  (s)  As  we  have 
said,  this  is  generally  the  case  in  point  of  fact ;  and  there  are  rea- 
sons as  well  as  high  authority  for  the  rule  ;  reasons  which,  how- 
ever, may  perhaps  be  summed  up  in  this  :  that  a  partner,  who  is 
driven  to  a  court  of  equity  as  the  only  means  by  which  he  can  get 
an  account  from  his  partner,  may  be  supposed  to  be  in  a  position 
which  will  be  benefited  by  a  dissolution ;  in  other  words,  such  a 
partnership  as  that  ought  to  be  dissolved,  (t) 

We  apprehend,  however,  that  the  question  is  one  which  is  per- 


(s)  Forman  v.  Hoinfray,  2  Ves.  &  B. 
329  ;  Waters  v.  Taylor,  15  Ves.  10  ;  Los- 
combe  V.  Russell,  4  Sim.  8  ;  Kiiebell  v. 
White,  2  Yomige  &  C.  Excli.  15.  These 
last  two  cases  have  been  sujjposed  to  over- 
rule the  doctrine  of  Sir  John  Leach  in 
Harrison  v.  Armitage,  4  Madd.  143,  and 
Richards  v.  Davies,  2  Kuss.  &  M.  347  ; 
Camblat  v.  Tupery,  2  La.  Ann.  10.  One 
partner  cannot  demand  an  acconnt  in  re- 
spect of  particular  items,  and  a  division 
of  particular  parts  of  the  property  ;  but 
the  account  must  necessarily  embi-ace 
everything.  Baird  v.  Baird,  1  Dev.  & 
B.  524  ;  McRae  v.  McKenzie,  2  Dev.  & 
B.   232. 

(t)  In  Forman  v.  Homfray,  2  Ves.  & 
B.  330,  Lord  Eldon  placed  the  reason  of 
the  rule  upon  the  ground  of  convenience, 
saying  :  "  If  a  partner  can  come  here  for 
an  account  merely,  pending  the  partner- 
ship, there  seems  to  be  nothing  to  pre- 
vent his  coming  anniially."  This  objection 
was  met  by  Sir  John  Leach,  Master  of  the 
Rolls,- in  Richards  v.  Davies,  2  Russ.  & 
M.  347,  as  follows  :  "  It  is  objected  that, 
if  such  a  suit  be  entertained,  the  defend- 
ant may  be  vexed  by  a  new  bill  whenever 
new  profits  accrue  ;    but  what   right   has 


the  defendant  to  comjilain  of  such  new  bill 
if  he  repeats  the  injustice  of  withholding 
what  is  due  to  the  plaintiff?  Would  not 
the  same  objection  lie  in  a  suit  for  tithes, 
which  accrue  de  anno  in  annum  ? "  In 
Knebell  v.  White,  2  Younge  &  C.  Exch. 
21,  Alderson,  B.,  remarking  upon  this 
point,  said :  "  Then  what  is  the  prin- 
ciple ?  It  seems  this,  that  where  there  is 
an  open  account,  in  which  the  antecedent 
items,  respecting  which  the  account  in 
equity  is  sought  to  be  taken,  are  neces- 
sarily connected  with,  and  not  capable  of 
being  severed  from,  the  other  items  of  the 
account  which  are  to  arise  in  future,  the 
court  will  not  interpose ;  for,  if  it  did,  it 
would  tolerate  the  bringing  of  a  suit 
which  could  never  come  to  an  end  till  the 
account  itself  was  closed,  for  the  state  of 
the  account  would  be  continually  chan- 
ging whilst  it  was  under  discussion  and 
settlement.  The  party  who  seeks  redress 
must  put  it  in  the  power  of  the  court  to 
close  finally,  by  its  decree,  the  disjjute 
between  the  parties.  As  soon  as  he  does 
this,  he  is  entitled  to  its  assistance.  In 
the  case  of  a  partnership,  therefore,  he 
must  pray  a  dissolution." 


of  equity.  Thus  one  partner  may  be  enjoined  from  depriving  another  of  a  share  in 
the  direction  of  the  business,  Tillar  v.  Cook,  77  Va.  477  ;  as  by  denying  him  attcess 
to  the  books,  or  other  information  about  the  business.  Katz  v,  Brewington,  71  Md.  79, 
20  Atl.  139.  And  where  it  is  necessary  in  order  to  secure  certain  propert}'  rights  to 
the  complainant,  specific  performance  to  that  extent  may  be  decreed  even  of  an  agree- 
ment to  form  a  partnership  at  will.     Somerby  v.  Buntin,  118  Mass.  279. 


§  207.] 


OF   THE   REMEDIES   OP   PARTNERS   INTER   SE. 


281 


fectly  open  to  the  discretion  of  the  court,  and  the  rule,  if  there  be 
a  rule,  goes  no  farther  than  the  reason  of  it. 

§  207.  Account  without  Dissolution. — If  a  partner  prays  for  an 
account,  and  his  case  shows  that  he  has  need  of  one,  that  it  is  his 
only  effectual  remedy,  and  that  he  cannot  get  it  without  the  aid  of 
the  court,  but  shows  also  that,  as  soon  as  an  account  is  rendered, 
no  sufficient  cause  of  dissolution  will  remain,  and  circumstances 
from  which  the  court  could  infer  that  a  continuance  of  the  part- 
nership desired  by  both  would  be  neither  injurious  nor  useless, — 
in  such  a  case,  we  know  not  why  a  decree  for  an  account  should 
not  be  rendered ;  and  we  have  no  doubt  that  it  would  be  by  most 
of  our  courts,  if  not  by  all.  (u) 

In  England,  an  account  has  been  decreed  upon  a  bill  praying 
for  the  establishment  of  the  partnership,  (i/) 

A  prayer  for  dissolution  is  often  made,  and  the  power  of  equity 
to  grant  it  for  good  cause  is   doubted  by  no  one.     This  subject, 


(h)  Perhaps  it  may  now  be  said  that 
there  is  no  general,  or,  at  least,  no  uni- 
versal, rule,  to  the  effect  that  equity  will 
not  decree  an  account  between  partners, 
unless  there  be  dissolution,  or  a  prayer 
for  it.  The  cases  before  Lord  Eldon, 
supra,  §  206,  note  (t),  in  which  he 
affirmed  the  existence  of  such  a  rule, 
may  perhaps,  be  deemed  to  have  turned, 
in  a  great  measure,  upon  their  own  par- 
ticular circumstances.  In  Harrison  v. 
Armitage,  4  Madd.  143,  and  Richards  v. 
Davies,  2  Russ.  &  M.  347,  Sir  John  Leach 
expressly  rules,  that  though  the  court 
could  not  camj  on  a  partnership,  except 
with  a  view  to  dissolution,  yet  it  might 
and  would,  if  justice  so  required  and  the 
petitioning  partner  had  no  other  remedy, 
decree  an  account  of  the  past  partnership 
transactions,  though  there  was  no  disso- 
lution, actual  or  prayed  for.  A  different 
])rinciple  governed  the  decision  of  the 
court  in  Loscombe  v.  Russell,  4  Sim.  8, 
and  was  approved  in  Knebell  v.  White, 
2  Younge  &  C.  Exch.  15,  in  both  of  which 
cases  the  opinion  attributed  to  Lord  Eldon 
was  followed,  as  being  the  sounder  and  the 
better  established.  But  the  English  cases 
strongly  incline  in  favor  of  the  opinion 
of  Sir  John  Leach,  and  this  may  now  be 
considered  as  the  received  doctrine.  In 
Wallworth  v.  Holt,  4  Mylne  &  C.  619, 
635,  639,  Lord  Chancellor  Tottenham, 
speaking  of  the   two   supposed   rules,  — 


"the  one  binding  the  court  to  withhold 
its  jurisdiction,  except  upon  bills  praying 
a  dissolution,  and  the  other  requiring  that 
all  the  partners  should  be  parties  to  a  bill 
praying  it,"  —  says  :  "  The  result  of  these 
two  rules  would  be  that  the  door  of  this 
court  would  be  shut  in  all  cases  in  which 
the  partners  or  shareholders  aie  too  num- 
erous to  be  made  parties  ;  which,  in  the 
present  state  of  the  transactions  of  man- 
kind, would  be  an  absolute  denial  of  jus- 
tice to  a  large  portion  of  the  subjects  of 
the  realm,  in  some  of  the  most  important 
of  their  affairs.  If  that  were  the  rule 
of  the  court, — if  a  bill,  in  no  case, 
would  lie  to  compel  a  man  to  observe  the 
covenants  of  a  partnership  deed,  —  it  is 
obvious  that  a  person  fraudulently  in- 
clined might,  of  his  mere  will  and  pleas- 
ure, compel  his  copartner  to  submit  to 
the  alternative  of  dissolving  a  partner- 
ship, or  ruin  him  by  a  continued  viola- 
tion of  the  partnership  contract."  See 
farther  Bentley  v.  Bates,  4  Jur.  552  ; 
Hills  V.  Nash,  10  Jur.  148  ;  Walburn  v. 
Ingilby,  2  Mylne  &  K.  61,  76. 

In  Pennsj'lvania  it  has  been  decided 
that  a  court  of  equity  will  entertain  a 
bill  for  an  account  by  one  partner  against 
the  other,  although  the  bill  does  not  con- 
template a  dissolution  of  the  partnership. 
Hudson  V.  Barrett,  1  Pars.  Sel.  Cas.  414. 
See  Pirtle  v.  Penn,  3  Dana,  240,  248. 

(y)  Knowles  v.  Haughton,  1 1  Ves.  168. 


282  THE   LAW   OF    PARTNERSHIP.  [CH.  VIII. 

however,  lias  not  only  a  special  importance,  but  some  peculiar  dif- 
ficulties; and  we  propose  to  treat  of  Dissolution  by  Decree  —  its 
causes,  methods,  and  consequences  —  by  itself. 

So,  too,  equity  is  often  called  upon  to  decree  a  sale  of  the  part- 
nership property  ;  but,  as  this  would  itself  amount  to  a  dissolution, 
or  at  least  arrest  the  business  of  the  partnership  for  the  time  being;, 
and  would  be  an  exertion  of  the  power  of  equity  which  could  never 
be  called  for  unless  where  there  was  or  should  be  a  dissolution, 
we  shall  consider  this  subject  in  connection  with  that  of  the  dis- 
solution of  partnership  ;  not,  however,  altogether  in  the  chapter 
on  dissolution  by  process  of  law ;  for  a  sale  may  also  be  decreed 
where  the  dissolution  is  by  expiration  of  a  limited  period  by  agree- 
ment of  the  partners,  or  by  the  death  of  one  or  more  of  them. 

§  208.  Account  how  Settled.  —  Perhaps  the  aid  of  equity  is  not 
invoked  in  any  cases  in  which  it  is  more  indispensable,  or  more 
useful,  than  when  it  is  asked  to  settle  the  accounts  between  the 
partners.  And  it  may  be  well  to  say  something  of  the  principles 
by  which  it  will  be  guided  in  making  such  settlement. 

In  the  first  place,  it  is  perfectly  competent  for  the  partners  to 
agree,  at  their  own  pleasure,  how  the  accounts  shall  be  settled  ; 
and  if  such  agreements  are  entered  into  in  good  faith  by  all  the 
parties,  and  are  not  in  themselves  oppressive  and  injurious, 
they  will  be  carefully  respected,  (z)  And  not  only  will  equity 
thus  regard  express  agreements  how  to  settle,  but  will  draw  from 
the  words,  or  from  the  acts  of  the  parties,  considered  in  connec- 
tion with  all  the  circumstances,  whatever  inference  or  information 
it  can  as  to  their  original  or  subsequent  intention  and  understand- 
ing, and  will,  on  the  same  condition  that  this  method  be  honest 
and  not  injurious,  carry  it  into  effect.  Thus,  if  there  have  been 
many  settlements,  or  even  one,  previously  made  between  the  part- 
ners, if  this  be  not  now  objected  to  by  either  of  them  for  good 
cause,  and  be  not  itself  obviously  and  considerably  objectionable, 
the  court  will  be  disposed  to  adopt  this  as  an  example  and  pre- 
cedent, and  direct  the  future  accounts  to  be  made  up  on  the  same 
principle,  (a) 

{z)  Jackson  v.  Sedgwick,  1  Swanst.  460.  the  articles  should  not  be  executed.  Lord 
And  this  remains  true,  though  the  articles  Cowper  decreed  an  account  of  the  part- 
containing  the  provision  respecting  the  nership  according  to  the  terms  of  the 
modeof  taking  the  accounts  be  not  actually  draft  of  the  articles,  so  far  as  the  same 
executed  by  the  parties.  As  where  arti-  were  reduced  to  a  certainty.  Worts  i: 
clcs  were  entered  into  for  a  ]iartnership,  Pern,  3  Bro.  P.  C.  558. 
and,  two  of  the  partners  being  esquire  (a)  Jackson  v.  Sedgwick,  1  Swanst. 
beadles  of  the  University  of  Cambridge,  460,  469  ;  Pettyt  v.  Janeson,  6  Madd. 
it  was  agreed  to  conceal  the  partnership  146  ;  a^ite,  §§  164,  167,  and  notes, 
from  the   University,  and  therefore  that 


§  209.]  OF    THE    REMEDIES    OF    PARTNERS    INTER    SE.  283 

If  it  be  necessary,  equity  will,  on  sufficient  proof,  compel  the 
production  of  concealed  articles,  or  agreements  as  to  the  method 
or  principles  of  accounting  ;  or,  if  they  are  ascertained,  but  cannot 
be  produced,  will  order  an  account  to  be  taken  in  conformity  with 
them.  The  topic  of  "  account  "  has,  however,  so  much  extent  and 
importance  in  the  law  of  partnership,  that  we  propose  to  consider 
it  in  a  chapter  by  itself. 

If  a  partner  files  a  bill  in  equity  against  his  copartners,  after  the 
termination  of  the  copartnership,  it  has  been  held  that  all  the 
parties  are  to  be  regarded  as  actors  ;  and  the  decree  should  settle 
the  partnei'ship  concerns  between  all  the  partners,  as  if  each  had 
filed  a  bill  against  his  copartners,  (nw) 

It  may  be  regarded  as  a  general  rule,  that  a  bill  in  equity  by  a 
partner  for  a  balance  must  show  a  final  settlement  of  the  partner- 
ship affairs,  or  ask  the  court  to  make  such  a  settlement,  (nnn) 

When  there  is  a  prayer  to  restrain  a  partner  from  acting  as  a 
partner  until  an  account  and  settlement,  and  also  for  this  account 
and  settlement,  and  the  affidavit  filed  by  the  defendant  asserts 
(without  contradiction)  that  the  plaintiff  has  possession  of  the 
partnership  books,  and  that  the  defendant  is,  for  this  cause,  unable 
to  render  a  true  account,  or  to  put  in  a  full  answer,  it  seems  that 
the  bill  will  be  dismissed,  although  improper  conduct  on  the  part 
of  the  defendant  be  not  denied,  (i) 

§  209.  Decree  for  Injunction. — There  is  nothing  in  the  prac- 
tice or  principles  of  equity  as  to  the  enforcement  of  specific 
rights  strictly  peculiar  to  cases  of  partnership.  The  essentials  to 
give  equity  jurisdiction  are  three  :  There  must  be  a  contract, 
which  may  be  express  or  implied,  but  must  be  valid  at  law  ;  there 
must  be  an  infringement  of  this  contract  which  is  not  technical 
merely,  but  material  and  substantial  ;  and  the  remedy  at  law 
must  be  inadequate.  In  such  cases  a  court  of  equity  will  frame 
its  remedy  so  as  to  make  it  in  the  greatest  degree  complete  and 
effectual ;  and  this  may  be  in  a  positive  form,  by  decree  of  spe- 
cific performance,  or  in  a  negative  form,  by  injunction.     The  for- 

(nn)  Raymond  v.  Carne,  45  N.  H.  201.  then  move  the  court  to  stay  proceedings 

(nnu)  Williamson     v.     Haycock,     11  against   him  for   not  putting   in  his  full 

Iowa,  40.  answer,   until  he  has  been  assisted  with 

(i)  Littlewood    v.  Caldwell,    11   Price,  that  inspection.     It  seems,  that,  in  such 

97.     But   where  the  bill  calls  for  a  dis-  cases,  a  motion  by  the  defendant  for  the 

covery  which  the  defendant  cannot  make  production    of    the   books   and  accounts, 

completely  without  seeing  the  partnership  before  anawer,  will  be  refused.     Pickering 

books  and  accounts,  which  are  not  in  his  v.    Rugby,    18    Ves.    484.     See   Kelly    v. 

possession,    but  which  he  believes  to   be  Eckford,  5    Paige,    548,  550  ;    3    Daniel) 

in  the  hands  of  the  plaintiff,  he  must  put  Ch.  Pr.  (Perkins'  ed.)  2071,  2072. 
in  an  answer  stating  to  that  effect,  and 


284  THE   LAW   OF   PARTNERSHIP.  [CH.  VIII. 

mer  having  been  somewhat  considered,  we  will  now  treat  of  the 
lattcr.i 

Injunction  is  one  of  the  most  stringent  measures,  as  well  as 
one  of  the  most  efficacious  remedies,  within  the  practice  or  power 
of  equity.  It  is  never  made  use  of  on  slight  or  merely  tem- 
porary grounds.  (6)  The  reasons  against  interfering  between 
married  parties  are  regarded  —  not  only  in  the  civil  law,  to 
which  we  have  already  referred,  but  at  common  law  —  as  having 
some  application  to  partnerships,  (c)  Mere  failure  or  infirmity 
of  temper,  disputes,  which,  however  vexatious,  are  not  positively 
injurious,  or  other  similar  troublesome  but  tolerable  grievances, 
will  not  induce  equity  to  apply  this  remedy.  Nor  will  injunction 
issue  where  there  is  reason  to  believe  that  it  will  not  be  effi- 
cacious and  entirely  remedial;  nor  in  case  it  will  probably  inflict 
an  extreme  inconvenience,  or  other  mischief,  beyond  what  the 
character  or  exigency  of  the  case  calls  for  or  justifies,  (d) 

It  is  said  that  equity  will  not  interfere,  by  injunction,  where 
there  is  only  a  single  breach  of  a  covenant,  actual  or  threatened, 
or  but  one  or  two ;  and  not  unless  there  are  many  or  a  series  of 
similar  wrong-doings,  such  as  would  amount  to  a  course  of  bad 
and  injurious  conduct,  (e)  This  may  be  a  rule  which  would 
operate  as  far  as  the  reason  of  it  goes ;  which  is,  that  for  such 
single  breaches  the  injured  party  may  be  left  to  his  remedy  at 
law,  while  the  proper  course,  in  a  case  of  continued  bad  conduct, 
is  to  put  a  stop  to  it.  But  there  can  be  no  arbitrary  rule  that 
equity  will  not  interfere,  by  injunction,  in  a  case  of   a  single 

{b)  Gootlman  v.  Whitcomb,  1  Jac.  &  (c)  Goodman  v.   Wliitcomb,   1  Jac.  & 

W.  592  ;  Marshall  v.  Colman,  2  Jac.  &  W.     W.  592. 

266  ;  Wray  v.  Hutchinson,  2  Mylne  &  K.  (d)  Smith  v.  Fromont,  2  Swanst.  330. 

235  ;  Henn  v.  Walsh,  2  Edw.  Ch.  129.  (e)  Marshall  v.  Colman,  2  Jac.  &  W. 

266. 

1  Injunction.  One  partner,  without  asking  for  a  dissolution,  may  in  an  exceptional 
case  secure  the  aid  of  equity  to  prevent  his  copartner  from  doing  him  a  wrong.  Thus 
a  partner  may  be  enjoined  from  carrying  on  another  business,  contrary  to  the  provis- 
ions of  the  articles.  Levine  v.  Michel,  35  La.  Ann.  1121.  So  a  partner  may  be  en- 
joined from  excluding  his  copartner  from  the  business.  Anonymous,  2  K.  &  J.  441  ; 
'Rutland  Marble  Co.  v.  Ripley,  10  Wall.  339. 

Upon  dissolution,  a  partner  may  have  an  injunction  pending  the  account  to  prevent 
any  disposition  of  the  assets  by  his  copartner  which  would  cause  irreparable  loss. 
Wilkinson  v.  Tilden,  9  F.  R.  683.  Or  to  i)revent  any  fraudulent  or  mischievous  deal- 
ing with  the  property.  Shannon  v.  Wright,  60  Md.  520.  So  a  surviving  partner  may 
he  enjoined  from  so  dealing  with  the  assets  as  to  waste  them,  especially  if  he  is  in- 
solvent. Fletcher  v.  Vandusen,  52  la.  448  ;  Gable  v.  Williams,  59  Md.  46  ;  Jennings 
I'.  Chandler,  10  Wis.  21.  So  upon  dissolution  one  partner  may  be  enjoined  from 
advertising  a  discontinuance  of  the  business  (ante,  §  181),  or  from  using  the  old  firm 
name  in  such  a  way  as  to  hold  out  his  former  copartner  as  still  a  partner  {ante,  §  182). 


§  211.]  OF   THE    REMEDIES   OF   PARTNERS   INTER    SE.  285 

breach,  if,  in  other  respects,  the  conduct  of  the  defendant  calls 
for,  and  is  suited  to,  equitable  relief. 

§  210.  May  issue  without  Dissolution.  —  A  question  has  arisen, 
somewhat  analogous  to  one  we  had  occasion  to  consider  in  refer- 
ence to  a  prayer  for  account,  which  is,  whether  injunction  will  be 
decreed  where  dissolution  is  not  decreed,  or  is  not  asked  for. 
Our  general  answer  would  be  the  same.  But  it  seems  to  be  much 
more  clearly  determined,  that  neither  dissolution  nor  a  prayer  for 
it  is  a  necessary  foundation  for  injunction,  than  that  they  are  not 
necessary  for  an  account.  (/) 

It  is  undoubtedly  true,  that  so  extreme  a  remedy  as  that  of 
injunction  —  which  entirely  arrests  the  proceedings  of  the  person 
against  whom  it  is  aimed,  and  utterly  disables  him  as  to  the 
subject-matter  of  it  —  would  seldom  issue,  unless  it  were  made 
necessary  by  a  grievance  which  would  suffice  for  a  decree  of  dis- 
solution, if  that  were  called  for,  or  seemed  to  be  the  proper 
remedy.  But  not  only  does  this  decree  issue  without  dissolution, 
but  its  propriety  was  not  questioned,  even  in  a  case  where  the 
prayer  of  the  bill  was  .for  the  protection  and  preservation  of  the 
partnership,  of  which  the  defendant  threatened  dissolution.  (^) 

§  211.  Injunction  to  restrain  Misconduct  of  Partner.  — The  Cases 
are  numerous  and  varied  where  injunction  has  been  sought  and 
granted  to  restrain  a  partner  from  making  an  improper  use  of 
the  partnership  property,  credit,  or  name.     This  may  be  by  vio- 

(/ )  In  Marshall  v.  Colman,  2  Jac.  &  v.   "Wallace,   2  MoUoy,   540 ;   Natusch  v. 

W.  266,  it  seems  to  have  been  questioned  Irving,    Gow  on    Part.     App.    398,   406  ; 

by  Lord  Eldon  whether  equity  would  in-  Cooper,  358  ;  Loscombe  v.  Russell,  4  Sim. 

terfere   between    partners    by   injunction,  11  ;   Heun  v.   Walsh,   2  Edw.    Ch.    129  ; 

unless  there  was  ground  for,  and  the  bill  Glassington  v.  Thwaites,  1  Sim.  &  S.  124, 

prayed  a  dissolution  of,  the  partnership.  130,  note. 

But  in  Charlton  v.  Poulter,  19  Ves.  148,  (g)  An   application    was    made,    some 

note,   where  the  partnership   was  for  an  years  ago,  to  the  court  of  chancery,  for  an 

unexpired  term,  the  court  restrained  the  injunction  to  inhibit  the  defendants  from 

gross  personal  misconduct  of  one  partner,  dissolving  a  commercial  partnerehip  ;  the 

though  there  was  no  prayer  for  a  dissolu-  other   side   proposed   to   defer  it,   as  not 

tion   before   the  expiration  of  the  term,  having  had  time  to  answer  the  affidavits  ; 

Tlie  principle  of  this  last  case  seems  to  be  but  it  was  insisted,  that  this  was  in  the 

supported  by  the  opinion  of  Lord  Eldon  in  nature  of  an  injunction  to  stay  waste,  and 

Goodman  v.  Whitcomb,  1  Jac.  &  W.  592.  that  irreparable  damage  might  ensue.     At 

And  in  Mills  v.  Thomas,  9  Sim.  609,  Sir  length  the  court  deferred  it,  the  defend- 

L.    Shaiiwell,    V.    C,    said:     "I   am  of  ants  undertaking  not  to  do  anything  pre- 

opinion  that  the  court  ought  to  interfere  judicial  in  the  mean  time.     But  no  doubt 

between    copartners,    whenever    the    act  arose  concerning  the  general  propriety  of 

complained  of  is  one  that  tends  to  the  de-  such   an   application.  .Chavany    v.    Van 

struction  of  the  partnership  property,  not-  Sommer,  cited  in  3  Wood.  Lee.  416,  n.,  1 

withstanding  a  dissolution  of  the  partner-  Swanst.  512,  n.      , 
ship  may  not  be  prayed."     See  Anderson 


286  THE   LAW   OF   PARTNERSHIP.  [CH.  VIIL 

lation  of  partnership  articles,  or  a  breach  of  a  duty  imposed  by 
law,  or  a  wrongful  act  forbidden  by  law.  Thus,  if  a  partner 
becomes  grossly  intemperate,  or  involves  the  partnership  foolishly 
in  debt,  or  wastes  its  resources,  (A)  or  becomes  insolvent,  (^)  or 
obstructs  or  embarrasses  or  lessens  the  partnership  business,  (y) 
or  misapplies  its  property, (A-)  or  in  any  way  injurious  to  the 
partnership  grossly  misconducts,  (/)  —  equity  will  not  only  re- 
strain him  from  the  particular  wrongful  acts  complained  of,  but, 
more  generally,  from  using  the  name  of  the  firm  on  any  negoti- 
able jiaper,  or  from  contracting  any  debt  for  the  partnership,  or 
receiving  any  payment.  (w«)  But  a  disability  so  general  as  this 
would  amount  to  a  dissolution  of  the  partnership,  and  that  would 
in  most  cases  be  preferred  as  the  most  complete  and  adequate 
remedy. 

It  has  even  been  intimated  that  equity  would  interfere  in  this 
way  if  a  partner  should  put  himself  in  a  position  which  lays  him 
under  a  strong  temptation  to  interfere  with  the  interests  or  dam- 
age the  business  of  the  firm,  (w)  Nor  do  we  see  any  reason  why, 
in  a  case  of  this  kind,  of  sufficient  magnitude,  the  court  should 
refuse  its  interference  until  something  had  been  done  to  show 
that  the  temptation  had  been  yielded  to  and  wrong  actually  inflicted. 

§212.  Injunction  after  Dissolution. — If  a  partnership  have 
been  dissolved,  and  either  of  the  partners  attempt  to  carry  on  the 
former  business  for  their  own  benefit,  and  in  a  way  injurious  to 
the  former  partners,  the  injured  partners  may  have  an  injunc- 
tion, (o)  1  So,  if  an  account  has  been  finally  settled  between  the  part- 
ners, and  one  or  more  of  the  partners  has  undertaken  to  pay  all  the 
outstanding  debts,  or  certain  specified  debts,  and  to  indemnify 
the  other  partner,  if  he  be  compelled  to  pay  any  of  these  debts, 
and  this  other  partner,  being  obliged  to  pay  them  or  any  of  them, 
should  obtain  and  retain  money  which,  by  the  contract  of  settle- 

(h)  Mills  V.  Thomas,  9  Sim.  606,  609  ;  (m)  The  usual  form  of  the  order  for  an 

Gratz  V.  Bayard,  11  S.  &  R.  41,  48.  injunction  against  a  partner,  is,  "  that  an 

(i)  Lawson  v.  Morgan,  1  Price,  303.  injunction  be  awarded  against,  &c.,  from 

(j)  Charlton  i>.  Poulter,  19  Ves.  148,  n.  entering  into  any  contract  or  contracts, 

{k)  Williams  v.  Bingley,  2  Vern.  278,  and  from  accepting,  &c.,  any  bills,  &c.,  in 

note;  Master  t).  Kirton,  3  Ves.  74.  the  name  of  the  copartnership,  &c."  Seton's 

(?)  Glassington  v.  Thwaites,  1  Sim.  &  Decrees,  308.     See  Williams  v.  Bingley,  2 

S.  124  ;  Hood  v.  Aston,  1  Rnss.  412.    As,  Vern.  278,  note. 

if  a  partner  removes  the  partnership  books  (n)  Glassington  w.  Thwaites,  1  Sim.  & 

from  the  place  of  business  of  the  firm,  he  S.  133.     See  Burton  v.  Wookey,  6  Madd. 

will  be  restrained  by  injunction  from  keep-  367. 

ing  them  at  anv  other  place.     Greatrix  v.  (a)  De   Tastet  v.    Bordenave,    Jacobs, 

Greatrix,  1  De  G.  &  S.  692.  516.     {Ante,  §  182,  note.] 
1  See  Wilkinson  v.  Tilden,  9  F.  R.  683. 


§  214.]  OF   THE   REMEDIES   OF    PARTNERS   INTER   SE.  287 

ment  belongs  to  the  indemnifying  partners,  they  might  bring  an 
action  at  law  for  the  money  so  retained.  If,  however,  the  settle- 
ment and  agreement  of  indemnification  could  not  be  used  as  a 
defence,  or  by  way  of  estoppel  or  set-off  or  otherwise,  equity 
would  interfere  and  decree  an  injunction  against  these  proceed- 
ings at  law.  (p)  Generally,  as  we  have  already  seen,  courts  of 
law  would  refuse  jurisdiction  of  a  question  of  partnership,  where 
they  could  not  give  adequate  remedy.  And  in  this  country,  the 
more  liberal  practice  of  courts  of  law,  and  the  marked  approach 
of  equity  and  law  towards  each  other,  would  render  unnecessary, 
perhaps  always,  such  an  exercise  of  the  powers  of  equity. 
Still,  it  is  clearly  within  the  system  of  equity  jurisdiction  and 
action,  and  the  authorities  show  that  this  remedy  has  been 
applied.  (^) 

§  213.  To  restrain  carrying  on  of  Business.  — If,  upon  settle- 
ment, it  is  agreed  that  one  or  more  of  the  partners  shall  not 
exercise  or  carry  on  a  certain  trade  within  certain  limits,  and  a 
valuable  consideration,  either  by  other  agreements,  or  in  any  way, 
is  given  for  this ;  or  if  on  submission  to  arbitrators  of  the  affairs 
of  a  partnership  for  final  settlement,  an  award  is  made  to  the 
same  effect,  and  tlie  partner  so  inhibited  does  set  up  or  exercise 
that  trade  or  business,  in  violation  of  the  agreement  or  award,  — 
injunction  would  issue  against  him.  (r)  And  this  has  been 
granted  where  the  inhibition  did  not  appear  expressly  in  the 
award,  but  it  was  proved  that  the  award  was  made  on  that  basis,  (s) 

So  too,  if,  during  a  partnership,  a  partner  establishes  and  carries 
on  a  business  adverse  and  injurious  to  that  of  the  partnership, 
which,  as  we  have  seen,  the  law  forbids  him  to  do,  —  or  even 
threatens  and  prepares  to  do  this,  —  he  will  be  restrained  by 
injunction.  (Q 

§  214.  To  restrain  Tvrongful  use  of  Trade  Name.  —  So  if  a  part- 
ner use  the  name  of  the  firm  in  any  wrongful  way,  he  will  be 

{]))  Gold  V.  Canliam,  1  Cas.  Ch.  311,  2  from   thai    stipulated   in   his    agreement 

Swanst.  325.     Where,  on  the  dissolution  with  D.     Devau  v.  Fowler,  2  Paige,  400. 
of  a  copartnership  between  D.  &  F.,   D.  (q)  See  preceding  note, 

agreed  with  F.  that  F.  should  take  all  the  [r)   Williams  v.   William.s,    2   Swanst. 

stock  and  effects,  and  pay  all  the  debts  2.'i3,  1   Wilson  Ch.  473,  n.  ;   Harrison  v. 

due  by  the  Hrni,  and  afterwards  F.  became  Gardner,  2  Madd.   198  ;  a«<e,  §    181  and 

insolvent  and  threatened  to  dispose  of  all  note 

the  partnership  property  and  apjiropriate  (s)  Harrison  v.  Gardner,  supra. 

the  same  to  his  own  individual  use,  leaving  (<)  See  Burton  v.  Wookey,    6   Madd. 

tlie  debts  unpaid  ;    upon  a  bill   filed   for  367  ;  Coates  v.  Coates,  6  Madd.  287  ;  Long 

that  purpose,  an   injunction  was  granted  v.  Majestre,  1  Jolins.  Ch.  305  ;a?ife,§150, 

restraining  F.  from  disposing  of  the  part-  ct  seq.,  and  notes ;  §  211,  note  (n). 
uership   property   in   a   different  manner 


288  THE   LAW   OF   PARTNERSHIP,  [CH.  7111. 

restrained,  (w)  And  it  is  intimated  that  injunction  will  issue, 
if  he  signs  tlie  instruments  of  the  firm  with  a  name  which  pur- 
ports to  be  the  name  of  the  firm,  but  is  not  so  in  fact  or  by 
the  agreement  of  the  partners,  (v) 

§  215.  Injunction  against  or  for  Surviving  Partner.  —  Causes  for 
injunction  sometimes  arise  where  one  of  the  partners  has  de- 
ceased. We  shall  presently  see  that  this  event  always  makes, 
strictly  speaking,  a  dissolution ;  but  it  may  leave  certain  rights 
behind  it  which  will  be  protected  by  injunction.  Thus,  any  mis- 
application of  the  partnership  funds  by  the  surviving  partner 
will  be  prevented  by  injunction,  (w)  But  there  must  be  sufficient 
evidence  of  the  fact,  or  of  imminent  danger ;  for  a  mere  appre- 
hension that  the  surviving  partner  may  abuse  his  powers  will  not 
induce  a  court  to  restrain  and  embarrass  him  in  the  exercise  of 
these  powers,  {x)  Where  the  representatives  of  the  deceased  do, 
or  propose  to  do,  a  wrong  to  the  surviving  partners,  the  latter 
may  have  their  remedy  by  injunction.  As,  if  the  deceased  held 
a  lease,  or  other  real  chattel  or  real  estate,  in  his  own  name,  but 
actually  as  partnership  property  and  for  the  partnership,  and  his 
executors  propose  to  hold  or  apply  this  as  the  private  assets  of 
the  deceased,  they  will  be  restrained  by  injunction.  (?/) 

§  216.  Injunction  against  Third  Persons.  — As  partners  who  suf- 
fer from  misconduct  of  their  copartners  may  have  injunction 
against  them,  so  they  may  against  third  parties  who  are  parti- 
cipant with  the  partners  in  tiie  wrong-doing.  Thus,  if  a  partner, 
in  fraud  of  the  firm,  makes  or  accepts  or  indorses  negotiable 
paper  with  the  name  of  the  firm,  but  for  his  own  use,  injunction 
against  negotiating  or  using  the  same  will  issue  against  a  third 
party  in  possession  of  the  note,  unless  he  came  into  possession  of 
it  for  value,  and  in  ignorance  of  its  fraudulent  origin,  (z) 

Where  a  note  was  made  by  one  who  had  been  a  partner  of  tlie 
firm  until  its  dissolution,  and  who  signed  it  with  the  name  of  the 
firm,   it  was   doubted  whether  injunction    should   issue   against 

(it)  As  if  he  accept  or  negotiate  laills  of  the  partnership  premises.  Elliot  v.  Brown, 

exchange,  in  the  partnership  name,  but  not  3  Swanst.  489,  n. 

for   partnership   purposes.     Ante,   §   211,  (x)  Woodward  v.  Schatzell,    3  Johns, 

cases  cited  in  note  (k)  ;  post,  note  {z).  Ch.  412  ;  Walker  v.  Trott,  4  Edw.  Ch.  38. 

(y)  Marshall  r.   Colman,   2  Jac.  &  W.  As  to  the  rights  and  powers  of  surviving 

266.  partners  generally,  see    ost. 

{w)  Hartz   v.    Schrader,    8   Ves.    317.  (ij)   Alder  v.  fouracre,  3  Swanst.  489. 

Thus,  upon  motion  by  the  representatives  (s)  Hood  v.  Aston,  1  Russ.   412,  415  ; 

of  a  deceased  partner,  the  surviving  part-  Jervis  v.  White,  7  Ves.  413.     See  Master 

ner  will  be  restrained  from  bringing  eject-  v.'  Kirtan,   3  Ves.   74  ;    CoUyer  on   Part, 

ment  upon  his  title,  as  surviving  lessee  of  §340,   note   (1);   Newman   v.  Milner,  2 

Ves.  483 


§  216.] 


OF    THE    REMEDIES    OF    PARTNERS    INTER    SE. 


289 


the  liolder,  because  he  could  make  no  use  of  the  note  at  law  ;  it 
being,  in  fact,  a  note  without  a  signature,  (a)  But  the  better 
doctrine  undoubtedly  is,  that  the  use  of  the  partnership  name 
after  its  dissolution  will  be  prohibited  by  injunction,  because  it 
may  not  only  expose  the  former  partners  to  a  suit  at  law,  but,  if 
they  should  have  been  remiss  in  giving  notice  of  their  dissolu- 
tion, it  might,  under  some  circumstances,  bind  them  to  the  pay- 
ment of  the  paper  in  the  hands  of  an  innocent  holder  for 
value,  (b). 

We  shall  hereafter  consider,  in  a  separate  chapter,  the  manner 
in  which  the  creditors  of  the  firm  and  of  the  separate  partners 
may  obtain  from  the  i)roi)crty  of  the  firm  or  of  the  separate  part- 
ners the  security  or  payment  to  which  they  are  entitled.  The 
subject  is  one  of  much  difficulty  as  well  as  importance.  We  will 
not  anticipate  it  here  so  far  as  to  inquire  what  rights  of  attach- 
ment or  levy  a  sej)arate  creditor  has  on  the  property  of  the  firm, 
or  on  tiie  interest  of  the  separate  partner  who  is  his  debtor,  in 
that  property.  We  will  say,  only,  that  if  such  creditor  proceeds,  or 
proposes  to  proceed,  to  an  interference  with  the  property  of  the 
firm,  —  whether  by  attachment  or  levy,  —  to  which  he  has  no  legal 


{(i)  Ryan  v.  Mackmath,  3  Bio.  C.  C  15, 
{b)  As  far  as  Ryan  v.  Maekniatli,  supra, 
nan  be  reganled  as  autliority  for  the  rule 
that  equity  will  not  restrain  the  ini])roi)er 
use  of  the  jnirtnership  name  by  one  of  the 
partners  after  dissolution,  it  is  no  longer 
law.  Lord  Chancellor  Thurlow  there  de- 
cided that  he  would  not  order  an  instru- 
ment to  be  delivered  up  and  the  name  to 
be  erased,  upon  which  an  action  could  not 
be  maintained  at  law.  Upon  the  same 
princi])le,  it  has  been  said  that  equity 
would  not  restrain  by  injunction  the  use 
of  the  partnership  name  after  dissolution. 
But  the  doctrine  of  Lord  Thurlow  in  Ryan 
V.  Mackmath  has  since  been  overruled.  It 
is  now  clearly  settled  that  courts  of  equity 
have  jurisdiction  to  order  an  instrument  to 
be  delivered  up  and  cancelled,  notwith- 
standing it  be  void  at  law,  and,  perhaps, 
even  though  its  nullity  be  apparent  on  its 
face,  wherever  the  circumstances  of  the 
individual  case  render  such  interference 
expedient.  See  Ryan  v.  Mackmath,  3  Bro. 
C.  C.  1.5  (Perkins'  ed.),  and  notes,  Hamil- 
ton V.  Cummings,  1  Johns.  Ch.  517,  520; 
Grover  v.  Hugell,  3  Russ.  432  ;  Hodgson 
V.  Murray,  2  Sim.  515,  3  Sim.  382  ;  Simp- 


son u.  Howden,  3  Mylne  &  C.  97,  104; 
Peirsole  v.  Elliott,  6  Pet.  95  ;  Duncan  v. 
Worrall,  10  Price,  31  ;  Thompson  v.  Gra- 
ham, 1  Paige,  384  ;  Pettit  v.  Shepherd,  5 
Paige,  493  ;  Torrey  v.  Buck,  1  Green  Ch. 
306  ;  Jones  v.  Perry,  10  Yerg.  59  ;  Maise 
V.  Garner,  Mart.  &  Y.  383  ;  Garrett  v. 
Miss.  &  Ala.  R.  Co.,  1  Freem.  Ch.  70: 
Sessions  V.  Jones,  6  How.  (Miss.)  123  ; 
Leigh  V.  Everhart,  4  T.  B.  Mon.  379,  380  ; 
2  Story  E(i.  §§  698-702  ;  1  Madd.  Ch.  301. 
The  authority  of  Ryan  v.  Mackmath 
not  being  valid  to  prevent  courts  of  equity 
from  restraining  the  use  of  a  partnership 
name  after  dissolution,  there  would  seem 
to  be  no  reason  why  they  should  not  do 
this,  but,  on  the  other  hand,  as  suggested 
in  the  text,  strong  reason  why  they  should. 
In  Webster  v.  Webster,  3  Swanst.  490,  n., 
an  injunction  to  restrain  surviving  part- 
ners from  using  the  name  of  a  deceased 
partner,  in  the  firm  of  the  trade,  was 
refused.  Possibly  this  case  was  decided 
upon  the  ground  that  the  right  to  retain 
the  partnership  name,  considei'ed  as  an  in- 
terest of  the  nature  of  good-will,  survived 
to  the  I'emnining  partners.  See  Lewis  D. 
Langdou,  7  Sim.  421. 
19 


290 


THE   LAW   OF   PARTNERSHIP. 


[CH.  VIII. 


right,  it  would  seem  to  be  clear  that  the  firm,  and,  perhaps, 
that  the  joint  creditors  of  the  firm,  may  have  such  interference 
restrained  by  injunction,  (c) 


(c)  A  court  of  law  will  not  interfere  and 
compel  the  cieditor  of  one  partner  to  delay 
satisfying  his  execution  out  of  the  partner- 
ship effects  till  an  account  can  be  taken 
and  the  debtor  partner's  interest  ascer- 
tained. Parker  v.  Pistor,  3  B.  &  P.  288  ; 
Chapman  v.  Koops,  3  B.  &  P.  289.  But  in 
these  very  cases  it  is  intimated  that  relief 
may  be  had,  by  the  debtor's  partners,  or 
the  j)artnership  creditors,  by  bill  in  equity. 
And  the  true  conclusion  to  be  drawn  from 
a  view  of  the  English  authorities  is,  that  a 
separate  creditor  to  whom  execution  has 
issued  for  the  debt  of  one  partner  will  be 
restrained  from  taking  the  partnership 
effects  thereon  until  an  account  has  been 
taken,  and  his  debtor's  interest,  which  is 
alone  properly  subject  to  the  execution, 
ascertained.  Eden  on  Inj.  31.  See  Skipp 
V.  Harwood,  2  Swanst.  586,  587  ;  Lowndes 
i\  Taylor,  1  Madd.  423.  Such  an  injunction 
will  be  granted  at  the  suit  of  the  surviving 
partner,  Newell  t-.  Townseud,  6  Sim.  419  ; 
or  of  tlie  joint  assignees  in  bankruptcy  of 
the  firm,  Taylor  v.  Field,  15  Ves.  559; 
Bevan  v.  Lewis,  1  Sim.  376  ;  Anon.,  2 
Ca.  Ch.  38  ;  and,  upon  the  same  principle, 
the  propertj'  of  the  partnership  will  be 
protected  in  equity,  whether  the  proposed 
interference  proceed  from  assignees  for 
value  of  one  partner's  interest  from  his 
assignees  in  bankruptcy,  or  from  his 
executors  or  administrators.  Taylor  v. 
Fields,  4  Ves.  396  ;  15  Ves.  559  ;' Barker 
V.  Goodair,  11  Ves.  85  ;  Dutton  v.  Mor- 
rison, 17  Ves.  206-209.  And,  it  seems, 
that,  if,  in  cases  of  this  nature,  execution 
be  satisfied  before  injunction  can  be  ob- 
tained, the  court  may  interfere,  and  stay 
the  money  in  the  hands  of  the  sheriff ; 
whom  the  plaintiff  should  properly  make 
a  party  by  su]tplemental  bill,  if  the  money 
has  come  into  his  hands  since  the  injunc- 
tion issued,  or  by  the  original  bill,  if  the 
money  was  in  his  hands  at  the  time, 
franklin  v.  Tliomas,  3  Meriv.  225,  234  ; 
Hawkshaw  v.  Parkins,  2  Swanst.  549.  See 
Axe  V.  Clarke,  2  Dick,  549.  After  judg- 
ment at  law  against  a  firm  for  a  debt,  a 
court  of  equity  will  not,  it  seems,  at  the 


instance  of  one  partner,  grant  an  injunc- 
tion to  stay  execution  on  the  giound  that 
he  had  retired  from  the  partnership  long 
before  the  debt  was  incurred,  and  that  tiie 
plaintiff  at  law  was  apprised  of  it ;  because 
such  circumstances  would  constitute  a 
good  legal  defence.  Protheroe  v.  Forman, 
2  Swanst.  227. 

Wliat  we  have  already  stated  as  the 
doctrine  of  the  English  cases,  namely, 
that  etjuity  will,  by  injunction,  restrain 
the  judgment  creditor  of  a  single  partner 
from  satisfying  his  execution  out  of  the 
partnersiiip  effects,  and  will  compel  him 
to  wait  till  an  account  has  been  taken,  and 
the  interest  of  the  debtor  partner  in  the 
joint  property  definitely  ascertained,  — 
has  been  laid  down  as  the  rule  verj-  gener- 
ally b}'  the  English  text-writers.  See  1 
Madd.  Ch.  132,  189  ;  Gow  on  Part.  [144]  ; 
Collyer  on  Part.  §  831  (Perkins'  ed.); 
Eden  on  Inj.  31.  In  op[iosition  to  this 
conclusion,  however,  we  have  high  au- 
thority in  this  country.  In  Moody  v. 
Payne,  2  Johns.  Ch.  548,  the  precise  point 
came  before  Chancellor  Kent,  and  was 
decided  contrary  to  the  rule  we  have 
above  supposed  to  be  deducible  from  the 
English  cases.  Judge  Story's  opinion,  on 
the  other  hand,  is  in  consonance  with  the 
doctrine  of  the  text.  Story  on  Part.  §  264. 
And  Chancellor  Kent  himself,  while  main- 
taining that  Moody  v.  Payne  is  in  accord- 
ance with  the  weight  of  authority,  seems 
to  intimate  that,  in  his  own  opinion,  the 
contrary  doctrine  is  founded  on  the  better 
reason.  In  3  Kent  Comm.  [65],  note,  he 
says,  after  referring  to  Moody  v.  Payne 
and  Judge  Story's  comments  thereon  : 
"  As  I  have  already  observed,  the  more  fit 
and  suitable  rule  of  practice  would  seem 
to  be,  to  have  the  adjtistment  of  the  part- 
nership account  precede  the  sale.  But  the 
current  of  authorities,  as  I  read  them,  is 
the  other  way,  and  they  are  emphatically 
so  in  New  York."  See,  in  support  of  this 
last  remark,  Phillips  v.  Cook,  24  Wend. 
398,  408  ;  Matter  of  Smith,  16  Johns.  106, 
note;  Hergman  v.  Dettlebach,  11  How. 
Pr.  46.     The  decision  in  Moody  v.  Payne 


§  217.] 


OP  THE   REMEDIES   OF    PARTNERS    INTER   SE. 


291 


§217.  Preliminary  Injunction.  —  IIow  injunction  may  be  ob- 
tained can  be  ascertained  only  by  a  consideration  of  the  processes 
and  practice  of  equity,  which  is  a  topic  by  itself.  It  may,  however, 
be  proper  to  remark,  in  this  connection,  that,  usually,  injunction 
is  not  issued  until  after  the  defendant  has  answered,  or  has  had  a 
sufficient  opportunity  to  answer,  (d)  Tiie  reason  is  obvious  :  the 
court  would  not  apply  so  stringent  a  measure  on  a  mere  ex  parte 
statement  or  evidence.  But  it  is  also  obvious  that  there  may  be 
cases  —  in  partnership  as  well  as  elsewhere  —  in  which  an  in- 
junction must  be  granted  at  once,  in  order  to  be  of  any  use,  and 
where,  of  course,  delay  would  be  the  same  thing  as  refusal.  On 
this  point  the  English  cases  rest,  or  at  least  suggest,  a  distinction 
which  is  somewhat  technical.  If  the  act  which  is  complained  of 
is  waste,  or  distinctly  in  the  nature  of  waste,  injunction  will  issue 
at  once,  on  a  bill  and  affidavits,  if  they  satisfy  the  courts  that 
there  is  sufficient  cause,  (e)  But  if  there  be  no  waste,  then 
there  must  be  delay  until  an  answer  is  filed.  (/ )  We  doubt 
whether  this  rule  has  much  force,  or  frequency  of  application,  in 


was  also  approved  and  followed  in  Sitler  v. 
Walker,  1  Freem.  Ch.  77.  See  Church  v. 
Knox,  2  Conn.  514,  524  ;  Brewster  v. 
Hammet,  4  Conn.  540  ;  Witter  v.  Rich- 
ards, 10  Conn.  37,  43.  See  the  opinions 
of  Parker,  C.  J.,  in  Morrison  v.  Blodgett, 
8  N.  H.  252,  253,  and  Dow  v.  Sayward, 
14  N.  H.  9,  13.  See  also  Hill  v.  Wiggin, 
21  N.  H.  292. 

On  the  other  hand,  it  was  distinctly 
held,  in  Place  v.  Sweetzer,  16  Ohio,  142, 
that  while  partnership  goods  may  be  levied 
upon  nnder  execution  against  one  of  the 
partners,  for  his  separate  debt,  the  sale  in 
such  case  may  be  restrained  by  injunction 
till  the  interest  of  the  partner  is  ascer- 
tained. And  in  Cammack  v.  Johnson,  1 
Green,  Ch.  163,  the  court  intimated  its 
opinion  to  be  to  the  same  effect,  though  it 
was  not  considered  necessary  to  decide  the 
question.  So  also  in  White  v.  Woodward, 
8  B.  Mon.  484.  See  further  Moore  v. 
Sample,  3  Ala.  319,  320. 

The  above  are  the  principal  direct  au- 
thorities upon  the  point  under  discussion. 
In  none  of  them,  perhaps,  is  the  general 
principle  upon  which  the  question  turns 
thoroughly  investigated  ;  and  it  is  evident 
that  the  answer  to  the  question  must 
de])end  upon  the  right  of  control  over  the 
partnership  effects  which  the  creditor  of  a 


single  partner  acquires  by  a  judgment  and 
execution  against  him.  We  shall,  therefore, 
refer  to  this  subject  again  when  we  coTue 
to  speak  of  the  remedies  of  the  creditors  of 
individual  partners. 

{d)  Anonymous,  1  Ves.  476 ;  Lawson  v. 
Morgan,  1  Price,  303  ;  Adams  Eq.  (Am. 
ed.)  [355-357]  ;  3  Daniell's  Ch.  Pr.  (Per- 
kins' ed.)  1886  ;  Hartridge  v.  Rockwell, 
R.  M.  Charlt.  264  ;  Ogden  v.  Kip,  6 
Johns.  Ch.  160,  161. 

(e)  As  in  case  of  the  insolvency  of  the 
active  partner,  who  continues  to  make  con- 
tracts in  the  name  of  the  partnership. 
Lawson  v.  Morgan,  1  Price,  303.  See  Pea- 
cock V.  Peacock,  16  Ves.  51  ;  Hartz  v. 
Schrader,  8  Ves.  317  ;  Chavany  v.  Van 
Sommer,  M.  T.  10  Geo.  3,  3  Wood.  Lee. 
416,  n.,  1  Swanst.  512,  n. ;  Read  v.  Bow- 
ers, 4  Bro.  441  ;  Collyer  on  Part.  (Per- 
kins' ed. )  §  349,  note. 

{f)"lt  is  a  great  mistake,  and  one 
very  commonly  made,  to  imagine  that  all 
the  numerous  cases  wherein  very  much  in- 
convenience, and  even  loss,  may  be  suf- 
fered, by  consequence  of  the  acts  sought  to 
be  restrained,  are,  therefore,  in  the  nature 
of  waste."  Per  curiam,  Cohnn  V.  Horner, 
5  Price,  537.  See  also  Littlewood  v.  Calil- 
well,  11  Price,  97,  and  Hilton  v.  Granville, 
4  Beav.  130. 


292 


THE   LAW   OF   PARTNERSHIP. 


£CH.    VIII. 


England,  and  we  think  it  would  have  little  or  none  here.  Un- 
less, indeed,  it  should  be  construed  as  merely  a  compendious  way 
of  stating  the  true  rule ;  which  must  be,  that  equity  will  not 
issue  an  injunction,  unless  all  the  case  is  in  and  both  sides  have 
been  heard ;  or  unless  there  is  enough  of  statement  and  evidence 
before  the  court  to  convince  them  that  immediate  remedy  is  de- 
manded, and  there  is  no  apparent  probability  of  its  working  un- 
due mischief,  {g)  In  such  case,  a  temporary  or  preliminary 
injunction  will  issue,  precisely  on  the  same  grounds  and  in  the 
same  way  as  in  cases  not  of  partnership.  And  this  temporary  or 
preliminary  injunction  will  be  made  only  extensive  enough  to 
avert  immediate  and  impending  danger,  and  will  afterwards  be 
dissolved  or  modified  or  made  absolute,  as  shall  seem  to  be  proper 
upon  a  hearing  of  the  whole  case.  (A) 

§  218.  Decree  for  a  Receiver.  —  If  an  injunction  arrests  all 
proceedings  on  the  part  of  a  partner,  the  appointment  of  a 
receiver   actually  ousts   him  from   all   possession   and   control.^ 


{g)  See  2  Story  Eq.  §§  959  a,  959  h,  and 
Adams  Eq.  357,  as  to  the  discretion  which 
courts  of  equity  always  exercise  in  the 
issuing  of  injunctions,  and  the  care  with 
which  the  right  of  all  parties  will  be  pro- 
tected. 

(h)  A  special  injunction  being  usually 
granted  till  answer  or  further  order 
(Seton's  Decrees,  305,  306  ;  Eden  on  Inj. 
325).  a  defendant  may  apply  to  have  it  dis- 
solved, not  only  upon  putting  in  his 
answer,  but  upon  atfidavit  before  answer. 
1  Newl.  Ch.  Pr.  226  ;  3  Daniell,  Ch. 
Pr.  (Perkins'  ed.)  1894,  1895.  And  not- 
withstanding the  general  rule,  that  to  ob- 
tain or  continue  an  injunction,  affidavits 
cannot  be  received,  in  contradiction  to 
assertions  positively  made  by  the  answer 
(Eden  on  Inj.  108,  326  ;  3  Daniell,  Ch.  Pr. 
(Perkins'  ed.)  1827,  1883,  1884),  yet  there 
being  no  question  of  title  between  the 
parties  (id.;  1  Newl.  Ch.  Pr.  227  ;  Adams 
Eq.  356),  in  cases  of  waste,  and  of  mis- 
conduct of  parties  analogous  to  waste,  affi- 
davits filed  jjrior  to  the  answer  may  be 
read  against  it,  as  to  facts  of  waste  or  mis- 
management, though  it  is  otherwise  as  to 
affidavits    filed    after    the    answer.     Id.; 


Smythe  v.  Smythe,  1  Swanst.  252,  254, 
n. ;  Norway  r\  Rowe,  19  Ves.  144  ;  Charl- 
ton V.  Poulter,  19  Ves.  148  ;  Peacock  v. 
Peacock,  16  Ves.  49,  51  ;  Lawson  v.  Mor- 
gan, 1  Price,  303  ;  Eastburn  v.  Kirk,  1 
Johns.  Ch.  444.  See  Roberts  v.  Anderson, 
2  Johns.  Ch.  202 ;  Poor  v.  Carleton,  3 
Sumn.  81,  82 ;  Smith  v.  Cummiugs,  2 
Pars.  Sel.  Eq.  Cas.  92  ;  Lessig  v.  Lang- 
ton,  Bright.  N.  P.  191  ;  Renton  v.  Chap- 
lain,  1  Stock.  62.  In  case  of  imminent 
danger  of  injury  to  a  complainant  partner, 
the  court  may,  after  appearance,  allow  a 
temporary  injunction  to  issue  upon  ])ro- 
posed  amendments  to  the  bill,  granting, 
at  the  same  time,  an  order  to  show  cause 
why  the  bill  should  not  be  so  amended, 
and  the  injunction  continued.  Hayes  v. 
Heyer,  4  Sandf.  Ch.  485.  Where  both  au 
injunction  and  a  receiver  are  sought,  as  in 
some  cases,  the  injunction  may  be  granted, 
but  the  receiver  refused.  Hartz  v. 
Schrader,  8  Ves.  317.  The  application  for 
the  injunction,  and  the  appointment  of  a 
receiver,  should  be  made  the  subject  of  two 
successive  motions.  Lawson  v.  Morgan,  1 
Price,  303. 


1  Receiver.  —  A  court  of  eqiiity  in  the  proper  case  has  power  to  appoint  a  receiver  of 
partnership  property.  Cox  v.  Volkert,  86  Mo.  505.  He  does  not  get  legal  title  to  the 
property,  Ijut  only  right  of  possession  and  of  disposition.  Keeney  v.  Home  Ins.  Co., 
71  N,  Y,  396.     If  it  is  necessary  to  bring  au  action  upon  a  firm  claim,  the  receiver  is 


§  218.]  OF   THE   REMEDIES   OP   PARTNERS   INTER   SE.  293 

This  is,  therefore,  even  a  more  stringent  measure  than  the  former. 
And  if  a  partner  prays  that  a  receiver  may  be  appointed,  or  that 
some  person  be  authorized,  to  manage  the  concern  and  act  as  a 
quasi  receiver,  the  rule  that  the  prayer  will  not  be  granted,  unless 
the  case  entitle  tlie  plaintiff  to  a  dissolution,  seems  to  be  quite 
well  settled  as  a  rule  of  practice.  (/) 

(j)  Goodman  r.   Whitcomb,    1  Jac.  &  Ch.  129;    Garretson   v.   Weaver,   3   Edw. 

W.  589  ;  Oliver  v.  Hamilton,  2  Anst.  453  ;  Cli.   385  ;  Roberts  v.   Eberhardt,   1   Kay. 

Waters  v.   Taylor,  15   Ves.    10  ;  Harrison  148  ;    Walker  v.   House,   4  Md,   Ch.    39  ; 

V.  Annitage,   4    Madd.  143  ;    Richards   v.  Birdsall  v.   Colie,    2  Stock.  63 ;    1    Barb. 

Davies,  2  Russ.  &  M.  347  ;  Smith  v.  Jayes,  Ch.  Pr.  662. 
4  Beav.    503 ;    Henn    v.    Walsh,  2   Kdvv. 

to  bring  it  in  his  own  name.  Henning  v.  Raymond,  35  Minn.  303,  29  N.  W.  132 ; 
Kirkpatrick  v.  McElroy,  41  N.  J.  Eq.  539,  7  Atl.  647. 

During  the  continuance  of  the  partnership,  one  partner  may  ask  for  a  receiver  (always, 
it  would  seem,  as  ancillary  to  a  dissolution)  in  case  the  cojiartner's  conduct  is  fraudu- 
lent, or  in  some  other  way  threatens  to  injure  complainant's  interest  in  the  business. 
Barnes  v.  Jones,  91  Ind.  161  ;  Shannon  v.  Wright,  60  Md.  520.  Such  is  the  case  where 
the  defendant  is  alleged  to  be  insolvent  and  wasting  the  assets,  Phillips  v.  Trezevant, 
67  N.  C.  370;  or  deliberately  breaking  up  the  business,  Sutro  v.  Wagner,  23  N.  J.  Eq. 
388,  24  N.  J.  Eq.  589.  Mere  dis[)ute  or  ill-feeling  between  the  partners  is  not  suffi- 
cient ground  for  a  receiver,  Loomis  v.  McKenscie,  31  la.  425.  Nor  is  the  fact  that  a.dis- 
solution  will  be  decreed  enough  to  secure  the  appointment  of  a  receiver.  It  is  necessary 
also  to  show  that  there  are  disputes  as  to  the  disposition  of  the  property,  and  conflicting 
claims  by  the  partners.  Bufkin  v.  Boj^ce,  104  Ind.  53  ;  Whitman  v.  Robinson,  21 
Md.  30  ;  Wilson  v  Fitchter,  3  Stoct.  71  ;  Richards  v.  Baurman,  65  N.  C.  162.  In  New 
York,  however,  it  would  seem  that  a  receiver  will  be  appointed  as  of  course  if  the  cir- 
cumstances justify  a  decree  for  dissolution.  Marten  v.  Van  Schaick,  4  Paige,  479  ; 
McElvey  v.  Lewis,  76  N.  Y.  373.     See  Jordan  v.  Jliller,  75  Va.  442. 

Where  one  partner  has  the  right  to  settle  the  affairs  of  the  partnership,  as  for  in- 
stance if  the  articles  give  him  the  right,  or  he  is  the  sole  surviving  or  solvent  partner, 
a  receiver  will  not  be  appointed  without  good  cause  to  take  the  settlement  out  of  his 
hands.  Ex  parte  Owen,  13  Q.  B.  D.  113  (C.  A.);  Heflebower  v.  Buck,  64  Md.  15; 
Quinlivan  v.  English,  44  Mo.  46;  Kilbreth  v.  Root,  33  W.  Va.  600,  11  S.  E.  21.  But 
if  the  settling  partner  neglects  his  trust,  or  abuses  it  by  mismanagement  or  wasting  the 
assets  so  that  the  property  is  in  danger,  a  receiver  will  be  appointed.  Word  v.  Word, 
90  Ala.  81,  7  So.  412;  Millers.  Jones,  39  111.  54;  Berry  v.  Folkes,  60  Miss.  576; 
Ballard  v.  Callison,  4  W.  Va.  326. 

Even  after  the  property  has  been  conveyed  to  a  trustee  for  creditors,  the  court  may 
in  case  of  dispute  interfere  and  appoint  a  receiver.     Naylor  v.  Sidener,  106  Ind.  179. 

If  one  of  the  partners  is  a  suitable  person  for  the  trust,  it  is  natural  and  proper  that 
he  should  be  appointed  receiver.  Collins  w.  Barker,  (1893)1  Ch.  578  ;  Reynolds  v. 
Austin,  4  Del.  Ch.  24.  The  receiver  should  be  given  control  of  all  the  propert}'  of  the 
partnership.  Morey  v.  Grant,  48  Mich.  326.  After  a  receiver  is  appointed,  the  prop- 
erty is  within  the  control  of  the  court,  and  it  is  therefore  too  late  for  a  creditor  to  se- 
cure priority  by  attachment  or  other  judicial  pi'oce.ss.  Jackson  v.  Lahee,  114  111.  2S7, 
2  N.  E.  172  ;  McGowan  v.  Myers,  66  la.  99,  23  N.  W.  282.  Though  after  the  busi- 
ness has  been  wound  up,  and  a  balance  in  the  receiver's  hands  adjudgetl  to  belong  to 
one  partner,  it  may  be  reached  by  a  creditor  of  that  partner,  since  it  is  now  too  late 
to  interfere  with  the  proceedings  of  the  court.  Willard  v.  Decatur,  59  N.  H.  137. 
And  before  decree  on  the  bill  a  creditor  may  levy.    Ross  v.  Titsworth,  37  N.J.  Eq.  333. 


294  THE   LAW    OF   PARTNERSHIP.  [CH.    VIII. 

It  has,  perhaps,  some  exceptions.  If  a  wrong-doing  partner 
seeks  to  exclude  his  copartner  from  any  knowledge  of  the  busi- 
ness, or  from  any  share  in  the  management  of  it,  the  injured 
partner  may  have  a  receiver  to  take  and  keep  possession  of  the 
property  until  the  courts  determine  the  rights  of  the  partners; 
and  in  the  mean  time  the  decree  may  provide  for  the  continuance 
of  the  business.  It  is  not,  however,  to  be  denied,  that  strong 
authorities  insist  that  a  receiver  can  be  appointed,  without  dis- 
solution, only  for  the  most  stringent  reasons,  {k} 

But,  in  general,  wherever  the  main  purpose  of  the  suit  is  to 
compel  partners  to  perform  in  good  faith  their  own  agreements 
or  their  obvious  duties,  and  the  appointment  of  a  receiver  seems 
necessary  to  prevent  great  mischief  from  being  done  before  the 
main  question  can  be  settled,  we  presume  that  such  appointment 
would  be  made.  {1} 

It  has  indeed  been  distinctly  decided  in  England,  that  the 
absence  of  a  prayer  for  dissolution  is  not  a  sufficient  ground  for  a 
demurrer  to  a  bill  praying  for  the  appointment  of  a  receiver,  (wi) 

§  219.  Receiver  after  Dissolution.  —  The  far  greater  number  of 
appointments  of  receivers  occur  in  cases  where  a  dissolution  has 
taken  place  or  is  necessary  or  is  intended  ;  (w)  and  one  or  more 
of  the  partners  violates  either  the  express  agreements  or  articles 
of  the  partnership,  or  some  obvious  and  certain  duty  imposed  by 
law.  (o)    The  most  frequent  cause  —  and  it  is  one  that  is,  perhaps, 

{k)  Wilson   V.   Greenwood,   1   Swanst.  of  a  partnership,  the  court  will  not  deter- 

480.     See  next  note,  and  Case  of  Hale  v.  mine   the    questions   arising  between  the 

Hale.  partners,   the  only    object  then   being  to 

(l)  See  Const  w.    Harris,   Turner  &  R.  protect  the  assets  until  the  determination 

496,  517  ;  3  Dan.  Ch.  Pr.  1967;  Milbauk  of   the  rights.      Blakeney  v.   Dufaur,   15 

i;.  Revett,  2  Meriv.   405,  406  ;  Glassington  Beav.    40.      See  Sloan  v.   Moore,   37  Pa. 

V.  Thwaites,   1  Sim.  &  S.  130,   and  note  ;  217- 

Roberts    v.    Eberhardt,  1    Kay,    148.     In  (?/i)  Fairthorne     v.    Weston,    3   Hare, 

Hale  V.    Hale,  3  McN.  &  G.  79  (see  same  387. 

case,  12  Beav.  414),  the  general  doctrine  (ji)  See  Fairburn  v.  Pearson,  2  McN. 
on  this  point  was  said  to  be,  that  where  it  &  G.  144.  In  this  case,  Lord  Chancellor 
is  not  the  object  of  the  suit  to  obtain  a  Cottenham  refused,  upon  motion,  to  ap- 
dissolution  of  the  partnership,  but,  on  the  point  a  receiver  of  a  partnership,  where 
conti'ary,  to  continue  the  partnership,  it  is  the  question  raised  was  whether  the  part- 
not  according  to  the  practice  of  the  court  nership  had  been  dissolved,  but  ilirected 
to  grant,  in  the  course  of  that  suit,  the  ap-  an  issue  to  try  the  fact.  See  Goulding  v. 
jwintment    of    a    receiver  and    manager.  Bain,  4  Sandf.  716. 

And   the  only  limitation  upon  this  doc-  (o)  Harding  v.   Glover,  18   Yes.   281  ; 

trine  adverted  to  was  where  a  party  was  so  Estwick    v.    Conningsby,    1    Vern.    118; 

conducting  himself  that,  unless  a  manager  Crawshay  v.  Maule,  1  Swanst.  507;  Henn 

was  a[ipointed  before  the  hearing,  the  part-  v.  Walsh,  2  Edw.  Ch.  129  ;  Gowan  v.  .Tef- 

nership  concern  might,  in  the  mean  time,  fries,  2  Ashm.   296.      But  in   accordame 

be  destroyed.     Upon  motion  for  a  receiver  with  what  we  have  already  seen  with  res- 


§  219.] 


OF   THE   REMEDIES    OF   PARTNERS   INTER   SE. 


295 


always  sufficient  —  is  the  taking  exclusive  possession  by  a  partner 
of  the  property  or  books  of  the  partnership,  and  his  refusal  to 
admit  his  copartner  to  his  rights  as  to  the  property  and  the  busi- 
ness. ( /?)  But  the  same  reason  and  the  same  principle  apply  to 
any  other  instance  of  substantial  wrong  on  the  part  of  a  partner, 
implied  or  threatened,  of  such  a  kind  that  the  court  can  only 
prevent  it  by  taking  the  property  and  books  out  of  his  hand,  (q} 
It  is  to  be  observed,  however,  that  exclusive  possession  alone 
is  not  sufficient  cause.  This  may  result  from  the  articles,  or  the 
agreement,  or  the  plaintiff  may  not  object  to  it ;  (?-)  for  it  must 
be  an  injurious  and  unjustified  possession  of  the  books  or  prop- 
erty. And  the  ground  on  which  receivers  are  appointed  in  such 
cases  is,  that  every  partner  has  the  same  perfect  right  to  hold  the 
property  and  manage  the  business  that  every  other  partner  has ; 
and  that  the  violation  of  this  right  is  one  of  the  greatest  wrongs 
that  can  be  done  to  a  partner,  (s) 


pect  to  other  modes  of  equitable  interl'er- 
eiice,  a  receiver  will  not  be  granted  on 
slight  grounds.  Speights  v.  Peters,  9 
Gill,  472  ;  Hammil  v.  Hammil,  27  JId. 
679.  Dissolutiun  alone  is  not  sufficient, 
Harding  i'.  Glover,  supra  ;  and  there  must 
be  more  than  trifling  misconduct,  Good- 
man V.  Whitcomb,  1  Jac.  &  W.  589,  593  ; 
Const  V.  Harris,  Turner  &  R.  518.  Thus 
a  receiver  will  not  be  appointed  merely 
because  partners  quarrel,  Texiere  v.  Da 
Costa  in  Chancery,  Nov.  1815,  cited  in 
Collyer  on  Part.  §  354,  note;  Henn  v. 
^Valsh,  2  Edw.  Ch.  129  ;  nor  because  an 
injunction  ex  parte  has  been  granted, 
Garretson  v.  Weaver,  3  Edw.  Ch.  385. 
And  the  dissolution  which  takes  place  on 
the  refusal  of  an  appointee  under  a  will  to 
become  a  partner  is  clearly  not  a  dissolu- 
tion arising  from  the  exclusion  of  the 
appointee  by  the  surviving  partner ;  and 
will,  therefore,  be  no  foundation  for  a 
receiver.  Kershaw  v.  Matthews,  2  Russ. 
62. 

(p)  Wilson  V.  Greenwood,  1  Swanst. 
471,  483  ;  Blakeney  v.  Dufaur,  15  Beav. 
40  ;  Const  v.  Harris,  Turne'*  &  R.  525. 
See  Norway  v.  Rowe,  19  Ves.  144,  159; 
Katsch  V.  Schenck,  13  Jur.  668  ;  Peacock 
i".  Peacock,  16  Ves.  49  ;  Milbank  v. 
Revett,  2  Meriv.  405,  406  ,  Harding  r. 
Glover,  18  Ves.  281.  See  farther  Speights 
V.  Peters,  9  Gill,  472  ;  (inwan  v.  Jeffries, 
2  Ashm.  296  ;  Wolbert  u.  Harris,  3  Halst. 


Ch.  605  ;  Hall  v.  Hall,  12  Beav.  414  ; 
Boyce  v.  Burchard,  21  Ga.  74.  Upon 
apparently  this  ground  of  exclusion,  it 
seems  to  be  held,  in  New  York,  that  if  a 
general  assignment  to  pay  creditors  has 
been  made  by  one  partner,  under  circum- 
stances which  make  it  clear  that  it  is  the 
act  of  one.  partner  only,  without  the  knowl- 
edge and  approval  of  the  other  partners, 
the  assignment  may  be  declared  void,  and 
a  receiver  appointed.  See  Rutter  v.  Tallis, 
5  Sandf.  610  ;  Hayes  v.  Heyer,  3  Sandf. 
284,  293,  4  Sandf.  Ch.  485;  Wetter  r. 
Schlieper,  4  E.  D.  Smith,  707. 

{q)  See  Gowau  v.  Jeff"ries,  supra,  as  to 
when  the  court  will  take  the  joint  property 
out  of  the  possession  of  the  parties,  l\v  ap- 
])ointing  a  receiver.  See  also  Butchart  i*. 
Dresser,  4  De  G.,  M.  &  G.  542  ;  Geortner 
V.  Trustees,  &c.,  2  Barb  625,  628  ;  Smith 
V.  Jeyes,  4  Beav.  503  ;  Hale  v.  Hale,  4 
Beav.  369. 

(?•)  Blakeney  v.  Dufaur,  15  Beav.  40  ; 
Parkhurst  i-.  Muir,  3  Halst.  Ch.  307.  And 
where  one  partner  thus  has  the  legal  and 
rightful  possession  and  control  of  tlie 
partnership  funds,  the  court  interferes  to 
take  them  out  of  his  hands  with  great  re- 
luctance, and  only  for  cogent  reasons. 
Walker  v.  Trott,  4  Edw.  Ch.  38  :  Drury 
V.  Poberts,  2  M<1.  Ch.  157  ;  "Waters  v. 
Taylor,  15  Ves.  10,  15. 

"(s)  Gowaii  V.  Jeffries,  2  Ashm.  296  ; 
Butchart  v.  Dresser,  4  De  G.,  M.  &G.  542. 


296 


THE   LAW   OF   PARTNERSHIP. 


[CH.  VIII, 


§  220.  Temporary  Receiver  to  Preserve  Business.  —  111  some 
cases  a  receiver  has  been  appointed  to  carry  on  the  business,  in 
order  to  preserve  the  good-will  until  it  can  be  sold.  (^)  And  the 
receiver  appointed  for  this,  or  indeed  for  any  purpose,  sometimes 
continues  to  act  for  a  considerable  time,  as  for  one  or  two  or 
more  years,  (m)  But  the  appointment  is  in  its  nature  a  tempor- 
ary one.  (v)  Courts  sometimes  object  very  strongly  to  a  long 
continuance  of  it,  and  cut  it  short  by  order  of  sale  or  settle- 
ment, (^iv') 

A  difference  must  be  made  in  this  respect,  however.  Where 
the  receiver  is  appointed  to  wind  up  a  concern,  he  generally  holds 
possession  until  a  final  and  completed  settlement ;  and  this  may 
require  a  long  period.  The  receivership  of  insolvent  banks  in 
some  instances  continues  for  years,  and  the  settlement  of  a 
widely  extended  partnership  business  may  require  as  much  time 
as  that  of  any  bank.  But  where  a  receiver  has  only  to  hold 
possession  for  a  definite  purpose,  and  carries  on  the  business  to 
preserve  the  good-will  or  for  any  similar  object,  the  court  will 
hasten  the  completion  of  his  duty  and  the  discharge  of  his 
appointment  as  much  as  they  can  without  doing  harm, 

§  221.    Appointment    of     Receiver    Discretionary    with    Court. — 


Hence,  where  it  appeared  that  each  of  two 
joint  adventurers  was  e<pially  entitled  to 
the  possession  of  the  joint  effects,  and  one 
had  enjoined  the  other  from  receiving  or 
disposing  of  the  same  ;  on  the  application 
of  the  latter,  a  like  injunction  was  granted 
against  the  former,  without  any  proof  of 
insolvency  or  other  special  cause  for  depriv- 
ing him  of  the  control ;  and  on  the  latter's 
motion,  also,  a  receiver  was  api>()inted, 
though  his  original  complaint  contained  no 
prayer  for  a  receiver.  McCracken  i\  VV^are, 
3  Sandf.  688.  If  the  partner  ajiplying 
for  a  receiver  has  the  property  in  his  own 
])ossession,  there  will  generally  be  no 
ground  for  appointing  one.  Smithy.  Lowe, 
1  Edw.  Ch.  33  ;  though,  if  the  defendant 
be  insolvent,  and  persist  in  negotiating 
hills  of  exchange  in  the  partnership  name, 
and  in  applying  the  money  to  his  own  pur- 
poses, a  receiver  may  be  appointed,  Hoff- 
man V.  Duncan,  17  Jur.  825.  Nor  will  a 
right  to  a  receiver  exist  on  the  part  of  a 
partner,  icho  has  practicallif  the  sole  direc. 
tion  of  the  business,  merely  because  the 
other  partner  will  not  co-operate  with 
him.     Roberts  v.  Everhardt,  1  Kay,  148. 


{(■)  Marten  v.  Van  Schaick,  4  Paige, 
479.  In  this  case,  where  the  partnership 
was  in  a  political  newspaper,  the  good-will 
constituted  a  chief  part  of  the  value  of 
the  joint  projterty.  See  Williams  v.  Wil- 
son, 4  Sandf.  Ch.  379. 

(«)  See  Crane  v.  Ford,  Hopkins,  114. 

(v)  Waters  v.  Taylor,  15  Ves.  10  ; 
Const  V.  Harris,  Turner  &  R.  496,  518  ; 
Goodman  v.  Whitcomb,  1  Jac.  &  W.  592  ; 
Marten  v.  Van  Schaick,  4  Paige,  479  ;  Wol- 
bert  V.  Harris,  3  Halst.  Ch.  605. 

(w)  Crane  v.  Ford,  supra,  where,  the 
owners  of  a  steamboat  being  in  litigation, 
a  receiver  had  been  appointed  under 
whom  the  vessel  had  run  for  two  years  ; 
a  third  season  approaching,  and  it  being 
necessary  to  lit  out  the  vessel,  or  to  let 
it  lie  useless,  the  court  thought  it  highly 
inconvenient  and  unfit  that  such  ojwra- 
tions  should  be  conducted  under  its  direc- 
tion for  so  long  a  time,  and  ordered  a  sale. 
A  receiver  appointed  by  the  courts  of  one 
State  has  no  power  to  act  in  a  foreign 
jurisdiction.  Harvey  v.  Varney,  104 
Mass.  436  ;  Booth  v.  Clark,  17  How.  322. 


§  221.] 


OF    THE   REMEDIES   OP   PARTNERS   INTER   SE. 


297 


The  application  for  a  receiver  is  always  addressed  to  the  discre- 
tion of  the  court,  and  is  therefore  answered  very  differently, 
as  the  merits  of  the  case  or  the  objections  to  such  appointment 
affect  the  court,  (a:)  In  England,  it  was  said  in  one  case,  and 
that  a  case  of  embezzlement,  that  a  receiver  would  not  he  ap- 
pointed but  on  the  most  extreme  and  gross  abuse,  because  it 
would  destroy  the  business.  (?/)  This  would  be  a  good  reason 
where  the  appointment  would  have  that  effect,  and  where  a 
closing  of  the  business  is  not  desired,  (z) 

But,  on  the  other  hand,  it  seems  to  be  understood  in  this 
country,  (a)  and  certainly  in  New  York,  (i)  that  whenever  part- 
ners are  wholly  unable  to  agree  among  themselves  as  to  the 
disposition  and  control  of  the  property  and  business,  and  neither 
consents  to  the  possession  and  control  which  the  other  claims  or 
desires,  a  receiver  will  be  appointed  on  application,  almost  as  a 
matter  of  course,  and  as  a  first  step  towards  a  final  settlement 
of  the  affairs  of  the  partnership,  (c) 


(x)  The  discretion  whicli  the  courts 
exercise  in  the  appointment  of  a  receiver 
is  well  illustrated  in  those  cases  where  ex 
parte  applications  are  made.  As  a  general 
rule,  a  receiver  will  not  be  appointed  un- 
til after  the  defendant  has  answered. 
Holden  v.  McMakin,  1  Pars.  Sel.  C'as. 
284  ;  3  Dan.  Ch.  Pr.  (Perkins*  ed.)  1974. 
But  in  urgent  cases,  where  it  appears  to 
the  court  that  the  merits  of  the  case,  as 
shown  by  the  affidavits,  require  the  imme- 
diate appointment  of  a  receiver,  the  court 
may  do  so  upon  the  plaintiff's  motion 
before  answer.  Wilson  v.  Greenwood,  1 
Swanst.  483  ;  Duckworth  v.  TrafFord,  18 
Ves.  283 ;  Gowan  v.  Jeffries,  2  Ashm. 
296  ;  3  Dan.  Ch.  Pr.  (Perkins'  ed.)  1974. 
So  also  it  is  clear  that,  as  a  general  rule, 
a  receiver  ought  not  to  be  appointed  until 
after  notice  to  all  the  interested  parties, 
unless  the  court  can  see  that  delay  would 
work  irreparable  injury  to  some  or  all  of 
the  parties,  when  a  receiver  may  be  ap- 
pointed without  notice.  People  v.  Nor- 
ton, 1  Paige,  17  ;  Williamson  v.  Wilson, 
1  Bland,  418  ;  Gowan  v.  Jeffries,  supra, 
3  Dan.  Ch.  Pr.  (Perkins'  ed.)  1975,  n.;  1 
Barb.  Ch.  Pr.  667,  669  ;  Edw.  on  Re- 
ceivers (Rev.  ed.),  13-16. 

(il)  Oliver  v.  Hamilton,  2  Anst.  453. 

{z)  Waters  v.  Taylor,  15  Ves.  10.  See 
Madgwick  v.  Wimble,  6  Beav.  495. 

(a)  See  Speights  v.  Peters,  9  Gill,  472  ; 


Williamson  v.  Wilson,  1  Bland,  418,  426  ; 
Walker  v.  House,  4  Md.  Ch.  39  ;  Terrell 
V.  Goddard,  18  Ga.  664.  In  Birdsall  v. 
Colie,  2  Stock.  63,  complainant  filed  his 
bill,  praying  a  dissolution  of  partnership, 
an  account,  and  a  receiver.  The  bill 
charged  improper  conduct  on  the  part  of 
the  defendant,  the  partner.  Defendant 
answered,  denying  all  charges  of  improper 
conduct,  &c.  It  was  held,  that  when  a 
partncrshijt  is  dissolved  by  mutual  consent, 
or  determined  by  the  will  of  either  party, 
a  court  of  chancery  will  not,  as  of  course, 
without  any  other  reason,  except  that 
such  is  the  wish  of  one  of  the  parties 
interested,  assume  the  control  of  the  busi- 
ness, and  place  it  in  the  hands  of  a  mere 
stranger.  Otherwise,  if  the  partnership 
is  not  determinable  at  will,  and  the  court 
is  resorted  to  for  the  purpose. 

{b)  Law  V.  Ford,  2  Paige,  310  ;  Mar- 
ten V.  Van  Schaick,  4  Paige,  479  ;  Mc- 
Crackan  v.  Ware,  3  Sandf.  688  ;  Goulding 
V.  Bain,  4  Sandf.  716  ;  Williams  v.  Wil- 
son, 4  Sandf.  Ch.  379  ;  Dunham  v.  Jarvis, 
8  Barb.  88  ;  Wetter  v.  Schlieper,  4  E.  D. 
Smith,  707. 

(c)  Perhaps  the  difference  which  has 
been  supposed  to  exist  between  the  Eng- 
lish and  AmericaTi  law  on  this  point  (see 
Gowan  v.  Jeffries,  2  Ashm.  304)  is  after 
all  rather  seeming  than  real,  and  arises 
rather  from  an  apiiarent  contradiction  in 


298 


THE   LAW   OF   PARTNERSHIP. 


[CH.  VIII. 


Although  one  only  is  acting  partner,  having  the  property  in 
his  possession,  buying  and  selling,  keeping  the  accounts,  <fcc.,  a 
receiver  will  be  appointed  to  take  these  things  out  of  his  hands, 
on  allegation  and  evidence  that  he  abuses  his  powers  or  neglects 
his  duties,  and  in  either  way  importantly  endangers  the  interests 
of  his  copartners,  (t?) 

§  222.  Appointment  of  Partner  as  Receiver.  —  It  is  not  un- 
common for  the  appointment  of  receiver  to  fall  upon  one  of  the 
partners,  (e)  Of  course  this  is  not  done  where  there  are  charges 
and  countercharges,  and  a  conflict  of  interests  and  rights.     But 


the  terms  of  the  rule,  as  it  has  been  laid 
down  by  the  courts  of  the  respective 
countries,  than  fioni  any  substantial  dif- 
ference in  practice.  Waters  v.  Taylor,  15 
Ves.  10,  above  cited,  note  (i>),  was  decided 
upon  its  particular  facts,  the  subject-mat- 
ter of  the  partnership  being  of  a  peculiar 
nature.  And  the  language  of  Chancellor 
Walworth  may  not  be  irreconcilable  with 
that  used  by  the  court  in  Oliver  v. 
Hamilton,  2  Anst.  453,  all  the  circum- 
stances being  taken  into  consideration. 
In  Oliver  v.  Hamilton,  a  partner  applied 
for  a  receiver,  while  the  trade  was  going 
on  ;  and  it  does  not  appear,  from  the  im- 
perfect report  of  the  case  which  we  have, 
that  a  dissolution  of  the  partnership  was 
either  asked  for  or  desired.  If  it  was  not, 
then  it  was  a  case,  where,  as  we  have  seen 
{ante,  §  218),  the  court  always  interferes 
with  great  reluctance,  both  from  a  regard 
to  the  interests  of  the  parties,  and  be- 
cause it  is  no  part  of  its  i)roper  jurisdic- 
tion to  assume  for  an  indefinite  period 
and  purpose  the  carrying  on  of  trade. 
On  the  other  hand,  in  Law  v.  Ford,  2 
Paige,  310,  and  Marten  v.  Van  Schaick,  4 
Paige,  479,  the  leading  New  York  cases 
on  the  subject,  a  receiver  was  asked  for  to 
wind  up  the  affairs  of  the  partnership,  a 
dissolution  having  already  taken  place,  or 
being  desired  of  the  court.  But  where 
there  is  a  dissolution,  then,  both  in  Eng- 
land and  the  United  States,  any  substan- 
tial wrong  done  or  threatened  to  the  joint 
interests  is  sufficient  ground  for  the  ap- 
pointment of  a  receiver.  And  in  neither 
country  will  a  receiver  be  granted  for 
slight  reasons,  merely  because  there  is  an 
apprehension  of  danger  or  loss,  or  because 
partners  quarrel. 

(d)  Jeffreys   v.    Smith,    1   Jac.    &   W. 


298  ;  Crawshay  v.  Maule,  1  Swanst.  495  ; 
Bentley  v.  Bates,  4  Younge  &  C.  182  ; 
Winget  V.  Heathcote,  cited  id.  187  ;  Hart 
V.  Clark,  19  Beav.  349;  Sheppard  v.  Oxen- 
ford,  1  Kay  &  J.  491.  See  Roberts  v.  Eber- 
hardt,  1  Kay,  148 ;  Norway  v.  Rowe,  19 
Ves.  144  ;  Christian  v.  Lenhouse,  cited 
19  Ves.  157,  159. 

(e)  Wilson  v.  Greenwood,  1  Swanst. 
471,  484  ;  Waters  v.  Taylor,  2  Ves.  &  B. 
299,  306  ;  Jeffreys  v.  Smith,  1  Jac.  &  W. 
298  ;  Ex  parte  Stoveld,  1  Glyn  &  J.  303, 
307  ;  Blakeney  v.  Dufaur,  15  Beav.  40  ; 
Brenan  v.  Preston,  2  De  G.,  M.  &  G.  813; 
Hoffman  v.  Duncan,  18  Jur.  69.  In 
Hubbard  v.  Guild,  1  Duer,  662,  the  court 
expressed  the  opinion,  "  that,  in  all  cases 
where  the  dissolution  of  a  partnership  is 
occasioned  solely  by  the  insolvency  of 
one  of  the  partners,  the  solvent  partner 
ought  to  be  appointed  receiver,  when  his 
capacity  and  integrity  are  unquestioned." 
See  Freeland  v.  Stansfield,  16  Jur.  792. 
And,  in  the  appointment  of  a  receiver, 
the  recommendations  of  those  most  inter- 
ested, and  who  are  most  likely  to  sustain 
injury  without  one,  will  generally  be  most 
regarded.  The  being  a  near  relation  of 
either  party  is  not  in  itself  an  absolute 
disqualification;  but  it  must  be  allowed  to 
have  its  weight  when  connected  with 
other  circumstances.  Williamson  v.  Wil- 
son, 1  Bland,  418,  427.  The  general  rule, 
however,  is,  that  no  person  should  be 
appointed  a  receiver  who  is  a  party  to  the 
cause,  and  not  wholly  disinterested  in  the 
subject-matter  of  the  suit.  3  Dan.  Ch. 
Pr.  (Perkins'  ed.)  1971;  Edw.  on  Re- 
ceivers (Rev.  ed.),  473.  And  though 
generally,  by  the  order  of  the  court  di- 
recting the  appointment,  a  proper  salary 
is  directed  to  be  allowed  the  receiver,  yet, 


§  222.]  OF   THE   REMEDIES   OF   PARTNERS    INTER   SE.  299 

where  a  partner  prays  for  a  receiver,  and  the  other  partner  makes 
no  suggestion  of  wrong  against  the  plaintiff,  or  of  mischief  which 
would  arise  from  his  receiving  the  appointment,  there  are  many 
obvious  reasons  for  giving  it  to  him.  No  one  knows  or  ought 
to  know  as  wel  as  he  the  condition  of  the  partnership,  and 
what  measures  are  required  to  preserve  or  promote  its  interests. 
Indeed,  his  relation  to  the  firm  affords  the  strongest  reasons 
for  appointing  him,  unless  there  grow  out  of  the  same  relation 
stronger  reasons  against  the  appointment. 

In  one  case  where  a  partner  thus  appointed  used  the  money  of 
the  partnership  in  his  own  business  and  made  profits,  the  other 
partner  was  not  permitted  to  have  a  share  of  them.  (/)  It 
would  seem  that  an  extraordinary  indulgence  was  granted  to  the 
receiver  in  that  case.  Still  the  case  is  not  quite  similar  to  those 
in  which  a  partner,  in  wrong  of  the  firm,  makes  money  out  of  a 
business  which  belongs  to  it,  or  to  those  in  which  a  surviving 
partner  who  by  law  takes  all  the  effects  and  has  all  the  power  of 
the  partnership,  but  only  for  the  purpose  of  settlement,  and  then 
continues  the  business  for  his  own  profit.  (^)  Where  a  partner 
is  receiver  to  hold  the  property  and  business,  if  he  has  money  of 
the  firm  in  hand,  he  may  earn  interest  upon  it  on ,  his  own 
responsibility  (unless  prohibited  or  otherwise  directed  by  the 
decree),  and,  as  the  partnership  may  charge  him  with  the  money 
and  with  the  interest,  and  is  not  liable  for  any  loss  of  it,  it  is 
enough  if  he  allows  full  interest ;  always  providing  nothing  in 
the  character  of  the  case  or  in  the  appointment  makes  this  use 
of  the  money  illegal.  (A) 

If  a  surviving  partner  abuses  his  power,  and  the  representa- 
tives of  the  deceased  apply  for  a  receiver,  the  same  principles 
and  rules  would  be  applied  as  in  any  case  in  which  one  of  the 
partners  who  has  a  rightful  possession  and  management  makes 
a  wrongful  use  of  his  possession,  (i)      If  equal  protection   can 

If  he   is  an    interested   party,    namely,   a  and  well-established  principles  which  reg- 

partner,  where  the  suit  is  between  part-  ulate    the   conduct  and    liabilities  of   re- 

ners,  he  will  not  be  permitted  to  have  any  ceivers.      We    have    already    seen    that, 

salary  or   emolument.      3    Dan.    Ch.    Pr.  when  a  person  is  himself  interested  in  the 

(Perkins'    ed.)    1972,     1976,    1984.      See  subject-matter  over  which  he  has  control 

cases  cited  supra,  in  this  note.     [Berry  v.  as  receiver,  he  will  not  usually  be  allowed 

•Tones,  11  Heisk.  206.]  to  derive  any  benefit  or  emolument  from 

(/)  Whitesides  v.  Lafferty,  3  Humph,  his  position.     And  see  Edw.  on  Receivers 

150.  (Rev.     ed.),     pp.     573,     596;     and    the 

(f/)  Jnte,  §  219,  note  (/>).  remarks  of  Lord  Eldon,  there  quoted,  in 

{h)  Whitesides  v.  Latterty,  3  Humph.  Shaw  v.  Rhodes,  2  Russ.  539. 

150.     It   may  well    be   doubted   whether  (/)     Wilson  v.  Greenwood,   1  Swanst. 

this  case   is   consistent  with  the  general  480  ;  Crawshay  v.  Maule,  1  Swanst.  507  ; 


300  THE   LAW   OF   PARTNERSHIP.  [CH.  VIII. 

be  given  to  the  representatives  of  the  deceased,  by  requiring 
security  from  the  surviving  partner,  that  order  may  issue  instead 
of  the  appointment  of  a  receiver ;(/)  but  not  necessarily,  {k} 
If  the  surviving  partner  insists  upon  carrying  on  the  business, 
and  employing  therein  the  assets  of  the  deceased,  the  court  will 
interfere,  and  appoint  a  receiver,  if  that  seems  to  be  the  best 
remedy,  (l)  Where  all  the  partners  are  dead,  upon  a  suit  between 
their  representatives  a  receiver  will  be  appointed,  almost  as  a 
matter  of  course.  (??i) 

§  223.  Practice  on  Appointment  of  Receiver.  —  An  injunction 
is  sometimes  granted,  or  a  receiver  appointed  by  the  court  directly 
on  application  and  affidavits.  Where  the  parties  agree  to  the 
person,  there  can  be  no  objection  to  this.  The  English  rule  is, 
to  refer  the  case  to  a  master,  who  will  make  an  appointment, 
after  a  hearing  of  both  parties,  if  they  wish  to  be  heard,  and 
will  report  his  appointment  to  the  court  for  confirmation,  unless 
that  be  waived  or  is  obviously  unnecessary,  (w)  And  this  we  think 
the  safer  practice,  and  suppose  it  to  be  frequently  adopted  in  this 
country,  (o) 

§  224.  Powers  and  Duties  of  Receiver.  —  The  powers  and 
duties  of  a  receiver,  when  appointed  in  a  suit  between  partners, 
are  essentially  the  same  as  when  he  is  appointed  pending  a  con- 

Gratz  V.  Baj-ard,  11  S.  &  E.  41,  48  ;  there  is  a  copartnership,  there  is  a  con- 
Walker  V.  House,  4  Md.  Ch.  39  ;  Jacquin  fidence  between  the  parties,  and,  if  the 
V.  Buisson,  11  How.  Pr.  385,  394  ;  Collins  one  dies,  the  confidence  remains,  and  he 
«.  Yonng,  1  Macq.  385  ;  Clegg  t?.  Fish  wick,  shall  receive;    but,  when  both  are  dead, 

1  McN.  &  G.  294.  See  Hartz  v.  Schrader,  there  is  no  confidence  between  the  repre- 
8  Ves.  317  ;  Evans  v.  Evans,  9  Paige,  sentatives,  and,  therefore,  the  court  will 
178  ;  Renton  v.  Chaplain,  1  Stock.  62,  appoint  a  receiver."  Walker  v.  House,  4 
70  ;  Hubbard  v.  Guild.  1  Duer,  662.  Md.  Ch.  39,  43. 

ij)  Estwick    V.   Conningsby,    1   Vern.  (?i)  The  master's  judgment  as  to  the 

118  ;     Higginson  v.  Air,   1    Desaus.  427,  proper  person   is   never   disturbed,  unles.s 

429.  some  substantial  objection  be  shown.     If 

(k)  In  Law  v.  Ford,  2  Paige,  310,  such  objection  be  shown,  the  court  will 
where  the  suit  was  between  living  part-  then  refer  it  back  to  the  master  to  review 
ners,  a  receiver  was  appointed,  notwith-  his  report.  3  Dan.  Ch.  Pr.  (Perkins' ed.) 
standing  that  the  partner  who  was  in  1976,  1979,  1981  ;  Edw.  on  Receivers 
possession  of  the  partnership  books  and  (Rev.  ed. ),  ch.  4,  yip.  95,  96.  See  Lot- 
effects  was  willing  to  give  security  for  the  timer  v.  Lord,  4  E.  D.  Smith,  183  ;  1 
faithful  application  of  the  effects  in  pay-  Barb.  Ch.  Pr.  669,  673. 
ment  of  the  debts.  (o)   In  some  of  the  States,  as  it  seems, 

(/)  Madgwick  v.  Wimble,  6  Beav.  495  ;  the    court,    without    any    reference,    will 

Clegg  V.   Fishwick,    1   McN.   &   G.   294  ;  directly  receive  and  act  upon  the  nomina- 

Walker  v.  House,  4  Md.  Ch.  39.  tions  of  the   parties    of  suitable    ])ersons 

(m)  The  ground   of   the   appointment  for    receiver.     William.son  v.    Wilson,     1 

of  a  receiver  in  such  a  case  is  thus  stated  Bland,   418,    427  ;    Go  wan    v.   Jeffries,   2 

by  Lord  Kenyon,  in  Phillips  v.  Atkinson,  Ashm.  296,  307. 

2  Bro.  C.  C.  (Perkins*  ed.)  272  :  "  Where 


§  224.]  OF   THE   REMEDIES   OF   PARTNERS   INTER   SE.  301 

troversy  between  other  parties.  He  is  always  the  officer  of  the 
court,  and,  as  such,  takes  into  his  possession  the  partnership 
property,  {p)  receives  the  issues  and  avails  thereof,  and  is  bound 
to  account  for  such  receipts  whenever  the  court  requires,  {q) 
Not  un frequently  he  not  only  receives  and  gets  in  outstanding 
funds,  but  also  superintends  and  carries  on  the  partnership 
business,  (r) 

The  rules  by  which  the  receiver  is  to  govern  his  action  in  any 
given  instance,  and  the  methods  or  principles  by  which,  in  each 
particular  case,  he  is  to  manage  and  carry  on  the  partnership 
business  and  collect  and  receive  and  dispose  of  its  funds,  cannot 
be  described  in  general  terms.  They  are,  for  the  most  part, 
dependent  upon  the  decree  appointing  him  ;  in  which  his  powers 
and  duties  are  generally  defined  and  enumerated  with  much 
minuteness.  («) 

By  the  same  decree,  partners  or  other  persons  who  have  done 
or  are  supposed  to  threaten  wrong,  are  usually  restrained  from 
any  acts  which  would  interfere  with  the  duties  of  the  receiver,  or 
in  any  way  render  the  appointment  less  useful  and  effectual,  (f) 
In  England,  we  believe,  the  receiver  is  not  authorized  to  bring 
suits  at   law  or  in   equity,  unless  merely   to  collect  debts,  and 

(p)  The   general   principle   as  to    the  418,  435,  436;    Walker  v.  House,   4  Md. 

property   which    the    receiver   will    take  Ch.  39,  51. 

into  possession,  by  virtue  of  his  appoint-  (r)  Ante,  §  220,  and  notes  ;    3   Dan. 

nient,   is   that   he  will   assume   not  only  Ch.  Pr.   (Perkins'  ed.)  2006.     In  the  case 

everything  liable  to  be    taken  under   an  of  Banks  v.  Gould,  decided  by  Chancellor 

execution  at  law,  but  also  everything  that  Kent,  and   cited    in    Edw.    on    Receivers 

is  considered  in  equity  as  assets.     3  Dan.  (Rev.  ed. ),  316,  et  seq.,  inasmuch  as  the 

Ch.    Pr.    (Perkins'    ed.)  1970;    Edw.   on  firm     had    two     establishments,    one    at 

Receivers  (Rev.  ed.),  6.     Hence,  the  re-  Albany  and  the  other  in  New  York,  two 

ceiver  of  a  partnership  will  take,  as  part  receivers    were     appointed.      The    writer 

of  the  assets  of  the  tirm,  real  estate  held  above    cited    remarks,    however,    that    it 

in    severalty   by  the    different    partners,  may  be   a   question   whether  the   course 

but   purchased  and  used  for  partnership  should  not  have  been  to  have   had  one 

purposes,    and    paid    for    with    partner-  receiver,  with  liberty  to  appoint  an  agent, 

ship  funds.     Smith   v.  Danvers,  5  Sandf.  See    cases    cited    in   Edw.    on   Receivers 

669.  (Rev.  ed.),  324. 

[q)  2  Story  Eq.  §§  831-833  ;    3  Dan.  (s)  Smith  on  Receivers,  186  ;  2  Story 

Ch.  Pr.  (Parkins'  ed.)  1949,  1976,   1977  ;  Eq.  §  833  ;  3  Dan.  Ch.  Pr.   (Perkins'  ed.) 

Wolbert  v.  Harris,  3  Halst.  Ch.  605,  622.  1987,    1988  ;    Edw.    on   Receivers    (Rev. 

A  receiver  appointed    in    a    partnership  ed. ),  5.     See  Skip  v.  Harwood,  where  a 

suit,    even   without    any    formal    assign-  receiver  was  appointed  for  a  brewery,   3 

ment,    becomes  trustee  of   the  assets  for  Dan.   Ch.   Pr.  (Perkins' ed.)   1968,  note; 

all  the    firm    creditors ;    and,    while   this  1  Dick.  114. 

trust  continues,  one  partner  cannot  give  a  (t)  See  siqjra,  Skip  v.  Harwood  ;    and, 

preference,  nor  can  a  creditor  gain  one  by  for  a  general  form  of  the  decree  appoint- 

judgment.      Edw.     on    Receivers    (Rev.  ing  a  receiver  of  a  partnership,  Edw.  on 

ed.),  341;    Waring  v.  Robinson,  1  Hoff.  Receivers  (Rev.   ed.),   341.     See  also  Se- 

Ch.  524  ;  Williamson  v.  Wilson,  1  Bland,  ton's  Decrees,  323. 


302  THE   LAW   OF   PARTNERSHIP.  [CH.  7III. 

not  always  for  that.  (?<)  But  in  this  country  the  power  is  fre- 
quently, not  to  say  generally,  given  to  him,  to  bring  any  actions 
necessary  for  the  proper  discharge  of  his  duties,  (u)  and  provision 
is  made  for  the  indemnilication,  out  of  the  effects  in  his  hands, 
of  those  in  whose  names  he  brings  such  actions,  {iv) 

§  225.  Torts  between  Partners.  — Pleadings  in  equity,  in  a  suit 
between  partners,  would  be  more  properly  considered  in  a  treatise 
on  Chancery  Practice  and  Pleading.  Little  variation  from  the 
ordinary  rules  and  practice  seems  to  be  required  by  the  fact  that 
the  cause  of  action  between  the  parties  arises  from  their  relation 
as  copartners.  Some  points,  which  might  be  considered  under  this 
head,  are  treated  of  under  the  particular  topics  with  which  they 
seem  to  be  more  particularly  connected.  Thus,  in  the  chapter  on 
Account,  we  shall  endeavor  to  show  who  may  file  a  bill  for  an 
account,  who  must  be  made  parties,  and  what  pleas  are  held  to  be 
a  good  bar  to  such  a  bill,  and  equity  topics  are  discussed  in  other 
places.  Here,  therefore,  we  will  only  add,  that,  if  the  fact  of  the 
partnership  is  disputed  in  a  suit  inequity  purporting  to  be  between 
partners,  a  court  of  equity  may  direct  an  issue  to  ascertain  the 
truth  ;  (a;)  and,  it  seems,  may  even  order  that  the  parties  them- 
selves be  examined  at  the  trial,  (t/)  But  such  an  issue  will  not  be 
directed,  unless  the  point  is  very  doubtful,  (z) 

So  far  as  there  are  personal  torts,  they  can  hardly  have  any 
relation  to  the  partnership ;  and  neither  party  can  be  affected  in 
right,  obligation,  or  remedy,  by  the  fact  that  he  is  a  partner,  (a) 

{u)  Estwick    V.   Conningsb)',  1  Vern.  the  issue  directed  to  be  tried  was  whether 

118  ;    Dacie  v.  John,  McClelaud,  575  ;    2  a  party  was  a  real  or  a  nominal  partner. 
Story  Eq.  §§  833,834;    Seton's   Decrees,  (y)  De  Tastet  r.  Bordenave,  Jac.  516. 

323.  But  see,   on   this  point,    2  Dan.  Ch.  Pr. 
(i')  See  the  remarks  of  Ames,  C.  J.,  in  (Perkins'  ed.)  1298. 

Tillinghast  r.  Champlin,  4  R.  I.  173,  188.  (z)  Forster  v.  Hale,  5  Ves.  308,   322; 

See  Iddings  v.   Bruen,  4  Sandf.  Ch.  417,  Metcalf  v.  Ro}'al  Exchange  Ass.  Co.,  Bar- 

422  ;    Green   v.    Bostwick,  1  Sandf.   Ch,  nard.  343.     As  to  the  constitutional  right 

185,  186.  which  citizens  may  have,  in  the  different 

(w)  3    Dan.    Ch.    Pr.    (Perkins'    ed.)  States,  to  have  matters  of  fact,  alleged  in 

1977,    1991;    Edw.    on    Receivers    (Rev.  the  bill  and  denied  by  the  answer,  tried  by 

ed.),  136,  342,  343;  Seton's  Decrees,  323,  a  jury,   see    Sedgwick  Const.  Law,   542- 

324.  A  receiver  cannot  maintain  an  ac-  548  ;  2  Dan.  Ch.  Pr.  1289,  note  (1)  ; 
tion  of  trover,  in  his  own  name,  for  part-  Adams  Eq.    [376],    815,   note. 

nership  effects  converted  before    his   ap-  (a)  Where    one    partner,   by   violence, 

pointnient ;  he  must  sue  in  the  name  of  forces  his   copartner  out  of  the  business 

the  firm.     Yeager  v.  Wallace,  44  Pa.  294.  premises  of  the  firm,  and  threatens  such 

{x)  Peacock  v.    Peacock,  16  Ves.   49;  copartner  with  violence  and  danger  to  his 

Ex  parte  Langdale,  18  Ves.  300  ;  Binford  life,  if  the  latter  should  venture  again  to 

V.    Dommett,   4   Ves.    756  ;    Jacobsen   v.  enter  the  premises,  and  it  is  necessary  for 

Hennekenius,  5  Bro.  P.  C.  482,  1  Bro.  P.  such  copartner  to  enter  and  use  the  prem- 

C.   (Dublin  ed. )  432.      In  this  last  case,  ises  for  the  purposes  of  carrying  on   his 


§  226.] 


OF   THE   REMEDIES    OF   PARTNERS   INTER   SE. 


303 


Of  torts  in  relation  to  the  partnership  or  its  property,  nearly  all 
will  be  comprehended  either  in  fraud  or  waste  ;  for  both  of  which 
the  remedy  in  equity  is  promi)t  and  efficacious,  (b)  as  we  have 
already  seen.^ 

§  226.    Conversion  by  Partner  of  Firm  Property.  —  Some  question 

may  exist  whether  the  rules  of  law,  in  cases  of  tenancy  in  common, 
do  not  apply  in  this  respect  to  cases  of  partnership.  A  tenant  in 
common  may  maintain  trover  against  a  cotenantfor  a  destruction, 
total  or  partial,  of  the  common  property  by  him.  (c)  It  has  been 
held,  that  a  sale  of  the  whole,  without  authority,  may  be  regarded 
as  such  destruction,  (d)     But  no  tenant  in  common  can  maintain 


ordinary  business  as  partner,  the  court 
will  permit  the  latter  to  exhibit  articles  of 
peace  against  the  former.  Regina  v.  Mal- 
linson,  16  Q.  B.  367. 

(b)  The  plaintiff  and  defendant  were 
partners  ;  and  it  appeared,  by  the  com- 
plaint, that  the  action  was  brought  to 
recover  damages  for  the  fraudulent  removal 
by  the  defendant  of  a  stock  of  goods  be- 
longing to  the  firm  An  order  of  arrest 
was  applied  for  upon  affidavits  setting 
forth  the  fraud.  Duer,  J.,  refused  to 
grant  the  order  ;  holding  that  the  action 
was  not  maintainable,  and  that  the  plain- 
titf  had  no  proper  remedy  but  in  a  suit  for 
an  injunction  and  a  receiver.  Approved 
by  the  court  in  Gary  v.  Williams,  1  Duer, 
667. 

(c)  Buller,  N.  P.  34  ;  2  Saund.  on  PI. 
&  Ev.  1163  ;  Cowan  v.  Burgess,  Cooke, 
58  ;  Seldon  v.  Hickock,  2  Caines,  167  ; 
Tubbs  V.  Richardson,  6  Vt.  442  ;  Hurd  v. 
Darling,  14  Vt.  214  ;  Herrin  v.  Eaton,  13 
Me.  193  ;  Guyther  v.  Pettijohn,  6  Ired. 
388. 

(d)  The  doctrine,  as  at  present  settled 
by  the  English  authorities,  is,  that  the  mere 
sale  of  a  chattel  by  one  of  two  tenants  in 
common  is  not  a  conversion  for  which  his 
cotenant   can  maintain  trover.     The  dis- 


position  of  the  chattel  must  be  such  as 
amounts  to  a  destruction  of  it.     See  May- 
hew  V.  Herrick,  7  C.  13.  229.    In  this  case, 
the   point  was  elaborately  discussed,  and 
all  the  leading  authorities  reviewed.     See 
Higgius  V.  Thomas,  8  Q.  B.  908  ;  Barton 
V.  Williams,  5  B.  &  Aid.  395,  402,  403  ; 
Farrar  v.  Beswick,  1  il.  &  W\  685,  688  ; 
Jackson  v.  Anderson,  4  Taunt.  24  ;  Fen- 
nings  V.  Grenville,  1  Taunt.  241 ;  Heath 
V.  Hubbard,  4  East,   110  ;  Graves  v.  Saw- 
cer,  T.  Raym.  15  ;  1  Chitty  P.  C.  90,   91, 
179,  note  ;  2  Saund.  PI.  &  Ev.  (5th  Am. 
ed.)    pt.    2,    1164,    1166,    1168.     In    this 
country,  the  rule  has  been  frequently  laid 
down,  without  qualification,  that  a  tenant 
in  common  may  bring  trover  against  his 
cotenant,  for  a  conversion,  by  a  sale,  of  the 
entire  property  held  in  common.     Wilson 
V.  Reed,  3  Johns.  175;  Hyde  v.  Stone,  9 
Cowen,  230,  7  Wend.  354  ;  Tyler  v.  Taylor, 
8  Barb.  585  ;  Farr  v.  Smith,  9  Wt-nd.  338  ; 
White  V.  Osborne,  21  W'end.  72  ;  Odiorne 
V.  Lyford,  9  N.  H.  511  ;  White  v.  Phelps, 
12  N.  H.  386  ;  Thomson  v.  Cook,  2  South. 
580 ;    Weld    v.    Oliver,    21    Pick.    559 ; 
Starnes  v.  Quin,  6  Ga.  84  ;  Rains  v.   Mc- 
Nairy,  4  Humph.  356  ;  Smyth  u.  Tankers- 
ley,  20  Ala.  212  ;  Perminter  v.   Kelly,   18 
Ala.  716  ;  Cowles  v.  Garrett,  30  Ala.  341. 


1  It  was  held  in  Mills  v.  Fellows,  30  La.  Ann.  824,  that  one  partner  cannot  bring 
an  action  against  his  copartner  for  an  injury  to  the  business  caused  by  the  debauchery 
and  bad  habits  of  the  latter.  It  is  a  good  ground  for  dissolution  ;  but  if  the  partners 
continue  the  business,  and  the  wrongdoing  is  thus  in  a  sense  condoned,  the  court  will 
not  bring  the  scandal  to  light.  In  Boughner  v.  Black,  83  Ky.  521,  however,  it  was 
held  that  where  A.  sold  an  interest  in  his  business  to  B.,  and  now  sued  on  a  note  given 
in  payment,  B.  might  recoup  damages  suffered  from  the  fraudulent  acts  of  A.  in  the 
course  ol  the  firm  business,  whereby  the  good-will  and  credit  of  the  firm  were  damaged  : 
since  that  is  a  cause  of  action  for  a  partner. 


304 


THE   LAW   OF    PARTNERSHIP. 


[CH.  VIII. 


trover  grounded  on  the  mere  possession  of  his  cotenant,  however 
exclusive  this  cotenant  insists  upon  making  it,  for  the  technical 
reason  that  each  tenant  in  common  is  entitled  to  the  possession  of 
the  property,  (e)  Nor  should  we  think  that  trover  would  lie  by  a 
partner,  against  his  copartner,  for  constructive  destruction  by  a 
sale  of  the  whole  thing,  because,  by  the  law  of  partnership,  a  part- 
ner has  this  power  of  sale.  (/)  Nor  should  we  think  it  would  lie 
in  general  for  the  actual  destruction  of  a  thing  by  a  copartner. 
For,  although  a  partner  has  no  legal  right  to  destroy  anytliing, — 
unless  by  possibility  even  that  sliould  be  fairly  incident  to  the 
business  of  the  partnership,  —  yet,  if  he  does  destroy  it,  this  might 
be  taken  as  an  appropriation  by  him,  to  be  charged  to  him  on 
account ;  and  this  charge  would  then  be  settled  like  others,  only 
by  a  settlement  of  accounts.^ 

It  has  been  held  in  this  country,  that  detinue  may  be  maintained 
by  a  surviving  partner  against  the  representatives  of  a  deceased 
partner,  for  the  books  of  account  of  the  firm  ;  (^)  and  there  is  a 


See,  however,  Tubbs  v.  Richardson,  6  Vt. 
442  ;  Sanborn  v.  Merrill,  15  Vt.  700  ;  Pitt 
V.  Petwa}-,  12  Ired.  69.  Perhaps,  however, 
notwithstanding  the  language  of  some 
cases,  and  the  actual  adjudication  in 
others,  the  rule  in  this  country  is,  after 
all,  to  be  considered  as  substantially  the 
same  with  the  English  rule.  That  is,  in 
both  countries,  a  sale  of  the  common  prop- 
erty by  one  cotenant  may  be  per  se  a  con- 
version, —  is  always  admissible  evidence  of 
it,  —  but  is  not  necessarily  a  conversion 
upon  which  trover  may  be  founded,  unless 
it  is  tantamount  to  a  destruction  of  the 
subject  of  the  tenancy.  See  St.  John  u. 
Standring,  2  Johns.  468  ;  Mersereau  v. 
Norton,  15  Johns.  179  ;  Bell  v.  Lagmans, 
1  Monroe,  40  ;  Hinds  v.  Terry,  Walker, 
80. 

(e)  Co.  Litt.  200  ;  Buller  N.  P.  34  ; 
1  Salk.  290  ;  Holliday  v.  Cam  sell,  1  T.  R. 
658  ;  Fennings  v.  Grenville,  1  Taunt.  241  ; 
St.  John  V.  Standring,  2  Johns.  468  ; 
Mersereau  v.  Norton,  15  Johns.  179  ; 
Gilbert  v.  Dickerson,  7  Wend.  449  ;  Tyler 
V.  Taylor,  8  Barb.  585  ;  Weld  v.  Oliver,  21 
Pick."  559,  562 ;  Cole  v.  Terry,  2  Dev.  & 
B.    252  ;  Fightmaster  v.  Beaslj',  7  J.   J. 


Marsh.  415  ;  Dainu.  Cowing,  22  Me.  347  ; 
Weeks  v.  Weeks,  5  Ired.  Eq.  Ill,  119. 
See  Lowe  v.  Miller,  3  Gratt.  205 ;  Agnew 
V.  Johnson,  17  Pa.  373.  In  Illinois,  the 
common-law  rule  is  so  far  modified  by  stat- 
ute as  to  allow  one  tenant  in  common  to 
support  trover  against  a  cotenant  who 
assumes  exclusive  control  over  the  joint 
property.  Benjamin  v.  Stremple,  13  111. 
466.     See  2  111.  .Stat.  (1863)  960. 

The  general  principle  holds  after  the 
bankruptcy  of  a  partner,  and  his  assignees 
cannot  maintain  trover  against  the  other 
partners,  their  representatives,  or  assigns. 
Fox  V.  Hanbury,  Cowp.  445 ;  Smith  v. 
Stokes,  1  East,  363;  Smith  v.  Oriell,  1 
East,  368  ;  Salomons  v.  Nissen,  2  T.  R. 
674,  682. 

(/)  Montjoys  v.  Holden,  Litt.  Sel.  Cas- 
447  ;  Hyde  v.  Stone,  9  Cowen,  230.  See 
Furlong  v.  Bartlett,  21  Pick.  401  ;  Wilson 
V.  Reed,  3  Johiis.  175,  178. 

(g)  Murray  v.  Mumford,  6  Cow.  441. 
The  ground  taken  by  the  court  in  this  case 
was,  that  a  dissolution  of  a  partnership  did 
not,  ipso  facto,  destroy  the  joint  tenancy 
of  the  partners  in  the  partnership  property, 
and  create  a  tenancy  in  common,  but  the 


1  But  where  the  individual  property  of  one  partner,  used  in  the  business,  was  de- 
stroyed by  the  negligence  of  the  other  partner,  the  owner  may  sue  his  copartner  at  law 
for  the  destruction.     Newby  v.  Harrell,  99  N.  C.  149,  5  S.  E.  284. 


§  £28.]  OF    THE    REMEDIES    OF    PARTNERS    INTER    SE.  305 

similar,  thoiiofh  perhaps  not  quite  an  equal,  reason  for  allowing 
the  same  action,  by  a  partner,  against  a  partner  who  keeps  wrong- 
ful possession  of  the  books.  We  deem  the  reason  insufficient  in 
both  cases,  and  the  remedy  itself  unnecessary.  Indeed,  detinue 
is  almost  wholly  disused.  And  the  remedies  of  equity  are  so  com- 
pletely adequate,  wherever  a  partner  is  injured  by  the  wrong-doing 
of  his  copartner  in  matters  relating  to  the  partnership,  that  we 
doubt  whether  any  resort  to  law  in  such  cases  can  be  necessary, 
or  will  be  sanctioned  l)y  the  courts. 

§  227.  Fraud  inducing  Entrance  into  Partnership.  —  [One  who  has 
been  induced  to  enter  into  a  partnership  by  the  false  represen- 
tations of  his  copartner  may  maintain  an  action  at  law  for  the 
deceit.^  The  measure  of  damages  is  the  net  amount  of  money 
he  has  paid  in,  and  compensation  for  his  time.^ 

He  may  also  maintain  a  bill  to  rescind  the  partnership  agree- 
ment. He  will  then  be  entitled  to  a  restitution  in  integrum  by 
the  allowance  of  damages  or  otherwise,  to  an  injunction  against 
the  use  of  his  name  as  partner,  and  to  an  indemnity  against  the 
firm  debts.3] 

§  228.  Statute  of  Limitations  between  Partners.  —  The  statute  of 
limitations  begins  to  run  at  the  death  of  a  partner,  in  favor  of  his 
personal  representatives  against  a  claim  to  have  an  account  of 
profits  received  by  him.  (//?/)  * 

partnership  continueil,  for  the  purpose  of  take  in  settlement  at  the  time  of  dissolu- 

settling  the  partnership  affairs  ;    that,  in  tion,  is  demurrable  for  non-joinder  of  the 

case  of  dissolution  by  death,  the  surviving  other  two.  .Johnston  v.  Freer,  51  Ga.  313. 
partner  was  entitled  to  all  the  choses  in  (yy)  Weisman  v.  Smith,  6  Jones,   Eq. 

action,  and  other  evidences  of  debt  belong-  124.     Partners  inter  sese  hold  partnership 

ing  to  the  firm,  and  was  entitled  to  the  effects   for  each  other   under  an   implied 

exclusive   custody  and  control  of  them  ;  trust ;  and  the  statute  of  limitations  rests 

that  the  books  of  account  were  incidents  to  upon  their  respective  claims  against  each 

the  debts  or  choses  in  action  ;  and  that  other,  in  this  regard,  and  begins  to  run  on 

whoever  was  entitled  to  the  one  was,  of  the  occurrence  of  a  breach  of  trust ;  and, 

course,  to  the  other.     See  Clowes  v.  Haw-  when  one  is  to   collect  and  pay  over  the 

ley,  12  Johns.  487.     A  bill  in  equity  by  funds,  the  statute  is  not  set  in  motion  till 

one  copartner,  against  one  of  three  other  there  is  a  failure  in  the  performance  of  that 

copartners,  to  recover  his  share  of  a  sum  of  duty.     Condrey  v.  Gilliam,  60  Mo.  86. 
money  obtained  by  the  otlier  three  by  mis- 

1  Baldey  v.  Brackenridge,  39  La.  Ann.  660,  2  So.  410  ;  Hale  v.  Wilson,  112  Mass. 
444. 

2  Mycock  V.  Beatson,  13  Ch.  D.  384  ;  Richards  i;.  Todd,  127  Mass.  167. 

8  Newbigging  v.  Adam,  34  Ch.  D.  582  (C.  A.)  ;  Oteri  v.  Sealzo,  145  TJ.  S.  578  ; 
Smith  V.  Everett,  126  Mass.  304  ;  Andriessen's  Appeal,  123  Pa.  303,  16  Atl.  840. 

*  Statute  of  Limitntions  :  —  The  statute  of  limitations  may  be  a  bar  to  the  claim  of 
one  partner  against  another.  As  the  ordinary  renied\-  of  one  partner  against  another  is 
in  equity,  the  defence  to  a  bill  for  an  accounting  is  strictly  not  the  statute  of  limita- 

20 


306  THE    LAW    OF    PARTNERSHIP.  [CH.    VIII. 

tions,  but  laclies  or  lapse  of  time.  Philippi  v.  Pliilip]n,  61  Ala.  41.  Where  the  part- 
nership articles  are  under  seal,  and  secure  the  right  to  an  account,  the  right  will  not 
be  barred  until  the  period  of  limitations  for  sealed  instruments  has  elapsed.  Near  v. 
Lowe,  49  Mich.  482,   13  N.  W.  825. 

In  Illinois  the  statute  of  limitations  begins  to  run  against  a  partner's  claim  from  the 
time  of  dissolution.  Pierce  i\  McClellaii,  93  111.  245  ;  Askew  v.  Springer,  111  111.  662  ; 
Blake  v.  Sweeting,  121  111.  67,  12  N.  E.  67  ;  Bonney  v.  Stoughton,  122  111.  536,  13 
N.  E.  833.  Thus,  it  runs  from  the  death  of  a  partner.  Quayle  v.  Guild,  91  111.  378. 
The  same  rule  seems  to  prevail  in  Iowa.  Richards  v.  Grinnell,  63  la.  44,  18  N.  \V. 
668. 

The  better  view,  however,  seems  to  be  opposed  to  this.  One  partner  may,  to  be 
sure,  bring  a  bill  for  an  accounting  at  once  upon  dissolution  ;  but  until  a  demand  for  an 
accounting  is  made,  either  by  bringing  a  bill  or  otherwise,  neither  party  is  in  default  to 
the  other  for  not  rendering  an  account.  There  must  be  some  refusal  to  account  or 
other  adverse  act  in  order  to  set  the  statute  running.  Rencher  v.  Anderson,  95  N.  C. 
208.  And  the  mere  fact  of  death  or  dissolution  is  not  enough.  Riddle  v.  Whitehill, 
135  U.  S.  621. 

Since  one  partner  generally  has  no  cause  of  action  against  the  other  till  the  debts 
are  paid,  the  statute  does  not  begin  to  run  until  all  debts  are  paid  at  least.  Brewer  v. 
Browne,  68  Ala.  210  ;  Miller  v.  Harris,  9  Baxt.  10]  ;  Jordan  v.  Miller,  75  Va.  442 ; 
Logan  V.  Dixon,  73  Wis.  533,  41  N.  W.  713.  And  the  true  rule  would  seem  to  be 
that  the  statute  begins  to  run  only  when  the  accounts  are  settled  and  a  balance  .struck  ; 
for  until  that  time  there  is  no  indebtedness  between  the  partners.  Hendy  r.  March, 
75  Cal.  566,  17  Pac.  702  ;  Rice  v.  Peunypacker,  5  Houst.  279  ;  Holloway  v.  Turner, 
61  Md.  217  ;  McDonald  i'.  Holmes,  22  Ore.  212,  29  Pac.  735.  In  Minnesota,  under  a 
peculiar  statute,  the  right  of  a  partner  to  an  account  is  barred  six  years  after  the  last 
assets  are  paid  in  to  the  copartner.     McClung  v.  Capehart,  24  Minn.  17.     In  Alabama 

it  is  six  years  from  the  last  item  of  the  account.     Wells  v.  Brown,  83  Ala.  161,  3  So. 

439  ;  Haynes  v.  Short,  88  Ala.  562,  7  So.  157. 


§  230.]       OF   REMEDIES    BY    PARTNEKS    AGAINST   THIRD   PARTIES.      307 


CHAPTER  IX. 

OP   REMEDIES    BY   PARTNERS    AGAINST   THIRD    PARTIES. 

§  229.  Remedies  for  Breach  of  Contract.  —  As  a  general  rale,  a 
partiiersliip  has  the  same  remedy,  and  in  the  same  form,  agahist 
a  thu'd  party,  that  one  person  has  against  another,  (a)  We  need 
only  advert  to  the  exceptions  to  this  rule,  or  the  qualifications  it 
has  received.  One  of  tliese,  derived  from  the  principle  that  no 
person  can  sue  himself,  or,  in  other  words,  that  the  same  person 
cannot  be  plaintiff  and  defendant  of  record,  we  have  already 
referred  to.  (b) 

§  230.  Discharge  by  one  Partner.  —  It  must  be  true,  that  a  firm 
cannot  bring  an  action  against  a  third  party,  on  any  paper,  or 
any  indebtedness  which  has  been  discharged  in  any  way  by  one 
of  the  firm,  so  that  there  is  a  perfect  defence  against  one  of  the 
plaintiffs,  (c)     For,  if  he  must  be  one  of  the  plaintiffs,  the  action 


(a)  If  coplaintiffs  sue  for  a  debt  due  to 
them  as  partners,  they  must  declare  as 
partners  ;  or,  perhaps,  it  may  be  sufficient 
to  prove  their  partnership.  Woodworth 
V.  Fuller,  24  111.  109. 

(b)  Ante,  §  200  ;  Bosanquet  v.  Wray, 
6  Taunt.  597  ;  Mainwaring  v.  Newman,  2 
B.  &  P.  120;  Motfat  v.  Van  Millenger, 
2  B.  &  P.  124,  n.  ;  Portland  Bank  v. 
Hyde,  11  Me.  196  ;  Englis  v.  Furniss,  4 
E.  D.  Smith,  587  ;  Green  v.  Chapman, 
27  Vt.  236  :  Rogers  v.  Rogers,  5  Ired. 
Eq.  31  ;  Lacy  t;.  LeBrun,  6  Ala.  904 ; 
Griffith  V.  Chew,  8  S.  &  R.  30,  31  ; 
Tindal  v.  Bright,  Minor,  103  ;  Banks  v. 
Mitchell,  8  Yerg.  Ill  ;  Miller  v.  Thorn, 
R.  M.  Charlt.  180  ;  Cole  v.  Reynolds,  18 
N.  Y.  74  (though  otherwise  by  statute  in 
New  York)  ;  Eastman  v.  Wright,  6  Pick. 
316.  Under  the  code  in  Indiana,  if  a 
partner  refuses  to  join  as  jilaintiff,  he  may 
be  made  a  party  defendant.  Hill  v. 
Marsh,  46  lud.  218. 


(c)  A  release  by  one  partner  is  a  bar  to 
any  action  by  the  firm,  even  though  made 
p2iis  dm-rein  continuance.  Phillips  v. 
Clagett,  11  M.  &  \V.  84;  Rawstorne  v. 
Gandell,  15  M.  &  W.  304;  Campbell 
V.  MuUett,  2  Swanst.  569  ;  Bristow  v. 
Taylor,  2  Stark.  50  ;  Porter  v.  Taylor,  6 
M.  &  S.  156  ;  Arton  v.  Booth,  4^  J.  B. 
Moore,  192  ;  Furnival  v.  Weston,  7  J.  B. 
Moore,  356  ;  Salmon  v.  Davis,  4  Binney, 
375  ;  Emerson  v.  Knower,  8  Pick.  63  ; 
Pierson  v.  Hooker,  3  Johns.  68  ;  Bruen 
r.  JSIarquand,  17  Johns.  58  ;  Gates  v. 
Pollock,  5  Jones,  344 ;  Smith  v.  Stone, 
4  Gill  &  J.  310  ;  McBiide  v.  Hagan,  1 
Wend.  326 ;  Doremus  v.  McCormick,  7 
Gill,  49;  Wallis  v.  Wallace,  6  How. 
(Miss.)  254;  Halsy  v.  Fairbanks,  4  Mass. 
206.  But,  as  the  authority  of  a  single 
partner  to  release  or  receis'e  payment 
arises  only  from  the  partnershii>,  it  is 
necessarily  limited  to  the  partnership 
scope,  in  the  ordinary  methods  of  business. 


308  THE   LAW    OP    PARTNERSHIP.  [CH.  IX. 

cannot  proceed  if  it  cannot  be  maintained  by  him.^  "Whether  this 
objection  passes  away  when  the  partner  discharging  the  debt  is 
only  dormant  and  secret,  or  nominal,  is,  in  fact,  the  same  as  tliat 
considered  before,  when  treating  of  the  relations  of  two  firms  with 
a  common  partner.  There  is  this  difference,  however.  A  secret 
partner,  who  actually  is  one,  or  a  nominal  partner  who  is  set  forth 
as  one,  may  lawfully  discharge  any  debt  due  to  the  firm  ;  and, 
therefore,  we  should  say  such  an  action  would  not  lie,  unless  the 
discharge  had  been  fraudulent  as  against  the  firm,  and  the  fraud 
brought  home,  in  some  way,  to  the  debtor. 

§  231.  Action  by  Firm  against  another  having  Common  Member.  — 
As  matter  of  usage  and  practice,  a  firm  having  paper  which  they 
cannot  sue,  because  one  of  themselves  would  necessarily  be  plaintiff 
and  defendant,  may  indorse  the  paper  to  a  third  party,  and  there 
seems  to  be  no  objection  to  his  bringing  an  action  upon  it  at 
law.  (t?) 

(d)  Davis    v.    Briggs     39    Me.    304  ;  Penn  v.  Stone,  10  Ala.  209,  though  the 

Thayer  w.  Biiffum,  11  Met.  398;  Pitcher  indorsee  was  also  assignee  of  the  partner's 

V.  Burrows,  17  Pick.  361  ;  Parker  v.  Ma-  share  both  of  as.sets  and  liabilities,  and  so 

comber,  18  Pick.  509  ;  Temple  v.  Seaver,  ultimately    liable   to   contribute  ;   because 

11   Cush.  314  ;  Smith  v.  Tustin,  5  Cow.  this  did  not  render  him  a  partner.     But, 

688  ;  Blake  v.  Wheadon,    2   Hayw.   109  ;  if  the  note  is  not  negotiable,  it  is  subject 

Babcock  v.  Stone,  3  McLean,  172  ;  Hey-  to  the  same  defences  in  the  hands  of  the 

wood  V.  Wingate,   14  N.   H.  73.     So  in  indorsee  as  in  those  of  the  payee,  being 

1  "Where  one  partner,  not  having  authority  to  do  so,  agreed  to  submit  a  firm  claim 
to  arbitration,  and  the  rest  of  the  firm  brought  suit  in  spite  of  the  award,  it  was  held 
that  they  might  thus  sue,  joining  the  other  partner  as  a  formal  party.  The  rule  that 
all  joint  parties  must  have  a  cause  of  action  or  none  can  recover  does  not,  the  court 
said,  a]iply  in  the  case  of  partnership.  Fancher  v.  Bibb  Furnace  Co.,  80  Ala.  481, 
2  So.  268. 

"Where  one  partner  assigned  firm  property  in  payment  of  his  individual  debts,  it 
was  held  in  Pennsylvania  that  the  other  partner  might  sue  in  trover,  like  any 
tenant  in  common  whose  cotenant  has  wrongfully  transferred  the  property  ;  recover- 
ing, of  course,  half  the  value  of  the  property.  McNair  v.  "Wilcox,  121  Pa.  437,  15 
Atl.  575. 

But  this  seems  to  lose  sight  of  the  fact  that  a  partner  is  only  technically  a  tenant 
in  common,  and  has  no  beneficial  interest  in  the  property.  The  firm  should  be  able  to 
get  from  the  wrongdoer  the  whole  value,  not  half  the  value  ;  and  the  partner  has  no 
more  right  to  get  half  the  value  of  the  property  in  damages  than  to  get  three  quarters 
or  nothing  at  all.  The  better  view  is  that  taken  in  Illinois,  where  it  is  held  that  the 
partner  cannot  sue  in  tort.     Sindelare  v.  Walker,  137  111.  43,  27  X.  E.  59. 

C.  had  dealings  with  S.,  who  came  to  owe  him  a  balance.  S.  formed  a  ])artnership 
with  A.,  of  which  C.  had  notice,  and  dealings  continued  between  C.  and  the  new  firm. 
The  firm  gave  C.  its  checks  on  account,  which  C.  by  agreement  with  S.  applied  to  the 
old  balance  owed  by  S.  This  was  held  a  misapplication;  and  though  the  firm  could 
not  recover  these  payments,  since  S.  would  be  a  necessary  party,  there  was  nothing 
to  prevent  it,  througli  A.,  from  insisting  that  the  checks  be  applied  on  the  firm  debt 
Cornells  v.  Stanhope,  14  E.  I.  97. 


§  232.]        OF    REMEDIES    BY   PARTNERS   AGAINST   THIRD    PARTIES.      309 

It  has  been  questioned,  in  some  cases,  whether  the  death  of  the 
person  who  is  a  j)artner  in  both  the  firms  removes  the  bar  to  an 
action  between  them.  This  is  denied  by  some  authorities  ;  but  we 
have  doubts  whether  there  be  a  positive  rule  to  this  effect,  (g)  As 
the  bar  of  a  common  partner  affects  not  the  contract  but  the 
remedy,  when  the  death  of  the  common  partner  removes  this 
technical  bar,  we  should  say  the  survivors  might  sue.  (^ee)  ^  As  a 
general  rule,  it  must  be  true,  that  no  action  can  be  sustained  by  a 
copartuershij),  properly  setting  forth  the  names  of  the  i)artners,  if 
either  of  them  is  disabled  from  bringing  that  suit.  And  the  cases 
must  be  few,  if  any  exist,  in  which  the  law  indulges  the  firm  with 
suppressing  the  name  of  the  disabled  partner,  and  so  bringing  the 
action. 

§  232.  Alien  Partner.  —  In  the  case  of  an  alien  enemy,  the  rule 
seems  to  be  established  ;  and,  as  a  consequence  of  it,  no  partner- 
ship, of  which  one  member  is  an  alien,  can  bring,  in  either  of  the 
countries  to  which  the  partners  belong,  any  action  during  a  war 
between  those  countries.  (/)  How  it  would  be  if  one  partner  — 
all  being  citizens  of  one  of  the  belligerents  —  resided  in  the  country 


a  mere  assifjnment  of  a  chose  in  action.  (/)  McConnel  v.  Hector,   3   B.   &  P. 

Hill    V.   McPheison,    15    Mo.    204.       In  113  ;  Albretcht  v.  Sussman,  2  Ves.  &  B. 

Tinirall  v.  O'Baniion,  7  B.  Mon.  603,  the  323  ;  and  see  O'Meales'  v.  Wilson,  1  Camy>. 

same  doctrine  is  held,  though  it  does  not  482.     All  causes  of  action  which  accrued 

clearly  appear  that  the  note  there  was  not  prior  to  the  war  are  suspended  during  the 

negotiable.  war.     But,   if    the  cause  of  action  arises 

(e)  In    Bosanquet   v,   Wray,  6  Taunt,  during  the  war,  it  seems  that  the  firm  are 

597,  it  is  said,  the  death  of  the  partner  precluded  from  suit  at  any  time,  if  their 

does  not  remove  the  bar,  as  that  "goes  partner  be  affected  with  a  hostile  character 

to  the  root  of  the  contract."     This  asser-  when   the  contract   was   made.     Thus   in 

tion  is  repeated  by  the  text-writers,  CoUyer  Griswold  i'.  Waddington,  16  Johns.  488, 

on  Part.  §  642,  Story  on  Part.  §  234,  Gow  the  plea  of  alien  enemy  was  held  a  bar  to 

on    Part.    119,   120,   and   in   many  cases,  an  action  brought  by  a  firm  after  return  of 

See  De  Tastet  v.  Shaw,  1  B.  &  Aid.  664  ;  peace  on  a   balance   accrued  during  war. 

Burly  V.  Harris,  8  N.  H.   233,  235.     See  one    partner  —  though    a    native   of    the 

also  Addison  on  Cont.   732  ;  but  it  does  country   where   the   suit   was    brought  — 

not  seem  to  have  been  expressly  decided  being  resident  in  the  belligerent  country 

until  Miller  v.  Thorn,  R.  JI.  Charlt.  180.  when  the  balance  accrued.     And,  by  the 

It  is  not,  however,  clear  fiom  authority  or  doctrine  of  the   courts  both   of   England 

on  principle   that  this  rule  is   universal,  and  America,  it  would  seem  tliat  the  right 

[See  ante,  §  201.]  to  contract  is  destroyed  eo  instanti  war  is 

(cp.)  This  is  expressly  held  in  Lacy  v.  declared.  See  The  Venus,  8  Cranch,  253. 
Le  Brun,  6  Ala.  904. 

^  Under  a  statute  allowing  an  action  to  be  brought  against  one  partner  on  a  claim 
against  a  firm,  a  partnership  having  a  claim  against  another  with  a  common  member 
may  sue  the  other  members  of  the  latter  firm.  Alexander  v.  King,  87  Ala.  642,  6  So. 
382  ;  Alexander  w.  Jones,  90  Ala.  474,  7  So.  903 ;  Morris  v.  Hillery,  7  How, 
(Miss.)  61. 


310  THE   LAW   OF   PARTNERSHIP.  [CH.  IX. 

of  the  other,  is  a  question  of  some  difficulty.  The  true  principle 
must  be,  that  the  rights  of  the  partnership  Avere  unaffected  by 
their  residence  alone,  if  there  were  nothing  of  adherence  to  the 
enemv.  (,</)  But  it  might  be  very  difficult  to  make  this  distinction 
applicable,  where  the  foreign  residence  of  the  partner  was  perma- 
nent, or  even  long,  (/i) 

§  233,  Partnership  between  Man  and  "Wife.  —  A  different  ques- 
tion, previously  adverted  to,  arises,  where,  by  the  law  of  a  foreign 
land,  husband  and  wife  may  form  a  mercantile  partnership,  or 
both  be  members  of  one.  At  home,  they  could,  of  course,  bring 
any  action.  But,  in  England  and  in  this  country,  a  wife  cannot 
join  with  her  husband  in  any  such  action  ;  and  it  is  said  that  an 
action  by  such  a  tirm  cannot  be  maintained.  (»)  It  is,  however, 
possible  that  the  recent  legislation  of  some  of  our  States,  giving  to 
the  married  woman,  so  far  as  her  property  is  concerned,  almost 
the  status  of  a  single  woman,  might  be  construed  to  permit  such 
an  action.  The  rule  that,  whenever  the  lex  loci  comes  into  question, 
the  lex  loci  fori  shall  determine  all  questions  of  remedy,  might 
oppose  such  an  action.  But  this  rule  has  only  been  applied  to  such 
questions  as  arise  under  the  statute  of  limitations,  and,  perhaps, 
those  of  infancy ;  (/)  and,  on  the  other  hand,  the  question  of  dis- 
ability to  make  the  contract  is  determined  by  the  law  of  the  place 
of  the  contract.  On  the  whole,  we  should  expect  that  an  American 
court  would  say,  either  that  the  wife  might  sue  with  the  husband, 
because  of  her  unquestionable  right,  at  home,  or  that  she  could 
neither  sue  nor  be  regarded  in  this  country  as  a  partner,  and  that 
her  name  might  be  omitted.     But  the  simpler,  and  certainly  the 

(g)  Collyer  on  Part.  §  647,  citing  Rob-  tional  Law,  45,  it  is  said  that  "  domicile 

erts  V.  Hard}',  3  M.   &  S.   533  ;  but  see  by   residence  in   the   enemy's  country  is 

next  note.  considered  as  adherence  to  the  enemy,  in- 

(h)  Roberts  v.  Hardy,  3  M.  &  S.  533;  asmuch  as  it  increases  his  strength  through 

O'Mealey   v.  Wilson,    1  Camp.   482  ;  The  contribution   of   taxes  and   other  means, 

Julia,    8     Cranch,    195  ;    The    Rapid,    8  and  consequently  imposes  a  hostile  char- 

Crancli,  160,   161.     In  Griswold  v.  Wad-  acter  or  the  person  domiciled."     It  should 

dington,  16  Johns.  479,  Kent,  C.  J.,  says  seem,  therefore,  that  mere  residence,  if  it 

of   the   prohibition    of    intercourse  :    "  It  clearly  appear,   will,   if  not  shown   to  be 

reaches  to  all  interchange  or  transfer  or  compulsory,  amount  to  adherence   to  the 

removal   of    property,    to   all   negotiation  enemy    rnd    support    the    plea    of    alien 

and  contracts,  to  all  communication  and  enemy. 

all  locomotive  intercourse  ;  to  a  state  of  (/)   Collyer  on  Part.  §  646,  citing  Cosio 

utter  occlusion  to  any  intercourse  but  one  v.  De  Bernales,   Ryan  &  M.    102.     There 

of  open  hostilitj',  to  any  meeting  but  in  is,   however,   no  case  which   decides   this 

actual    combat."     This    utter    and    rigid  question.     See    the    next    and    following 

veto  on  all  intercourse  arises  eo  instanti  notes.     [See  ante,  §  20.] 

war    is    declared.      See    The    Venus,    8  {j)  Thompson  v.  Ketcham,   8   Johns, 

Cranch,   253.     In   2  Wildman's   Interna-  189. 


§  234.]        OF   REMEDIES   BY   PARTNERS    AGAINST   THIRD    PARTIES.      311 

safer,  way  would  be,  to  indorse  the  paper  over,  if  it  were  negoti- 
able, to  some  third  person  who  could  be  made  plaintiff. 

§  234.  Indorsement  of  Firm  Paper  to  Partner.  — As  there  is  no 
doubt  tliat  a  firm  can  indorse  their  paper  to  any  third  party,  who 
may  then  sue  it,  so  we  suppose  it  clear  that  they  may  indorse  it 
over  to  one  of  their  number,  who  may  then  bring  the  suit  in  his 
own  name.  (A;)  Nor  do  we  sec  why  this  indorsement  may  not  be 
made  by  the  partner  who  is  indorsee.  It  is  every  day's  practice  to 
make  a  note  ])ayable  to  the  maker's  own  order.  There  is  no  such 
practice  of  indorsing  to  the  order  of  the  indorser,  because  he  must 
then  indorse  again,  in  order  to  designate  and  authorize  a  third 
person  to  bring  suit,  and  this  he  can  do  as  well  at  first.  Bnt, 
where  there  is  any  reason  for  a  payee's  indorsing  to  his  own  order, 
we  see  no  objection  to  it ;  and  we  should  say  there  could  be  none 
to  a  partner's  writing  as  indorser  the  name  of  the  firm,  and  as 
indorsee  his  own.  (I)  This  power,  however,  is  confined  to  negoti- 
able paper.  In  many  of  our  States,  the  common  law  as  to  choses 
in  action  has  been  materially  modified  ;  but,  where  it  remains  in 
force,  no  partner  can  transfer  and  assign  his  interest  in  a  chose  in 
action  to  the  other  partner  or  partners,  so  that  the  transferee  may 
bring  his  action  at  law  in  his  own  name,  (in)  In  equity  it  would 
be  otherwise  ;  (n)  but  such  a  transfer,  for  consideration,  would 


{k)  Bailey  v.  Lyman,  1  Story,  396  ;  In  Towle  v.  Harrington,  1  Cush.  146,  a 
Bolton  V.  Puller,  1  B.  &  P.  546  :  Goddard  note  was  made  by  one  firm  to  another, 
V.  Lyman,  14  Pick.  268  ;  Russell  v.  Swan,  there  being  a  common  partner  in  both. 
16  Mass.  314.  In  Estabrook  v.  Smith,  6  After  the  death  of  the  common  partner, 
Gray,  570,  it  was  held,  that  a  partner  the  survivor  indorsed  the  note  to  himself, 
might  transfer  a  partnersiiip  note  by  in-  The  indorsement  was  held  void,  but  only 
dorseitient  in  the  partnership  name  to  his  because  the  note  survived  to  him  as  part- 
copartner,  but  could  not  by  an  indorse-  ner,  and  his  indorsement  to  himself  was 
ment  in  his  own ;  though  it  was  argued  null.  But  a  partner's  right  to  indorse 
that  to  require  the  name  of  the  copartner  with  the  partnership  name  the  partnership 
as  indorser  on  the  note  was  to  compel  him  paper  to  himself  seems  implif'dly  admitted, 
to  indorse  to  him.self.  But  it  has  been  (?re)  The  common  law  (without  statu- 
held,  that  where  the  indorsement  by  the  tory  provision)  has  nowhere  been  so  modi- 
firm  was  merely  colorable,  to  avoid  the  fied  that  the  mere  assignee  of  a  chose  in 
objection  that  tlie  maker  was  a  partner,  it  action  can  sue  in  his  own  name.  A  mere 
was  held  still  to  be  the  note  of  the  firm,  assignment,  therefore,  by  one  partner  to 
and  that  no  action  could  be  maintained  his  copartner  of  a  partnership  demand, 
upon  it  by  the  indorsee.  Ti])ton  v.  Nance,  gives  no  right  to  the  assignee  to  sue  in  his 
4  Ala.  194.  If  the  indorsement  be  in  the  own  name.  Tate  v.  Mut.  Fire  Ins.  Co., 
name  of  one  partner  only,  it  passes  13  Gray,  79  ;  Russell  v.  Swan,  16  Mass. 
no  interest.  Mclntire  v.  McLaurin,  2  314,  and  cases  cited  in  note  {p),  infra. 
Humph.  71.  (")  An   assignee   has   not,   however,  a 

(I)  Burnham    v.    Whittier,    5    N.    H.  resort  to  equity,  merely  because  he  cannot 

334  ;  Kirby  v.  Coggswell,  1  Caines,   505  ;  sue  in   his   own  name  ;  for,    as  courts  of 

and  see  Estabrook  r.  Smith,  6  Gray,  570.  law  admit  him  to  sue  in  the  name  of  his 


312 


THE    LAW    OP    PARTNERSHIP. 


[CH.  IX. 


authorize  the  transferee  to  use  the  name  of  the  transferring  part- 
ner, at  law,  nor  could  he  interfere  with  the  suit  in  any  way.  (o) 

§  235.  Who  must  join  as  Parties.  —  It  must  he  the  general 
rule,  that  all  those  who  were  partners  at  the  time  a  deht  was  con- 
tracted, are  those  to  whom  it  is  due,  and  they  should  join  in  any 
action  to  recover  the  del)t.  (jo)  And  it  is,  moreover,  an  unques- 
tioned rule,  that  no  agreement  between  partners  can  alter  the 
liability  or  mode  of  liability  of  their  debtor,  without  his  assent 
Thus,  by  no  assignment  of  a  debt  due  to  the  partnership  by  one 
of  the  partners,  can  he  acquire  the  right  to  sue  it  in  his  own 
name.  (9-)  If,  however,  the  assent  of  the  debtor  sufficiently 
appear,  and  be  on  a  good  consideration,  an  action  may  be  main- 
tained by  the  partner  who  is   assignee   in   his   own   name,  (r) 


assignor,  his  remedy  at  law  is  complete, 
and  equity  will  not  entertain  his  claim 
unless  inequitable  defences  are  set  up  in 
liis  assignor's  name.  See  1  Pars,  on  Cont. 
(5th  ed.)  224,  note  {d),  and  cases  there 
cited  and  examined  ;  especially  Ontario 
Bank  v.  Mumford,  2  Barb.  Ch.  596. 

(o)  Eastman  v.  Wright,  6  Pick.  316, 
322.  By  the  assignment,  all  property  is 
divested  from  the  assignor,  who  becomes 
thereby  a  merely  nominal  party,  with  no 
interest  for  a  release  to  act  upon,  and  the 
release  is  therefore  merely  null.  Raw- 
storne  v.  Gandell,  15  M.  &  W.  304.  But 
notice  must  also  be  given  the  debtor,  as 
without  this,  which  is  practically  a  revoca- 
tion of  the  partner's  authority  to  receive  or 
discharge  the  debt,  the  debtor  has  a  right 
to  presume  each  partner  still  possessed  of 
that  authority  wliich  the  mere  fact  of  part- 
nership confers. 

{p)  Jell  V.  Douglass,  4  B.  &  Aid.  374  ; 
Dob  V.  Halsey,  16  Johns.  34  ;  Hewes  v. 
Bnyley,  20  Pick.  96  ;  Gushing  v.  Marston, 
12  Gush.  431  ;  Gage  v.  Rollins,  10  Met. 
348  ;  Halliday  v.  Doggett,  6  Pick.  359  ; 
Pearson  v.  Parker,  3  N.  H.  366  ;  Parker 
V.  Gregg,  23  N.  H.  416  ;  Horbach  v.  Huey, 
4  Watts,  455  ;  Allen  v.  White,  Minor, 
365  ;  Snodgrass  v.  Broadwell,  2  Litt.  353  ; 
Wright  V.  Williamson,  2  Penning.  978  ; 
Wilson  V.  Wallace,  8  S.  &  R.  53  ;  Tate  v. 
Mut.  Fire  Ins.  Co.,  13  Gray,  79  ;  Speake 
V.  Prewilton,  6  Tex.  352  ;  Jones  v.  Gates, 
9  B.  &  C.  532  ;  Garrett  v.  Handley,  3  B. 
&  C.  462  ;  Cooke  v.  Seely.  2  Exch.  746  ; 
Driver  v.  Burton,  17  Q.  B.  989  ;  Greeley 
V.  Wyeth,  10  N.  H.  15. 


(q)  Huey  V.  Horbach,  4  Watts,  455  ; 
Clark  V.  Howe,  23  Me.  560  ;  Degroot  v. 
Darby,  7  Rich.  117 ;  Gushing  v.  Marston, 
12  Gush.  431  ;  Russell  v.  Swan,  16  Mass. 
314  ;  dictum  in  Radenhurst  v.  Bates, 
3  Bing.  470  ;  Wood  v.  Rutland  Ins.  Co., 
31  Vt.  552.  But  it  seems  to  have  been 
thought  that  on  dissolution  a  sole  right 
of  action  might  vest  in  remaining  part- 
ners, without  an}'  assent  or  new  promise 
by  the  debtor.  Collyer  on  Part.  §  658, 
citing  Evans  v.  Silverlock,  Peake  21  ; 
Atkinson  v.  Laing,  Dowl.  &  R.  N.  P.  16. 
1  Lindley  Partn.  403,  remarks  that  tins 
case  "is  more  than  questionable."  We 
should  say  that  Mr.  Collyer's  proposition 
is  without  authority,  and  tliat  there  is  no 
such  exception  as  "severance  by  dissolu- 
tion," to  the  necessity  of  joinder  of  all  the 
partners  on  a  partnership  demand.  In 
Louisiana,  however,  it  seems  that  the 
li(piidating  partner  on  a  dissolution  of  the 
firm  may  maintain  an  action  in  liis  own 
name,  only  setting  forth  the  fact  that  the 
transaction  arises  out  of  the  business  of 
the  firm.  White  v.  Jones,  14  La.  Ann. 
681. 

(r)  Degroot  v.  Darby,  7  Rich.  117; 
Cook  V.  Beech,  10  Humph.  412  ;  Howell 
^.Reynolds,  12  Ala.  128  ;  McLanahan  v. 
Ellery,  3  Mass.  269  ;  Moore  v.  Hill,  2 
Peake,  10  ;  Stevens  v.  Lunt,  19  Me.  70, 
72  ;  Wood  v.  Rutland  Ins.  Co.,  31  Vt. 
552  ;  Aspinwall  v.  Lond.  &  N.  W.  R.  R. 
Co.,  11  Hare,  325  ;  Armsby  v.  Farnam, 
16  Pick.  318. 


§  235.]       OP    REMEDIES    BY    PARTNERS    AGAINST   THIRD   PARTIES.      313 

When  such  valid  assent  is  given,  the  action  by  the  assignee  in 
his  own  name  is  upon  a  new  contract  substituted  for  the  old  one 
on  principles  similar  to  those  of  novation  ;  (s)  the  discharge  of  the 
debtor  from  his  liability  to  the  firm  forming  the  consideration  of 
the  new  promise,  {t}  Where,  however,  the  assignment  is  by  an 
old  firm  to  a  new  one  which  includes  the  old,  there  would  seem 
to  be  but  two  parties  in  question  ;  for  the  old  firm  and  the  new 
one  are  one  quoad  this  contract,  and  the  promises  of  discharge  of 
the  old  liability,  and  of  payment  of  the  new  one  by  the  firm  and 
the  debtor  respectively,  are  mutually  considerations  one  for  the 
other,  (u)  In  like  manner  a  new  contract  may  arise  by  the 
implied  assent  of  the  debtor,  who  has  paid  one  or  more  of  several 
joint  creditors  their  respective  shares,  to  pay  the  other  his  sepa- 
rate share,  and  the  latter  may  maintain  his  separate  action 
therefor,  (v) 

Persons  who  leave  the  firm  and  cease  to  be  partners  may 
transfer  the  debt  so  as  to  retain  no  interest  in  it ;  but  still  their 
names  should  be  used,  (tv)  On  the  other  hand,  those  who  come 
into  the  firm  after  the  debt  is  created  may  acquire  an  interest  in 
it,  and  the  debt  will  be  collected  for  their  benefit ;  but  still  their 
names  cannot  be  used,  (z)  This  is  true  even  where  the  debt  was 
originally  contracted  with  the  understanding  that  it  should  be  a 
continuing  contract,  contemplating  successive  changes  in  the 
house,  and  intended  to  go  through  them  all  and  be  always  a  debt 
to  the  house,  whoever  may  be  its  copartners,  (i/) 

(s)  See  Pars,  on  Cont.  vol.  i.  pp.  217-  returned,  A.  &  B.  agreed  to  divide,  and 

222,  5th  ed.  the  master  subsequently  paid  A.  his  share. 

(t)  This  new  promise  may  be  express,  B.    demanded    his    of    the    master,    who 

as  in  Howell  v.  Reynolds,  12  Ala.  12S,  and  refused,    but    offered   to    "  pay   the   true 

Wood  V.  Rutland  Ins.   Co.,  31  Vt.    582 ;  owner."  It  was  held  that  this  would  be 

or  implied,  as  it  was  in  Cook  v.  Beech,  10  construed  as  a  direct  promise  to  pay  B., 

Humph.  412,  from  the  debtor's  drawing  a  and  that  he   might  sue  accordingly.     So 

bill  for  the  amount  of  the  debt  in  favor  of  also  Burn  v.  Morris,  3  Caines,  54. 

the  assignee;  or  from  his  admissions,  as  (iv)   Pease  v.  Hirst,  10   B.  &   C.  122  ; 

in  Degroot  v.  Darby,  7  Rich.  117.  Dobbin  v.    Fo.ster,  1   Car.  &  K.  323.     In 

(u)  See  Armsby  r.  Farnam,   16  Pick.  Atkinson   v.  Laing,   1  Dowl.  &  R.  N.  P. 

318.  16,  a  contrary  doctrine   wa.s  held  by  Lord 

(y)  Garrett  v.   Taylor,  1   Esp.   N.   P.  Tenterden  ;    but  see  this  case  examined, 

117  ;  Kirkman  v.  Newstead,  1  Esp.  N.  P.  supra,  n.  (q). 

117  ;  Baker  v.  Jewell,  6  Mass.  460  ;  (x)  Pease  v.  Hirst,  10  B,  &  C.  122  ; 
recognized  in  Medbury  v.  Watson,  6  Met.  Wilsford  v.  Wood,  1  Esj).  182  ;  where  an 
257  ;  Blair  v.  Snover,  1  Halst.  153  ;  Hoi-  incoming  partner,  whose  entry  had  been 
land  V.  Weld,  4  Me.  255  ;  Horbach  v.  antedated  on  the  partnership  deed,  was 
Huey,  4  Watts,  455  ;  Beach  v.  Hotch-  not  allowed  to  join  in  an  action  on  a  con- 
kiss,  2  Conn.  697.  In  Austin  v.  Walsh,  tract  made  prior  to  his  entry,  but  sub- 
2  Mass.  401,  A.  &  B.  jointly  consigned  a  sequent  to  the  date  of  the  deed, 
cargo,  directing  the  master  to  keep  the  (y)  Pease  v.  Hirst,  10  B.  &  C.  122. 
proceeds  till  called  on.      Before  the  vessel  In  this  case,  a  note  was  made  to  A.,  B., 


314 


THE   LAW   OF   PARTNERSHIP, 


[CH.  IX. 


§  236.  Guaranty  how  affected  by  Change  in  Firm. —-  Intimately 
connected  with  this  topic  is  tlie  question,  how  far  a  guaranty, 
bond  of  indemnity,  and  the  lil^e,  are  construed  as  covering  matters 
subsequent  to  a  change  of  the  firm  by  tlie  retirement  or  accession 
of  a  partner  or  partners  ;  and  when  it  ceases  to  have  any  opera- 
tion after  such  change.  We  give  the  authorities  on  this  subject  in 
the  note,  (z)     It  will  be  seen  that  the  general  rule,  as  now  estab- 


C. ,  D.,  &  E.,  partners  in  a  banking  house, 
as  security  for  advances  to  be  made  by 
them.  A.  and  B.  left  the  firm,  and  new 
members  entered  it  ;  and  advances  were 
also  made  by  the  new  firm.  The  note  was 
handed  by  the  old  firm  to  the  new,  but 
not  indorsed.  An  action  thereon  by  the 
old  firm  for  the  new  advances  was  held 
rightly  brought  by  them,  and  by  them 
only  ;  the  security  covering  the  new 
advances  being  evidently  intended  to  be  a 
continuing  one. 

{z)  The  earliest  case  is  that  of  Wright 
t.  Kussell,  3  Wils.  532.  Here  a  bond, 
conditioned  for  the  faithful  service  of  W. 
Baird  as  cleik,  was  made  to  the  yilain- 
titf,  Wright.  Wright  subse(iuently  took 
a  partner.  Baird  then  left  his  service, 
but  re-entered  that  of  the  new  firm  ;  and, 
while  in  their  service,  committed  a  breach 
of  trust  by  embezzling  the  money  of  the 
firm.  In  an  action  of  debt  on  the  bond, 
judgment  was  given  for  the  defendant; 
De  Grey,  C.  J.,  saying  :  "  The  law  is, 
that  a  surety  shall  not  be  bound  beyond 
the  terms  of  his  engagement,  as  under- 
stood at  the  time  he  entered  into  it.  Here 
Wright,  by  his  own  act,  takes  in  a  part- 
ner. From  that  moment  the  suretyship  is 
at  an  end.  If  there  is  one,  there  may  be 
twenty  partners  taken  in.  Is  the  surety 
liable  if  Baird  disobeys  the  orders  of  any 
one  of  these  partners  ?  Or  can  the  surety 
be  called  upon  to  insure  the  money  of  all 
of  the  partners?  Certainly  not."  In  Bar- 
clay V.  Lucas,  1  T.  R.  291,  however.  Lord 
Mansfield  held,  that  bonds  of  this  nature 
were  given  to  the  house,  and  not  to  the 
individual  ;  and  that,  therefore,  they 
extended  the  ap])lication  of  the  bond  to  a 
new  firm,  if  the  old  name  was  preserved. 
In  this  case,  considerable  reliance  was 
placed  on  the  recital  by  which  the  partners 
were  to  take  the  clerk  into  their  employ, 
•'in  their  shop  and  counting-house.''  And, 
in  another  case,  it  was  admitted  to  be  the 


common  understanding  among  merchants, 
that  the  firm,  and  not  the  individual  part- 
ners were  meant  to  be  guaranteed  from 
loss  :  per  Mansfield,  C.  J.,  in  Weston  v. 
Barton,  4  Taunt.  673.  But  the  case  of 
Barclay  v.  Lucas,  seems  clearly  not  law. 
In  Barker  v.  Parker,  1  T.  R.  287,  where 
the  bond  guaranteed  faithful  service  to 
"  A.  B.,  and  his  executors,"  Lord  Mans- 
field held  that  this  did  not  cover  breaches 
committed  by  the  cleik  while  in  the  ser- 
vice of  the  executors  of  A.  B.,  who  kept 
on  in  the  same  business  after  the  death  of 
their  testator.  He  attempted  to  sustain 
Barclay  v.  Lucas,  by  the  distinction  that 
the  change  in  that  case  was  only  by  the 
accession  of  a  new  partner,  the  old  firm 
still  continuing.  But  this  distinction  is 
expressly  against  the  case  of  Wright  v. 
Russell,  supra,  and  must  fall  with  the 
case  of  Barclay  v.  Lucas,  which  rests  solely 
upon  it,  if  the  case  of  Wright  v.  Russell 
be  law.  Of  this  there  is  now  little  doubt. 
In  Myers  v.  Edge,  7  T.  R.  254,  Lord 
Kenyon  said  :  "  I  very  much  approve  of 
the  case  from  Wilson  ;  "  and  decided  the 
case  before  him  on  its  authority.  Stor}', 
Part.  §  250,  note  3,  says  :  "Barclay  v. 
Lucas  was  a  case  which  was  supposed  to 
contain  language  importing  a  provision 
of  this  [a  continuing]  character  ;  but  great 
doubts  may  well  be  entertained  whether 
the  case  can  be  maintained  upon  any  such 
interpretation."  So  in  Weston  r.  Barton,  4 
Taunt.  673,  it  was  said  by  Mansfield,  C. 
J. ;  "  The  propriety  of  Barclay  v.  Lucas 
has  been  very  much  questioned."  In  this 
last  case,  the  condition  was  for  repayment 
to  five  bankers  of  an}'  money  advanced  by 
these  five,  or  any  or  either  of  them  ;  and 
it  was  held,  that  even  this  did  not  cover 
advances  made  by  the  survivors  after  one 
had  died,  Mansfield,  C.  J.,  saying:  "There 
may  be  many  very  good  ivnsons  for  such  a 
construction.  It  is  veiy  probable  that  sure- 
ties may  be  mduced  to  enter  into  such  a 


§  237]        OF    REMEDIES    BY    PARTNERS    AGAINST    THIRD    PARTIES.       315 

lislied,  is  tlmt  siicli  change  discharges  a  bond  of  indemnity.  And 
the  principle  is  applied  with  equal  force  to  simple  guaranties,  (a) 
And  on  the  same  ground  any  change  in  a  firm  materially  altering 
ite  character  discharges  the  surety,  although  the  members  of  the 
firm  remain  unchanged.  (/')  So  where  there  is  an  alteration,  by 
removal  or  accession,  in  the  parties  whose  conduct  is  guaranteed, 
the  bond  is  discharged  of  farther  operation,  (c)  And  a  contract 
with  an  ostensible  partner,  which  has  particular  reference  to  his 
individual  skill,  has  been  held  not  to  survive  to  the  dormant 
pai'tner.  (d) 

Fiom  the  cases  cited  in  the  notes  to  the  last  paragraph  and 
ti-oni  the  nature  of  partnership,  we  should  draw  the  general  con- 
clusion, that  a  bai'gain  with  a  firm  expires  with  the  dissolution  of 
the  firm,  or  with  any  change  in  it,  and  is  not  assignable  or  trans- 
ferable by  the  firm  to  one  of  the  partners,  or  to  a  stranger.  For 
this  the  obvious  reason  may  be  given,  that  any  contract  with  a 
firm  may  be  supposed  to  be  made  with  the  persons  composing  it, 
because  they  are  partners.  It  may  be  impossible  to  say  that  the 
bargain  was  made  on  the  credit,  pecuniary  or  moral,  of  this  one 
or  that  one.  The  party  has  a  right  to  say  that  he  made  it  with 
all,  because  they  were  all  there,  and  each  contributed  what  he 
did.  whether  of  money,  skill,  or  character. 

§  237.    Parties    to    Formal    Contracts.  —  Only    those    who    are 

securit}-  by  a  confidence  which  they  repo.se  ner  was  not  known  to  the  guarantor,  she 

in    the    integrity,  diligence,    caution,  and  could  only  claim  that  the  guaranty  was  at 

accuracy  of  one  or  two  of  the  partners.  In  an  end  because  she  had  contracted  with  the 

the  nature  of  things,  there   cannot  be   a  partners  in    interest,    and   not  in   name 

partnership,  consisting  of  several  persons,  merel}\     This  position,  however,  doe.s  not 

in  which  there  are  not  some  persons  pos-  bring  the  case  within  the  reason  of  personal 

sessing    these  (qualities    in    a  greater  de-  confidence  reposed  actually,   or  by  legal 

gree  than   the  rest  ;  and  it  may  be  that  intendment,  in  the  known  members  of  the 

the  partner  dying  or  going  out  is  the  very  firm,  as   assigned  by   Lord   Mansfield   in 

person  on  whom  the  sureties  relied."    The  Weston   v.  Barton,  supra,  and  followed  in 

same  was  held  in  Arlington  v.  Merrick,  2  Arlington  v.  Merrick,  and  Strange  v.  Lee, 

Saund.  412  ;  Stranger.  Lee,  3  East,  484.  snpra  ;   and  the  authority    of  this  case, 

(«)  Myers  v.  Edge,  7  T.  R.  254  ;  Spiers  therefore,  finds  no  support  in  those. 
V.  Houston,  4   Bligh,  N.  s,  515 ;  Ex  parte  (b)  Thu.s,  in  Dance  v.  Girdler,  1   P>os. 

Kensington,  2  Ves.  &  B.  79  ;  H  jlland  v.  &  P.  n.  s.   34,    the  incorporation   of  the 

Teed,  7  Hare,  50.  So  in  Ex  part'-  McGee,  obligees  had  this  effect. 

9  Ves.  697,  an  agreement  to  pay  bills  into  (c)  Sim.son  v.  Cook,  1  Bing.  452  ; 
a  banking-house  was  held  discharged  by  L^niv.  of  Cambridge  v.  Baldwin,  5  M.  & 
the  bankruptcy  of  the  partners,  and  an  W.  580  ;  Bellairs  v.  Elsworth,  3  Cam]), 
action  was  held,  to  lie  against  the  assignees  53  ;  Russell  v.  Perkins,  1  Muss.  368  •, 
in  bankruptcy  for  bills  paid  subsequently  London  Ass.  Co.  v.  Bold,  6  Q.  B.  514. 

to  that  event.   In  the  case  of  Dry  v.  Davy,  (d)  Robson  v.  Drummond,  2  B.  &  Ad. 

10  A.  &  E.  30,  it  was  even  held  that  the  303.  .■^nd  see  Stevens  v.  Benning,  1  Kaj 
retirement  of  a   dormant  partner  put  an     &  J.  168,  6  De  G.,  M.  &  G.  223. 

end  to  a  guaranty.      If  the  dormant  part- 


316 


THE    LAW    OF    PARTNERSHIP. 


[CH. 


IX- 


named  as  parties  in  contracts  under  seal  can  sue  upon  such  con- 
tracts, (e)  But  it  has  been  held,  that  where  a  deed  was  made  to 
a  partnership  by  the  name  of  the  firm,  the  then  existing  partners 
might  sue  upon  it,  and  parol  evidence  was  admitted  to  show  who 
those  were.  (/)  And  in  another  case  a  bond  to  the  trustees  of  a 
trading  company,  to  secure  the  faithful  services  of  a  clerk,  was 
held  to  remain  in  full  force  so  long  as  the  clerk  acted  in  that 
capacity,  notwithstanding  the  fluctuations  of  the  company,  (ff) 
Where  the  partners  have  substituted  a  deed  for  a  simple  contract, 
the  latter  is  merged  in  the  former,  and  those  only  who  are  parties 
to  the  deed  can  sue  upon  it.  {g) 

The  same  limitation  of  the  parties  to  the  action  to  those  whose 
names  appear  on  the  instrument  prevails  in  the  case  of  negotiable 
paper,  and  all  those  parties  must  sue.  {h)  If  the  note  be  indorsed 
in  blank,  then,  of  course,  all  or  any  of  tlie  partners  may  sue 
thereon,  (i) 

§  238.  Parties  to  Simple  Contracts.  —  If  a  simple  Contract  be 
made  with  one  partner  for  the  benefit  of  the  firm,  it  may  be  sued 
by  all,  (j")  and  cannot  be  sued  excepting  by  all  the    partners, 


(c)  Cabell  v.  Vanghan,  1  Saund.  291, 
f;  Metcalfe  v.  Rycroft,  6  M.  &  S.  75  ; 
Vernon  r.  Jefferys,  2  Str  1146  ;  Lefevre  v. 
Boyle,  3  F>.  &  Ad.  877  ;  Elile  v.  Purdy,  6 
Wend.  629;  Petrie  v.  Bury,  3  B.  &  C. 
354  ;  Ex  parte  Williams,  Buck,  13,  15, 
note  ;  Scott  v.  Godwin,  1  B.  &  P.  74. 
Thus  it  is  .said,  in  Montague  v.  Smith,  13 
Mass.  405  :  "  When  covenants  are  made 
by  or  between  two  or  more  parties,  al- 
though the  covenant  be  for  the  benefit  of 
a  third  person,  mentioned  in  the  instru- 
ment, the  action  must,  nevertheless,  be 
brought  by  the  parties." 

(/)  MoUer  v.  Lambert,  2  Camp.  548  ; 
1  Lindley  on  Part.  386. 

(/)  Metcalf  u.  Bruin,  12  East,  400,  2 
Camp.  422. 

(</)  Evans  i".  Bennett,  1  Camp.  303, 
note.  "There  has  been  no  case  where, 
the  interest  being  the  same  as  that  secured 
by  deed,  it  has  been  holden  that  assumpsit 
would  lie,"  Lord  Ellenborough,  Schack  v. 
Autorg,  1  M.  &  8.  574  ;  but  the  interest 
intended  to  be  .secured  by  the  two  must  be 
identical.  See  Twopenny  v.  Young,  3  B. 
&  C.  208,  and  Dean  t'.  Newhall,  8  T.  R. 
168  ;  Solly  v.  Forbes,  2  Br.  &  B.  38, 

Ih)  In  actions  on  bills  and  notes,  only 
the  parties  thereto  can,  but  all  these  must, 


sue.  Guidon  v.  Robson,  2  Camp.  302  ; 
Bawden  t- .  Howell,  3  M.  &  G.  638  ;  Pease 
V.  Hirst,  10  B.  &  C.  122  ;  Sitfkin  v. 
Walker,  2  Camp.  307  ;  Wliitney  v.  Mc- 
Kechnie,  1  Bosw.  427.  In  Boswell  v. 
Dunning,  5  Harr.  231,  because  the  note 
was  indorsed  in  full  to  a  firm,  by  the  firm 
name,  proof  was  required  of  the  partner- 
ship. 

(0  Ord  V.  Portal,  3  Camp.  239  ;  Att- 
wood  i\  Rattcnbury,  6  J.  B.  Moore,  579  ; 
Machell  v.  Kinnear,  1  Stark.  499.  But  if 
it  appear  affirmatively,  by  the  defendant, 
that  the  note  was  delivered  to  third  per- 
sons, in  the  first  place  the  plaintiffs  must 
show  a  delivery  to  themselves  by  such 
holders.     Id. 

(j)  Garrett  v.  Handley,  4  B.  &  C.  664  ; 
Alexander  v.  Barker,  2  Cr.  &  J.  133  ; 
Skinner  v.  Stocks,  4  B.  &  Aid.  437  ;  Cook 
V.  Seely,  2  Exch.  746  ;  Halliday  v.  Daggett, 
6  Pick.  359  ;  Creel  v.  Bell,  2  J.  J.  Marsh. 
309  ;  Fortune  v.  Brazier,  10  Ala.  793  ; 
Stevens  v.  Lunt,  19  Me.  70  ;  Wright  v. 
Williamson,  2  Penn.  978  ;  Pearson  v.  Par- 
ker, 3  N.  H.  366.  [Beakes  v.  Da  Cunha 
(N.  Y.),  27  N.  E.  251.]  This  is,  indeed, 
the  case  in  all  implied  contracts  that  arise 
in  the  course  of  the  partnership  business  ; 
for,  as  the  implied  promise  must  follow 


§  238.J       OF    REMEDIES    BY    PARTNERS    AGAINST    THIRD    PARTIES.       317 

unless  there  be  some  express  language  or  circumstances  which 
make  it  a  bargain  with  one  only  ;  (k)  whereas  such  contracts,  in 
cases  where  the  parties  to  be  benefited  and  the  one  making  the 
contract  do  not  stand  in  the  relation  of  partners,  may  generally 
be  sued  either  by  the  party  whose  name  is  used,  (1)  or  by  the 
})arti('S  actually  interested,  though  their  names  be  not  used,  (m) 
But  this  differs  from  the  case  supposed  in  the  last  paragraph, 
thus  ;  A  promise  to  a  present  firm,  with  the  understanding  that 
others  may  come  in  and  profit  by  it,  is  still  no  bargain  with 
those  others.  They  are  not  known,  and  are  indeed  uncertain  as 
yet.  But  a  bargain  with  one  of  a  firm  for  the  interest  and  bene- 
fit of  all  the  firm  is  a  present  bargain  with  all  the  firm.  And 
thus  the  rule  remains  good  that  those,  and  only  those,  with  whom 
the  bargain  is  made  can  sue  upon  it.  The  exception  where  a  bar- 
gain is  made  under  seal  with  one  for  the  interest  and  benefit  of 
others,  in  wliich  case  only  those  named  as  parties  can  sue,  arises 
from  the  peculiar  law  of  specialties,  which  prevents  any  persons 
not  named  from  coming  in  as  parties. 


the  consideration,  it  is  raised  to  the  firm 
from  whom  the  consideration  moves.  Boggs 
I'.  Curtin,  10  S.  &  R.  211  ;  Lee  v.  Gibbons, 
14  S.  &  R.  Ill  ;  Uhner  v.  Cunningham,  2 
Me.  118,  119  ;  Addison  on  Cent.  743  ;  1 
Pars,  on  Cont.  (5th  ed.)  26. 

{k)  Sims  V.  Bond,  5  B.  &  Ad.  389  ; 
Garrett  v.  Handley,  3  B.  &  C.  462  ;  Oliver 
V.  Burton,  17  Q.  B.  989;  Warner  v. 
Griswold,  8  Wend.  665  ;  Piatt  r.  Halen, 
23  Wend.  456  ;  Ewing  v.  French,  1  Blackf. 
353  ;  Ward  v.  Leviston,  7  Blackf.  466  ; 
Doremus  v.  Sehlon,  19  Johns.  213  ;  Burn 
V.  Morris,  3  Gaines,  54  ;  Munroe  v.  Ezzel, 
11  Ala.  603.  Thus,  in  Wood  v.  O'Kelly,  8 
Gush.  406,  where  the  question  whether  a 
mesmeric  doctor  shouki  join  as  coplaintitT, 
in  an  action  for  medical  services,  his  part- 
ner, the  woman  who  slept  in  the  clairvoy- 
ant state,  and  with  whom  he  divided  the 
net  profits  after  paying  expenses,  the  court 
below  ruled,  that,  if  the  woman  was  a 
silent  partner,  she  need  not  be  joined.  In 
the  court  above,  it  was  not  necessary  to 
consider  the  question.  The  court,  however, 
said  :  "  It  is  not  necessarj' that  a  dormant 
partner  should  be  joined  with  the  osten- 
sible partners  of  a  firm,  in  an  action 
against  a  person  who  dealt  only  with  the 
ostensible  [tartners." 

(J)  Ward  V.   Leviston,  7  Blackf.   466  ; 


Rodwell  V.  Ridge,  1  G.  &  P.  220  ;  Skinner 
V.  Stocks,  4  B.  &  Aid.  437  ;  Desher  v. 
Holland,  12  Ala.  513  ;  Warner  v.  Griswold, 
2  Wend.  665  ;  Lapham  v.  Green,  9  Vt 
407  ;  Curtis  v.  Belknap,  21  Vt.  433 ; 
Sims  V.  Bond,  5  B.  &  Ad.  393  ;  Colhurn 
V.  Phillips,  13  Gray,  64,  66  ;  Sims  v. 
Brittain,  4  B.  &  Ad.  375. 

(m)  Arden  v.  Tucker,  4  B.  &  Ad.  815  ; 
Rodwell  V.  Ridge,  1  C.  &  P.  220 ;  Lapham 
V.  Green,  9  Vt.  407  ;  Cothay  v.  Fennel, 
10  B.  &  C.  671  ;  Alexander  v.  Barker,  2 
Cr.  &  J.  133,  138  ;  Robson  v.  Drunimond, 
2  B.  &  Ad.  303,  307,  308,  per  Parke  and 
Littledale,  JJ.  ;  Stacy  v.  Decey,  2  Esp. 
169,  n.  ;  Skinner  v.  Stocks,  4  B.  &  AhL 
437  ;  Garrett  v.  Handley,  4  B.  &  C.  664  ; 
Curtis  V.  Belknap,  21  Vt.  433  ;  Creel  v. 
Bell,  2  J.  J.  Marsh.  309 ;  Pitts  v.  Mower, 
18  Me.  361  ;  Story  on  Agency,  §  160,  and 
cases  cited  ;  Halliday  v.  Doggett,  6  Pick. 
359;  Ward  y.  Levis'ton,  7  Blackf.  466; 
Edmund  v.  Caldwell,  15  Me.  340.  But 
the  party  for  whose  benefit  the  contract 
was  made  must  also  be  the  one  from  whom 
the  consideration  moves,  or  he  can  main- 
tain no  action,  Mellen  v.  Whi])ple,  1 
Gray,  317,  321,  322  ;  Colburn  v.  I'hillips, 
13  Gray,  64,  66  ;  with  one  or  two  well- 
defined  exceptions,  Id. 


318  THE    LAW    OF    PARTNERSHIP.  [CH.    IX, 

But  where  a  written  but  not  sealed  contract  is  entered  into 
with  one  partner,  it  not  appearing  on  the  face  of  the  contract 
that  he  was  acting  on  behalf  of  the  firm,  he  may  sue  alone,  on 
that  contract.  In  such  a  case,  the  action  may  be  maintained 
either  in  the  name  of  the  person  with  whom  alone  the  contract 
was  ostensibly  made,  or  in  that  of  the  parties  who  can  be  shown 
to  be  really  interested,  (w) 

§  239.  Contracts  of  Insurance.  —  Partnersliip  contracts  for 
insurance  are  governed  by  the  same  rule,  that  those,  and  only 
those,  by  whom  the  bargain  is  made  can  sue  upon  it,  excepting  so 
far  as  the  rule  is  modified  by  the  law  of  insurance,  which,  under 
certain  circumstances,  permits  persons  by  whose  authority  and 
for  whose  benefit  a  policy  is  made,  to  sue,  although  their  names 
are  not  mentioned,  (o)  By  that  law,  the  persons  named  in  the 
policy  may  sue,  and  they  alone  can  sue,  unless  the  policy  is  made 
"  for  all  whom  it  may  concern,"  or  contains  other  general  words 
of  equivalent  import,  (p)  The  reason  of  this  is,  that  the  insurers 
are  entitled  to  know  whom  they  insure,  or  else  to  know  that  they 
insure  unknown  persons,  that  they  may  make  their  terms  accord- 
ingly, (q)  An  insurance  by  one  partner  in  his  own  name  and 
without  general  words,  although  on  property  belonging  to  the 
firm,  covers  only  his  interest,  and  the  firm  cannot  maintain  an 
action  on  such  a  policy,  (r)  Whether  the  partner  insured,  in  an 
action  for  the  whole  loss,  averring  in  his  declaration  an  entire 
interest,  can  upon  proof  of  the  firm  ownership  recover  any  thing, 
and,  if  any  thing,  whether  his  ^^ro  rata  share  only,  or  the  whole, 
has  been  variously  decided.  Some  of  the  cases,  including  a  deci- 
sion of  the  United  States  Supreme  Court,  given  by  Marshall,  C.  J., 
which  is  entitled  to  the  highest  respect,  holding  that  lie  cannot 
recover  at  all ;  (s)  others,  that  he  may  to  the  extent  of  his  interest 


(9i)  Curtis   V.    Belknap,    21    Vt.    433.  Ins.  §  20  ;  Graves  r.  Boston  M.  Ins.  Co.,  2 

And  see  Skinner  v.  Stocks,  4  B.  &  Aid.  Cranch,  419. 

437  ;  Cothay  v.  Fennell,  10  B.  &  C.  671  ;  (q)   Dumas  v.  Jones,  4  Mass.  647. 

perLittledale,  J.,in  Robson  f.  Drummond,  (r)  Graves  v-   Boston  M.    Ins.   Co.,  2 

2  B.  &  Ad.  303;  Phillips  i>.  Peunywit,  1  Cranch,   419;   Pearson   v.   Lord,  6  Mass. 

Ark.  59.  81  ;  Turner  v.  Burrows,  5  Wend.  541.  See 

(o)  Grove  v.    Dubois,    1    T.    R.    112;  also  Bell  v,  Ansley,  16  East,  141  ;  Hibbert 

Cumining  v.   Forrester,   1    M.    &  S.  497  ;  v.    Martin,     1    Camp.     538  ;    Cohen     y. 

Hagedorn  r.  Oliverson,  2  M.  &  S.  426  ;  2  Hannam,    5    Taunt.    101  ;    Lawrence    v. 

Pars,  on  Maritime  Law,  29,  and  note  3.  Sebor,  2  Caines,  203. 

(p)  Finney  v.  Bedford  Coin.  Ins.   Co.,  (s)  In  Graves  v.  Boston  M.   Ins.   Co., 

8  Met.  348  ;  Turner  v.  Burrows,  5  Wend.  2  Cranch,  419,  it  was  held,  that  a  partner 

541  ;  Jefferson  Ins.  Co.  v.  Cotheal,  7  Wend,  insuring  for  an  individual  and  entire  in- 

72  ;  Finney  v.  Warren  Ins.  Co.,  1  Met.  16  ;  terest  can  recover  nothing,  but  must  suffer 

1  Phillips  on  Ins.  §§  391,  392;  2  Duer  on  a  nonsuit,   on  its  appearing  that  he  was 


§  241.]      OP   REMEDIES    BY   PARTNERS    AGAINST   THIRD   PARTIES.       319 

as  a  partner ;  (t)  and  others  still,  that  he  may  recover  the  whole 
loss,  (u) 

§  240.  Novation.  —  There  is  no  doubt  that  a  contract  made 
with  a  firm,  and  therefore  with  all  the  members  of  a  firm,  may 
be  exchanged  for  any  other  by  the  act  or  consent  of  all  the  par^ 
tics.  Thus,  a  sale  is  made  to  a  firm,  who  owe  for  it.  But  the 
merchandise  is  transferred  by  the  firm  to  one  partner,  who  agrees 
to  pay  for  it.  By  this  alone  the  obligation  of  all  the  partners  is 
not  in  the  slightest  degree  affected.  But  if  the  seller,  upon  being 
applied  to,  consents  to  the  arrangement,  and  agrees  to  discharge 
the  firm  and  take  this  partner  alone  as  his  debtor,  the  arrange- 
ment would  be  valid  in  law,  although  some  doubt  might  arise 
from  the  fact  that,  as  this  partner  was  already  bound  with  all  the 
rest,  his  new  promise  is  no  consideration  for  the  discharge  of  the 
rest.  By  the  principle  of  novation,  if  the  new  debtor  is  altogether 
a  new  person,  his  promise  is  sufficient  consideration  ;  and,  as  the 
separate  promise  of  a  partner  would  bind  his  separate  property  to 
this  debt  (we  shall  presently  consider  the  question  whether  part- 
nership debtors  can  claim  any  of  the  private  property  of  partners 
until  their  private  debts  are  discharged),  we  should  incline  to 
believe  that  this  would  be  consideration  enough.  (?/') 

Where  no  objection  of  this  kind  comes  in,  it  is  certain  that  such 
a  transfer  would  be  effectual  ;  (x)  as  if  a  sale  were  made  by  a  firm 
and  the  debts  transferred  to  one  partner,  and  the  debtor,  being 
discharged  by  the  other  partners,  agreed  to  pay  that  one  ;  (i/)  or 
if  a  guaranty  were  made  to  a  firm,  and  transferred  to  one  part- 
ner ;  or  made  to  one  partner,  and  by  him  transferred  to  a  firm  ; 
and  the  guarantor,  for  any  sufficient  consideration,  agreed  to  the 
transfer. 

§  241.  Remedies  for  Torts.  —  It  is  plain  that  there  may  be  torts 
against  a  firm  jointly,  as  well  as  against  any  or  all  the  partners. 
And  there  is  no  reason  why  the  firm  may  not  as  such  sue  the 


only  jointly  interested  in  the   property  ;  (u)  In  Horn  v.  Clarkson,  1  Caines,  276, 

the  loss  being  a  joint  one,  which  he  could  and  Lawrence  v.  Sebor,  2  Caines,  203,  the 

neither  insure  nor  recover  for  separately,  courts  admit  a  recovery  in  such  case  for 

either  in  whole  or  jiro  rata.     The  same  the  entire  value  insured.     [For  the  effect 

doctrine  is  held  in  Cohen  v.  Hannam,  5  upon  a  policy  of  insurance  on  partnership 

Taunt.  101,  denying  the  authority  of  Page  property  of  a  transfer  of  a  partner's  in- 

V.  Fry,  2  B.  &  P.  240.  terest,  see  ante,  §  180.] 

(t)  Dumas   v.    Jones,     i    Mass.    647  ;  (w)  See  niite,  §  235,  note  {p)  ;  note  (y). 

Turner  v.  Barrows,  5  Wend.  541  ;  Page  v.  (x)  See  aiite,  §  235,  note  {p). 

Fry,  2  B.  &  P.   240;  Irving  v.  Excelsior  (?/)  Cook  v.  Beech,  10  Humph.   412; 

Fire  Ins.  Co.,   1  Bosw.   507  ;    Murray  v.  Degroot  t:  D.uby,  7  Rich.  117  ;  Howell  r. 

Col.  Ins.  Co.,  11  Johns.  302,  311.  Reynolds,  12  .\la.  128. 


320 


THE   LAW   OP   PAETNERSHIP. 


[CH.    IX. 


wrong-doer  at  law.  {z)  But  the  rule  would  doubtless  be  strictly 
applied,  that  damages  could  be  recovered  only  for  the  joint  injury 
sustained,  {a)  Thus  an  action  would  lie  for  seducing  away  one 
in  their  employ,  (5)  for  turning  any  business  from  them  by  fraud 
and  falsehood,  or  for  any  fraud  against  the  whole  firm,  or  for 
slander  of  them  as  merchants,  (c)  or  for  conversion  of  tbe  pro- 
perty of  the  lirm  ;  {d)  or,  indeed,  for  any  injury  wrongfully  inflicted, 
whether  by  negligence  or  with  wrongful  intent,  (e)  So,  too,  if  an 
injury  affected  two  or  more  members  of  a  firm  jointly,  and  not 
the  rest,  those  who  were  jointly  injured  could  sue  jointly.  (/)^ 


(z)  Addison  v.  Overend,  6  T.  R.  766  ; 
Cabell  V.  Vaughau,  1  Wms.  Sauiid.  291, 
m.  and  notes  ;  Glover  v.  Austin,  6  Pick. 
209  ;  Bloxani  v.  Hubbard,  5  East,  407 ; 
Cooke  V.  Baeliellor,  3  B.  &  P.  150  ;  Foster 
V.  Lawson,  3  Bing.  452  ;  Ta3'lory.  Church, 
8  N.  Y.  452,  1  E.  D.  Smith,  479  ;  Sewall 
V.  Catlin,  3  Wend.  291  ;  Patten  v.  Gurney, 
17  Mass.  186,  followed  in  Medbury  v. 
Watson,  6  Met.  246,  257,  258.  A  dormant 
partner  may  join  in  trover.  Robinson  v. 
Mansfield,  13  Pick.  139.  The  rule  is  often 
laid  down  that  partners  may  join  in  an 
action  ex  delicto  for  an  injury  affecting 
their  joint  interest.  Best,  J.,  in  Foster  v. 
Lawson,  3  Bing.  455.  It  is  more  correct 
to  say  that  they  must.  Patten  v.  Gurney, 
17  Mass.  185  ;  cases  cited  supra ;  Ward  v. 
Brampston,  3  Lev.  362.  If  they  do  not 
join,  it  can,  however,  only  be  taken  ad- 
vantage of  by  plea  in  abatement.  Deal  v. 
Bogue,  20  Pa.  228  ;  Gibson  v.  Stevens,  7 
N.  H.  352,  358  ;  1  Chitty  PI.  65  ;  Gow  on 
Part.  136  ;  Pickering  v.  Pickering,  11  N. 
H.  141  ;  Nightingale  v.  Scammell,  6  Cal. 
506  ;  Anonymou.s,  W.  Jones,  253.  Or  the 
court  may  abate  the  writ  ex  officio.  Hart 
V.  Fitzgerald,  2  Mass.  509. 

(a)  Barratt  v.  Collins,  10  J.  B.  Moore, 
446  ;  Haythorn  v.  Lawson,  3  C.  &  P.  196 ; 
Pechell  V.  Watson,  8  M,  &  W.  691.  Thus 
in  Garland  v.  Noble,  1  J.  B.  Moore,  187, 
it  was  held,  that  on  a  submission  to  arbi- 
tration of  all  matters  in  dispute  between  a 
partnership  and  an  individual,  only  the 
joint  claims  of  the  firm  were  in  issue.  The 
same  was  the  case  in  Barratt  v.  Collins, 
siipra.  See  the  cases  in  note  (h),  infra. 


(h)  Story  on  Part.  §  258. 

(c)  Lewis  V.  Cliapnian,  19  Barb.  252, 
where  a  jjostscript  to  a  letter  saying  ^^con- 
fidential ;  had  to  hold  over  a  few  days  for 
the  accommodation  of  L.  &  H.,"  was  held 
libellous  if  false,  when  addressed  to  the 
creditors  of  L.  &  H.  ;  but  held  in  the 
Court  of  A])peals  to  be  for  the  jury  to  de- 
termine as  a  question  of  interest,  16  N.  Y. 
369 ;  Foster  v.  Lawson,  3  Bing.  452  ; 
Cooke  V.  Bachellor,  3  B.  &  P.  150} 
Sewall  V.  Catlin,  3  Wend.  291  ;  Haythorn 
V.  Lawson,  3  C.  &  P.  196  ;  Bumage  v. 
Prosser,  4  B.  &  C.  247  ;  Williams  v. 
Beaumont,  10  Bing.  270;  Taylor  w.  Church, 
1  E.  D.  Smith,  279,  8  N.  Y.  452;  Le 
Fanu  V.  Malcomson,  1  H.  L.  Cas.  637.  In 
this  last  case,  a  charge  of  cruelty  to 
employes  was  held  an  injury  to  the  firm 
in  their  trade,  for  which  they  could  sue 
jointly.  See  also  Davis  v.  Davis,  1  Nott  & 
McC.  290  ;  Backus  v.  Richardson,  5  Johns. 
483,  485  ;  Ware  v.  Clowny,  24  Ala.  707 ; 
Babonneau  v.  Farrell,  15  C.  B.  360. 

{d)  In  trover  or  trespass  for  injuries  to 
the  joint  property,  the  partners  can  (and 
must)  join.  Wilson  v.  Comine,  2  Johns. 
280  ;  Patten  v.  Gurney,  17  Mass.  185,  187, 
per  Parker,  C.  J.,  ;  Glover  r.  Austin,  6 
Pick.  209. 

(p)  Weller  v.  Baker,  2  Wils.  414, 
423 ;  Patten  v.  Gurney,  17  Mass.  185  ; 
Medbury  v.  Watson,  6  Met.  257,  258. 
Thus  case  lies  by  a  firm  against  an  officer 
if  he  improperly  give  up  property  attached 
at  their  suit.  Commercial  Bank  v.  Wil- 
kins,  9  Me.  28. 

(/)    This   question   seems   most  gen- 


1  One  partner  cannot  sue  individually  for  a  tort  which  causes  injury  to  the  firm 
business.  Bigelow  v.  Reynolds,  68  Mich.  344,  36  N.  W.  95.  And  where  a  firm  sues 
for  a  tort,  for  instance  a  libel,  committed  upon  it,  the  damages  recovered  can  only  be 


§  242. j     OF  re:medies  by  partxkus  a(;alnst  third  parties.     32i 


§  242.  Damages  Recoverable.  —  It  might  not  always  be  easy  to 
draw  the  line  between  dainages,  which  wei-e  recoverable  in  such 
an  action,  because  they  were  joint,  and  those  which  were  not 
recoverable,  because  they  were  not  joint.  (//)  Thus,  if  a  libel 
charged  insolvency  or  dishonesty  upon  any  one  partner,  he,  of 
course  could  sue  ;  but,  in  strict  law,  he  could  not  recover  in  this 
several  suit  for  any  damage  done  to  the  firm  of  which  he  was  a 
member,  and  not  even,  we  should  say,  for  his  share  of  this 
damage.  For  this  the  firm  must  sue,  and,  in  this  suit,  they  could 
recover  only  for  the  damage  all  sustained  jointly,  (h) 


eially  to  have  arisen  where  the  joint  prop- 
erty has  been  seized  or  sold  and  delivered, 
on  execution  against  one  partner,  for  his 
separate  debt.  In  fact,  it  would  seldom 
arise  in  any  other  way,  except  perhaps  in 
the  case  of  collusion  between  one  partner 
and  some  third  party,  to  slander  or  de- 
fraud the  firm  ;  since  the  injury,  to  admit 
of  a  joint  action  as  partners  by  two  or 
more  members  of  the  firm  to  the  exclusion 
of  another  member,  must  touch  them  in 
their  i)artnership  property  or  interest  in 
that  property,  and  yet  not  aflect  the  ex- 
cluded partner,  by  reason  of  the  act  by 
which  the  injury  is  caused  being  justifiable 
as  to  him,  or  one  for  which  he  is  respon- 
sible. In  many  of  the  States,  it  is  held, 
that  the  sheriff  may  seize,  and  deliver  to 
the  ])urchaser  the  specific  property  of  the 
firm,  and  that  the  ]iurchaser  thereby  be- 
comes tenant  in  common  with  the  other 
partners  of  that  property  :  as  in  Maine, 
New  York,  Alabama,  Iowa,  Illinois,  North 
Carolina,  Texas,  Michigan,  Ohio,  New 
Jersey.  So  in  England  ;  but  see  next 
chapter.  In  case,  therefore,  the  purchaser 
should  undertake  to  convert  the  property 
by  a  destruction  o*"  it,  or,  as  is  held  in 
some  courts,  by  a  sale,  trover  would  lie 
against  him,  as  against  any  tenant  in 
common,  by  the  other  partners  excluding 
the  debtor  partner.  Wilson  v.  Reed,  3 
Johns.  175  ;  Mayhew  v.  Herrick,  7  C.  B. 
229,  per  Maule  and  Cressweli,  JJ.  ;  White 
V.  Osborne,  21  Wend.  72  ;  Hyde  v.  Stone, 
7  Wend.  354. 

{a)  In  trover  by  one  partner  against  a 


sheriff  who  has  sold  the  whole  property  on 
a  levy,  for  the  separate  debt  of  the  copart- 
ner, in  the  absence  of  precise  proof  of  liis 
interest  the  partner  may  recover  a  moiety, 
Walsh  V.  Adams,  3  Denio,  125  ;  Deal  v. 
Bogue,  20  Pa.  228  ;  or  the  proportion  of 
his  oiigiiial  interest  in  the  goods  if  this 
appear.  Deal  v.  Bogue,  20  Pa.  228. 

(h)  One  jiartner  can  recover  for  a  libel 
on  him  in  the  way  of  his  trade,  although 
the  libel  also  affects  the  firm.  Harri- 
son Bevington,  8  C.  &  P.  708  ;  Rob- 
inson V.  Marchant,  7  Q.  B.  918  ;  and  even 
though  the  firm  has  already  recovered  for 
its  injury  through  the  same  libel.  Taylor 
!.'.  Church,  1  E.  D.  Smith,  279.  See  Le 
Fanu  V  Makomson,  1  H.  L.  Cas.  637, 
where  the  libel  referred  to  occur- 
rences "  in  some  of  the  Irish  factories," 
and  the  plaintiff  was  allowed  by  innuendo 
to  show  that  this  was  applied  to  himself, 
though  his  name  did  not  appear  therein. 
The  (juestion  of  damages  being  one  for  the 
jur\',  it  was  intimated  by  Coleridge,  J., 
that  where  on  the  face  of  the  declaration 
the  damage  is  partly  joint,  and  partly 
several,  the  course  in  such  a  case  would 
be  to  limit  the  proof  at  the'  trial.  Robin- 
son V.  Marchant,  7  Q.  B.  923  ;  Taylor  v. 
Church,  1  E.  D.  Smith,  279,  affirmed  on 
error,  8  N.  Y.  452;  Foster  i\  Lawson,  3 
Bing.  452.  Perhaps  the  doctrine  on  this 
subject  may  be  briefly  stated  thus  :  An  ac- 
tion on  such  libel,  either  by  the  firm,  or  the 
single  partner,  or  by  both,  will  lie  ;  both 
may  declare  without  proof  of  special  dam- 
age, and  the  jury  will  be  presumed  to  have 


for  injury  to  the  firm  business.  Nothing  can  be  recovered  for  injury  to  the  feelings  of 
the  partners.  Donaghue  v.  Gaffy,  53  Conn.  43,  2  Atl.  397.  The  firm  may  sue  and 
recover  damages  suffered  by  it  by  reason  of  a  wrongful  attachment  of  its  proj)erty. 
Watts  V.  Rice,  75  Ala.  289. 

21 


g22  THE    LAW    OF    PARTNERSHIP.  [CH.    IX 

Possibly  the  principle  of  exemplary  damages,  which,  although 
called  in  question  by  high  authority,  is,  we  thiiiic,  certainly  admis- 
sible in  some  actions  for  tort,  and,  possibly  in  all,  might  come  in 
aid  of  the  plaintiff,  and  help  to  remove  the  difficulty,  {i)  If  a 
third  person  colluded  with  a  partner  to  defraud  the  firm,  there 
would  be  very  great  difficulty  in  permitting  the  whole  firm, 
including  the  fraudulent  partner,  to  sue  this  third  person  ;  and, 
also,  some  difficulty  in  maintaining  a  suit  by  the  other  partners 
for  the  damage  done  to  the  firm,  (j)  This  latter  action,  however, 
has  been  sustained,  and  we  have  no  authority  for  supposing  the 
former  maintainable.  But  what  damages  could  be  recovered  in 
such  an  action,  whether  all  that  the  firm  sustained,  or  only  the 
proportion  of  the  suing  partners,  we  are  not  informed,  (k)  We 
should  have  said,  that  an  action,  by  all  the  partners,  including  the 
fraudulent  partner,  and  using  his  name  only  for  the  benefit  of  the 
innocent  partners,  and  recovering,  therefoi-e,  only  the  share  of 
damage  sustained  by  the  innocent  partners,  (Z)  might  have  satis- 
fied the  justice  of  the  case,  and  the  technical  rules  of  law,  quite  as 

well. 

§  243.  Equitable  Relief. — We  know  nothing  in  the  law  of  partner- 
ship which  limits  the  power  of  equity  in  giving  the  partnership  re- 
lief against  third  parties.  We  mean,  that  in  all  cases  of  this  kind, 
the  same  reasons  for  giving  relief  would  be  required,  and  the  same 
selection  of  remedy,  whether  by  injunction,  discovery,  specific  per- 
formance, or  otherwise  as  in  similar  cases  which  did  not  concern 
partnership,  (m)     There    is,   however,  one   question    which    has 

confined  themselves  to  the  injury  of  the  one  of  its  members  for  injury  to  their  real 

party  plaintiff.     If  they  allege  special  dam-  or  personal  property,   and  for  all  wrongs 

age,  the  proof  will  be  limited  at  the  trial,  done  to  them." 

If  the  libel    be  such  that   the  respective  (k)   By  the  analogy  of  cases  in  trover 

injury  cannot  be  distinguished,  the  defect  against   sheriffs    for    sales   of  the   entire 

mustbe  specially  demurred  to.      Injuries,  property  of  the  firm,  it  would  seem  that 

however,  to  the  j.ersonal  ieelings  cannot  of  the  extent  of  the  recovery  might  be  for  the 

course  be  included  in  a  joint  suit  by  the  shares  of  the  innocent  partners.       But  as 

firm.    Haythorne  v.  Lawson,  3  C.  &  P.  196.  the  defendant  is  guilty  of  acquisition  of  the 

(i)  Taylor  v.  Church,   1  E.  D.  Smith,  property  by  a  fraud,   though  against  the 

279,  8  N.  Y.  452,  and  cases  cited  ;  and  plaintiffs  only,  this  would  perhaps  estop 

see    Lewis    v.   Chapman,    19   Barb.    25'2.  tim   from    claiming   any  property  there- 

Also,  see  Symonds  v.  Carter,   32   N.   H.  under ;  for  the  law  would  not  permit  him 

458  ;  Cramer  v.  Noonan,  4  Wis.  231 ;  Fry  to  divide  his  own  fraud. 
V.  Bennett,  4  Duer,  247.  V)  See  the  preceding  note. 

(j)  Longman  v.  Pole,  Moody  &  M.  223.  {m)  Hood  v.  Aston,  1  Russ.  416  ;  Jer- 

In  the  Metropolitan  Saloon  Omnibus  Co.  vis  v.  White,  7  Ves.  413  ;  Motley  v.  Doun- 

V.  Hawkins,  4  H.  &  N.  87,  92,   Longman  man,  3  Mylne  &  Cr.  1  ;  Knott  v.  Morgan, 

V.    Pole  was  cited  and  affirmed  ;    and   it  2  Keen,  213  ;    Small  v.   Atwood,  Younge, 

was  even  said  by  Watson,  B.  :  "  But  it  is  456  ;  Fenn  i'.  Craig,  3  Younge  &  C.  216  ; 

clear  that  an  ordinary  partnership  would  Clay  v.  Rufford,  8  Hare,  281 ;  Douglas  V, 

have  a  right  to  maintain  an  action  against  Horsfall,  2  Sim..  &  S.  184. 


§  243.]       OF   REMEDIES    BY   PARTNERS    AGAINST   THIRD    PARTIES.      323 

arisen,  where  a  partnership  has  prayed  for  an  injunction,  to  prevent 
a  several  creditor  of  a  partner  from  interfering  with  the  partner- 
ship property,  which  comes  up  as  a  question  of  the  remedies  of 
partnerships  against  third  persons.  It  is,  in  fact,  however,  a  ques- 
tion as  to  the  riglits  and  remedies  of  third  persons  against  the 
partnership  ;  and  this  general  subject  we  will  not  proceed  to 
consider,  adding  only  to  this  section,  that  where  the  partnership 
is  itself  illegal,  or  where  the  action  or  the  object  of  the  action  is 
illegal,  no  suit  can  be  maintained  by  a  partnership,  any  more, 
than  it  could  be  by  an  individual,  under  the  same  circumstan- 
ces, (w)  It  has,  however,  been  held  that,  when  one  partner  seeks 
in  equity  a  settlement  of  the  partnership,  the  fact  that  the  firm 
was  established  for  a  fraudulent  purpose  is  no  defence,  (ww)  But 
this  is  not  certain. 

{ri)  Biggs  V.  Lawrence,  3  T.  R.  454,  (nn)  Harvey  v.  Varney,  98  Mass.  118  ; 

where  the  partnership  was  formed  for  but  see  Sampson  v.  Shaw,  101  Miiss.  145. 
smuggling. 


324  THE   LAW    OF    PARTNERSHIP.  [CH.    X. 


CHAPTER  X. 

OF  THE    REMEDIES  OF  THIRD   PERSONS  AGAINST  THE   PARTNERSHIP  AND 
AGAINST    PARTNERS. 

§  244.  Appropriation  of  the  Property  to  the  Debts. — The  reme- 
dies of  third  parties  against  the  firm  and  its  members  are  gener- 
ally the  same  as  those  which  exist  in  relation  to  individuals. 
Similar  actions  at  law,  and  similar  suits  in  equity,  with  such  va- 
riation as  the  nature  of  the  case  suggests  and  requires;  similar 
attacliment,  whether  direct  or  foreign  attachment,  or  garnishee 
process,  and  similar  levy  and  execution  ;  but  always  subject  to  one 
modification  or  exception,  which  has  caused  much  conflict  and  un- 
certainty in  practice,  and  of  which  all  the  effects  and  all  the  rules 
are  not  yet  determined.  This  exception  arises  from  the  fact  that 
there  may  be  creditors  of  the  partnership,  and  creditors  of  the  sev- 
eral partners ;  and  the  rights  and  claims  of  these  two  classes  of 
creditors  are  conflicting. 

In  the  days  of  Salkeld  and  Loi-d  Raymond,  one  hundred  and 
fifty  years  ago,  the  extreme  inadequacy  and  incompleteness  of 
the  law  of  partnership  are  proved  by  the  fact,  that  a  creditor  of  a 
partner  got  at  once  by  execution  the  share  of  the  indebted  partner 
in  the  partnership  property.  If  there  were  two  partners,  —  and  nt 
that  time  it  would  seem  that  there  were  seldom  more,  —  a  cred- 
itor of  one  got  judgment  and  execution  against  him,  and  levied  it 
upon  the  partnership  property,  of  which  the  sheriff  (although  he 
seized  the  whole)  sold  one-half.  If  there  Avere  three,  he  sold  one- 
third  :  if  four,  one-quarter,  (a)  The  progress  of  the  change  is  not 
very  distinctly  exhibited  in  the  reports ;  but  it  began  early,  (/>) 

(«)  Heyden  v.   Heyclpii,  1  Salk.   392  ;  account  was  taken  on  a  reference  before  a 

Jacliy    V.    Butler,    2    Ld.     Raym.    871  ;  Master  in  Chancery.     But  in    Parker  v. 

Mariott  v.  Shaw,  Comyn,  277  ;  Bachurst  Pister,  3  B.  &  P.  288  ;  Chapman  v.  Koops, 

V.  Clinkard,  1  Show.  169.  3  B.  &  P.  289,  this  equitable  process  by  a 

(b)  It  seems  to  have  been  received  in  court  of  law  was  emphatically  refused  by 

the  time  of  Lord  Mansfield.      In   Fox  v.  Lord  Alvanly.      See  the    history  of  the 

Hanbury,    Cowp.    445,    the   sale    by   the  change,  examined  in  Ex  parte  Smith,  16 

sheriff  was  limited  to  the  share  of  the  part-  Johns.  102,  note;  3  Kent  Comni.  65,  note 

ner  after  the  settlement  of  all  the  partner-  (a)  ;  Am.  Jur.,  Oct.  1841,  art.  3. 
ship  accounts  ;    to    ascertain    which,    an 


§  215.]  OF    THE    REMEDIES    OF    THIRD    PERSONS.  325 

find  it  has  loii<^  since  been  the  well-cstablislicd  rule  and  practice, 
that  no  private  creditor  of  a  partner  could  take,  Ijy  his  execution, 
any  thing  more  than  that  partner's  share  in  whatever  surplus  re- 
mained after  the  partnership  effects  had  paid  the  partnership 
deljts.(6') 

§  245.  Nature  of  Interest  of  Partnership  in  its  Property.  —  There 
are  two  entirely  distinct,  and  indeed  oi)posite,  ways  of  viewing  a 
commercial  partnership.  One  of  them  regards  it  as  a  modified 
tenancy  in  common ;  the  other  regards  it  as  a  modified  corpora- 
tion. It  is  certain  that  a  partnership  is  neither  a  tenancy  in  com- 
mon nor  a  corporation  ;  and  it  is  equally  certain  that  it  has  some 
of  the  attributes  and  qualities  of  each  of  these  forms  of  joint  own^ 
ership.  The  question,  which  lies  at  the  bottom  of  the  difficulties 
presented  by  our  present  topic,  seems  to  us  to  be  this  :  Which  of 
these  two  things  does  partnership  most  nearly  approach? 

Exactly  so  far  as  a  partnership  is  a  tenancy  in  common,  it  has  no 
existence  as  a  body  by  itself,  and  has  no  property,  and  no  debts 
or  creditors.  Just  so  far  as  it  is  a  corporation,  it  has  an  indei)cn- 
dent  existence,  and  its  own  property,  and  its  own  debts.  And 
precisely,  as  in  recent  times  it  has  been  found  necessary,  in  this 
country,  where  so  much  business  is  done  by  corporations  to  impart 
to  corporations  many  of  the  qualities  of  partnership  ;  and  just  as 
during  the  difficult  and  tedious  process  of  adjusting  this  new  con- 
dition of  joint  ownership  and  joint  action,  many  mistakes  were 
made  and  much  mischief  dune,  until  the  just  medium  was  found, 
and  the  reconciling  principle  which  best  protects  the  interests  of 
all  concerned  ;  so,  in  reference  to  partnership,  we  apprehend  that 
mischief  has  been  caused  by  the  difficulty  of  adjusting  its  true 
relation  to  a  corporation,  or,  in  other  words,  in  determining  the 
degree  in  which  the  law  will  acknowledge  a  voluntary  mercantile 


(c)  Washburn  v.  Bank  of  Bellows  Falls,  31  N.  H.  292  ;  Church  v.  Knox,  2  Conn. 
21  Vt.  278,  284  ;  Matlock  v.  Matlock,  5  523  ;  Witter  v.  Richards,  10  Conn.  41  ; 
Ind.  403  ;  Andrews  v.  Keith,  34  Ala,  722 ;  Tilley  v.  Phelps,  18  Conn.  294  ;  Eiee  v. 
Rodriguez  v.  Hetfernan,  5  Johns.  Ch.  417;  Au.stin,  17  Mass.  206;  Brewster  v.  Ham- 
Murray  V.  JVIurray,  5  Johns.  Ch.  60  ;  Del-  mitt,  4  Conn.  540  ;  Smith  v.  Barker,  10 
monico  v.  Guillaume,  2  Sandf.  Ch.  366  ;  Me.  458  ;  Commercial  Bank  v.  Wilkins, 
Smith  V.  Jackson,  2  Edw.  Ch.  28 ;  U.  S.  9  Me.  38  ;  Douglas  v.  Winslow,  20  Me. 
V.  Hack,  8  Pet.  275  ;  Moody  v.  Payne,  2  89  ;  Doner  v.  Stauffer,  1  Barr,  198  ;  Deal 
Johns.  Ch.  548  ;  £'xjD«rte  Smith,  16  Johns,  v.  Bogue,  20  Pa.  228;  Greene  v.  Greene, 
102  ;  Walsh  v.  Adams,  3  Denio,  12.^> ;  Lyn-  1  Ohio,  244  ;  Place  v.  Sweetzer,  16  Ohio, 
don  V.  Gorham,  1  Gall.  367  ;  Tappan  v.  142  ;  Sutcliffe  v.  Dohrman,  18  Ohio,  181  ; 
Blaisdell,  5  N.  H.  193,  per  Richardson,  C.  Winsten  i;.  Ewing,  1  Ala.  29  ;  Lucas  v. 
J.  ;  Gibson  v.  Stevens,  7  N.  H.  352;  Mor-  Laws,  27  Pa.  211  ;  Hubbard  v.  Curtis,  8 
rison  v.  Blodgett,  8  N  H.  244,  254  ;  New-  Iowa,  1,  14  :  Ridgway  v.  Clare,  19  Beav. 
man  v.  Bean,  21  N.  H.  93 ,  Hill  v.  Wiggin,  11  ;  Ross  v.  Henderson,  77  N.  C.  170. 


326  THE   LAW    OP    PARTNERSHIP.  [CH.    X. 

partnership  as  a  quad  independent  body,  and  the  consequences 
which  it  will  derive  from  this  acknowledgment. 

We  have  no  doubt  whatever  that  the  rule  (now,  as  has  been 
said,  perfectly  established),  which  shuts  out  the  creditors  of  the 
several  partners  from  the  partnership  i)ruperty,  until  that  has  paid 
the  partnership  debts,  is  derived  directly  from  this  acknowledg- 
ment ;  and  it  would  seem  to  be  an  inevitable  consequence  of  any 
recognition  of  a  partnership  as  a  body  by  itself,  having  its  own 
creditors  and  its  own  effects  ;  and  we  are  also  confident  that  most 
of  the  difficulties  which  still  embarrass  this  subject  will  be  removed 
by  a  more  distinct  recognition,  and  more  direct  application,  of  the 
same  principle. 

§  246.  Theory  of  Lieu  of  Creditors  ou  Partnership  Property.  —  Not 
many  years  since,  there  began,  —  perhaps  not  with  Lord  Eldon, 
but  confirmed  by  him,(6?)  —  a  way  of  explaining  the  rights  and 
determining  the  remedies  of  partners,  by  supposing  a  kind  of  lien 
on  the  partnership  property,  by  the  partners,  and  a  kind  of  lien 
by  the  creditors  on  the  partners'  lien.  This  is  not  the  language 
used  ;  but,  it  is  said,  that  partners  have  a  lien  on  the  property  for 
the  payment  of  the  debts,  and  that  creditors  have  a  quasi  lien,  and 
by  means  of  this,  and  through  the  lien  of  the  partners,  they 
worked  out  their  effectual  remedy  against  the  property,  (e) 


{(i)     Lord  Hardwicke  held  that  a  part-  that  deficiency  according  to  their  propor- 

ner,  or  his  representatives,  had  a  specific  tions.    But  while  they  remain  solvent,  nnd 

lien  upon  the    partnership  stock    for  his  the  partnership  is  going  on,  the  creditor  has 

surplus.     West  w.  Skiji,  1  Ves.  Sen.  239.  no  equity  against  the  effects  of  the  parlner- 

See  Dodington  v.  Hallett,  1  Ves.  Sen.  498,  ship."     "  But  still,  in  either  of  these  cases 

499  ;    by  Lord  EUlon,  in  Ex  parte  Younge,  [dissolution  by  efHux  of  time,  the  death 

2  Ves.  &  B.  242,  because  the  parties  were  of  one  partner,  the  bankruptcy  of  one,  or 

part-owners  and   not  partners.     The  the-  by  dry,  naked  agreement],  the  community 

ory,  as  upheld  by  later  authorities,  is  un-  of  interest  remains ;  that  is  necessary,  until 

doubtedly  founded  on  the  remarks  of  Lord  the   affairs   are  wound  up  ;  and  that  re- 

Eldon,  in  Ex  parte  Ruffin,  6  Ves.  119,  fol-  quires  that  what  was  partnership  propertv 

lowed  by  Ex  parte  Williams,   11   Ves.  4.  before  shall  continue,  for  the  purposes  of 

In  the  latter  case,   he  said:  "I  have  fre-  a  distribution, —  not  as  the  rights  of  the 

quently,  since   I  decided  the  case  of  Ex  creditors,  but  as  the  rights  of  the  partners 

parte  Ruffin,  considered  it,  and  I  approve  themselves,   require.     And  it   is  through 

of  that  decision."    "  The  grounds  on  which  the  fiperation  of  administering  the  equities, 

I  went   in   Ex  parte   Ruffin  were  these :  as  between   the  pnrtners  themselves,  that 

Among    partners   clear    equities    subsist,  the  creditors  have  that  opportunity  ;  as, 

amounting  to  something  like  a  lien.     The  in  the  case  of  death,  it  is  the  equity  of  the 

property  is  joint ;  the  debts  and  credits  deceased  partner  tliat  enables  the  creditors 

are  jointly  due.     They  have   equities  to  to  bring  forward  the  distribution."     Also, 

discharge  each  of  them  from  liability,  and  Ex  parte  Kowlandson,  2  Ves.  &  B.   173  ; 

then  to  divide  the  surplus  according  to  Ex  parte  Fell,  10  Ves.  348.     See  Conwell 

their  proportions ;  or,  if  there  is  a  defici-  v.  Sandidge,  8  Dnna,  278,  279. 

ency,  to  call  upon  each  other  to  make  up  (e)  Story  on  Part.  §§  360,  361. 


246.] 


OF    THE    REMEDIES    OP    THIRD    PERSONS. 


327 


This  theory  is  certainly  obscure,  and  hardly  capable  of  being 
definitely  stated  ;  nor  docs  it  appear  to  lead  in  any  direct  or  dis- 
tinct way  to  the  result,  for  the  sake  of  which  it  seems  to  have  been 
constructed.  There  is  no  doubt  that  creditors  of  the  firm  have  an 
e(iuitable  pi'cference,  or  right,  which  courts  of  equity  enforce,  (/) 
But  not  much  is  i^ained  by  regarding  this  as  a  lien.(//) 

It  seems  to  be  admitted  by  Mr.  Justice  Story,  who  built  upon  this 
theory  almost  all  the  remedy  of  the  creditors,  that  partners  have 
no  lien,  unless  in  case  of  insolvency  or  dissolution  ,•  or,  certainly, 
that  the  creditors  do  not  get  their  quasi  lien,  unless  in  these 
cases.  It  is  not  easy  to  see  how  either  insolvency  or  dissolution 
creates  any  lien,  although,  in  these  new  circumstances,  new  rights 
arise,  or,  at  least,  are  developed,  and  come  into  prominence,  and 
the  courts  of  ecpiity  recognize  and  enforce  them.  And  this  we 
suppose  to  be  what  is  meant.  (^) 


(/)  Rr  par/e  Willmms,  11  Ves.  6  ;  Ex 
parte  Rulfiu,  6  Ves.  126,  127  ;  Ex  parte 
Kendall,  17  Ves.  526  ;  Hoxie  v.  Carr,  1 
Sumner,  181  ;  Ex  parte  Rowlandson,  2 
Ves.  &  B.  172  ;  Appeal  of  York  Co.  Bank, 
S2  Pa.  446;  Baker's  Appeal,  21  Pa.  76; 
Doner  y.  Stantter,  1  Pen.  &  \V.  198  ;  Wilson 
V.  Lojier,  13  B.  Mon.  414  ;  Jones  u.  Liisk, 
2  Met.  (Kv.)  356;  Stout  v.  Fortune,  7 
Iowa,  183  ;  Campbell  v.  Mullett,  2  Svvanst. 
575  ;  Cross  on  Lien,  198  ;  Washburn  v. 
Bank  of  Bellows  Falls,  19  Vt.  278.  Author- 
ities upon  the  point  might  be  multiplied 
almost  indefinitely.  This  is  the  recog- 
nized and  decided  law  of  all  the  New  Eng- 
land States.  Most  of  the  other  States 
have  also  recognized  it ;  and  no  one  has 
expressly  denied  its  existence  or  obliga- 
tion, so  far  as  we  know,  with  the  excep- 
tion of  Pennsylvania  and  Georgia.  See 
Witter  V.  Richards,  10  Conn.  37  ;  Egberts 
V.  Wood,  3  Paige,  517 ;  McCulloch  v. 
Dashiell,  1  H.  &  G.  96  ;  Hall  v.  Hall,  2 
McL'ord  Ch.  302  ;  Wooddrop  v.  Wards,  3 
Desaus.  203  ;  Smith  v.  Johnson,  2  Edw. 
28  ;  Commercial  Bank  v.  Wilkins,  9  Me. 
28.  Further  see  Pearson  v.  Keedy,  6  B. 
Mon.  128  ;  Black  v.  Bush,  7  B.  Mon.  210  ; 
Ladd  V.  Griswold,  9  111.  25  ;  Reese  v 
Bradford,  13  Ala.  837  ;  Matlock  v.  Mat- 
lock, 5  Ind.  403  ;  Miller  v.  Estill,  5  Ohio 
St.  508  ;  Allen  v.  Centre  Vale  Co.,  21 
Conn.  130  ;  Williams  v.  Gage,  49  Miss. 
777  ;  Gordon  v.  Kennedy,  36  Iowa,  167 
In  Pennsylvania,  it  wag  denied  in  Bell  v. 


Newman,  5  S.  &  R.  78  ;  Inre  Sperry,  1 
Ashm.  347  ;  and,  in  Georgia,  in  Ex  parte 
Stelibins,  R.  M.  Charlt.  77  (though  this 
case  was  decided  under  a  statute,  and  was 
exceptional  in  its  circumstances);  and 
questioned  in  Cleghorn  v.  Ins.  Bank  of 
Columbus,  9  Ga.  319.  But  it  is  now 
otherwise  in  both  States.  The  right  has 
been  recognized  in  Pennsylvania,  in  Appeal 
of  York  Co.  Bank,  32  Pa.  446,  and  other 
ca.ses  cited  ;  and  in  Georgia,  in  Hoskins  v. 
Johnson,  24  Ga.  625,  630,  where  it  is  called 
an  equity.  In  the  case  of  Burtus  v.  Tis 
dall,  4  Barb.  588,  Strong,  J.,  says  :  "It 
is  clearly  settled  that  the  joint  creditors 
have,  then,  the  first  equitable  claim  upon 
the  whole,  for  the  satisfaction  of  their 
debts."  Sometimes  the  copartnership  pro- 
perty is  called  a  trust  fund  for  the  benefit 
of  creditors  ;  and  sometimes  it  has  been 
said  that  the  copartnership  creditors  have 
a  lien,  or  qxinsi  lien,  upon  it.  But  what- 
ever may  be  the  exact  nature  and  extent 
of  these  rights,  it  is  certain  that  the  joint 
debts  have  a  claim  of  priority  of  payment 
out  of  the  whole  of  the  joint  funds. 

(//■)  See  Mayer  v.  Clark,  40  Ala.  259. 

{<j)  If  the  private  creditor  levies  on  the 
joint  property,  and,  on  an  account  being 
taken  to  find  the  amount  covered  by  the 
levy — viz.,  the  debtor's  share— if  it  ap- 
pear that  there  is  enough  to  satisfy  both 
the  joint  and  separate  creditors,  the  former 
cannot  be  said  to  be  ])referred.  If  there  i.s 
not  enough  to  satisfy  both,  then  there  is 


328 


THE   LAW    OF    PARTNERSHIP. 


[CH.    X. 


§  247.  Theory  of  Legal  Ownership  by  Partnership. —  We  appre- 
hend that  there  is  a  simpler  view  of  this  subject,  which  is  at  least 
equally  efficient,  and  is  open  to  no  important  objection.  It  is  that 
which  we  have  already  intimated.  A  partnership  is  a  legal  body 
by  itself  ;  we  do  not  say  it  is  a  corporation,  because  it  wants  some 
of  the  most  essential  elements  of  incorporation.  But  we  say  it  is 
a  body  by  itself,  and  is  so  recognized  by  the  law  for  some  purposes, 
and  should  be  —  always  in  a  proper  way  and  to  a  proper  degree  — 
for  all  purposes.  And  among  these  purposes  is  the  placing  of  its 
relation  to  its  creditors  on  the  basis  of  contracting  its  own  debts, 
and  having  its  own  creditors,  and  possessing  its  own  projjcrty, 
which  it  applies  to  the  payment  of  its  debts.  After  this  relation 
is  exhausted,  or  after  this  work  is  done,  there  is  a  resolution  of 
this  l)ody  into  its  elements.  Then  come  up  the  new  relations  be- 
tween those  who  were  the  members  of  this  body  and  those  who 
were  its  creditors.  If  the  joint  debts  have  been  so  paid,  in  full, 
there  are  no  joint  creditors,  and  they  who  were  jjartners  own  the 
remaining  property,  free  from  all  encumbrance,  except  each  other's 
rights,  and  they  share  this  remainder  between  them.  If  the  funds 
of  the  partnership  were  insufficient  to  pay  its  debts,  they  who  were 
its  members  are  now  the  debtors  of  those  who  were  before  only 
the  creditors  of  the  partnership  ;  and,  like  other  debtors,  must 
pay  their  debts  by  whatever  means  they  can.  (A) 


an  insolvency,  and  the  joint  creditors  are 
preferred.  So,  in  the  case  of  marshalling 
of  assets.  This,  therefore,  seems  to  be  the 
sense  in  which  the  numerous  cases  are  to 

1  e  taken  which  admit  the  equitable  lien 
only  in  case  of  insolvency.  Washburn  v. 
Bank  of  Bellows  Falls,  19  Vt.  278  ;  Hub- 
bard V.  Curtis,  8  Iowa,  1  ;  Jones  v.   Lusk, 

2  Met.  (Ky.)  356;  Stout  w.  Fortune,  7 
Iowa,  183;  Burtus  v.  Tisdall,  4  Barb. 
571  ;  Pearson  v.  Keedy,  6  B.  Mon.  128  ; 
Story  Eq.  Jur.  §  676  i  Griffith  v.  Buck, 
13  Md.  102  ;  Campbell  v.  Mullett,  2 
Swanst.  551.  As  the  joint  creditor  has  no 
lien  or  equity  till  dissolution  and  insol- 
vency, any  bond  _fidc  assignment  ])rior 
thereto  would  seem  to  convert  the  joint 
into  separate  property,  and  removes  it  from 
the  operation  of  the  lien.  Cross  on  Lien, 
198;  Ex  parte  Ruffin,  6  Ves.  119;  Ex 
pro'/e  Williams,  11  Ves.  3;  Hunt  v.  Wa- 
terman, 2  E.  I.  298  ;  Smith  v.  Edwai-ds, 
7  Humph.  106  ;  Miller  v.  Estill,  5  Ohio 
St.  508  ;  Campbell  v.  Mullett,   2  Swaust. 


575  ;  Ex  parte  Fell,  10  Ves.  347  ;  Griffith 
V.  Buck,  13  Md.  102  ;  Rogers  v.  Nichols, 
20  Tex.  719  ;  Stout  v.  Fortune,  7  Iowa, 
183  ;  Jones  v.  Lusk,  2  Met.  (Ky.)  356  ; 
Holmes  v.  Hawes,  8  Ired.  Eq.  21  ;  Wilson 
V.  Soper,  13  B.  Mon.  414  ;  Reese  v.  Brad- 
ford, 13  Ala.  846  ;  Ex  parte  Peake,  1 
Madd.  358.  So  where  one  partner  sells 
out  to  another  who  assumes  the  debts. 
City  of  Maynoketa  v.  AVilley,  35  Iowa,  323. 
See  also  Giddings  v.  Palmer,  107  Mmss. 
269.  After  dissolution,  if  one  partner  pur- 
chase the  interest  of  the  other,  agreeing  to 
assume  the  debts,  he  becomes  the  piincipal 
debtor,  of  whom  the  retiring  paitner  is 
surety  ;  and  creditors  of  the  firm,  hnving 
knowledge  of  this  equity,  are  bound  to 
regard  it  in  their  subsequent  dealings  with 
the  parties.  Smith  v.  Shelden,  35  Mich. 
42. 

(A)  Various  attributes  of  a  partnership 
favor  this  view.  Thus,  the  delectus  persu- 
ncirum,  the  necessity  of  a  joint  suit  by  or 
against  them,   the  doctrines  of  equit^hle 


§  248] 


OF  THE  REMEDIES  OF  THIRD  PERSONS. 


829 


§  248.  How  far  Recognized  at  Law.  —  The  law  does  not  HOW 
make  this  recoguitiou  in  the  i»hiin  and  simple  way  we  have  stated, 
and  drawn  from  it  all  those  niferences  to  which  it  would  seem  to 
lead.  Thus,  lon<^  after  it  was  established  that  the  creditors  of 
the  partnersliip  had  a  priority  of  right  to  the  partnership  effects 
over  private  creditors  of  the  partners,  it  was  (juite  as  well  estab- 
lished that  the  creditors  of  the  partnership  could  levy  upon  the 
private  effects  of  tlie  partners,  just  as  freely  as  their  private  credi- 
tors could;  thus  giving  to  the  creditors  of  the  partnership  a 
double  charge,  —  priority  in  one  respect,  and  equality  in  the 
other.  It  seems,  however,  to  have  hecomc  a  rule  in  the  settle- 
ment of  bankrupt  aiul  insolvent  concerns,  to  apply  a  more  just 
and  reasonable  principle  ;  namely,  to  give  to  the  creditors  of  the 
partnership  all  the  effects  of  the  partnership  if  necessary  for  their 
debts,  leaving  only  tlie  surj)lus,  if  these  debts  were  paid  to  the 
private  creditors ;  and  to  give  to  the  several  private  creditors  the 
private  assets  of  the  several  partners,  applying  only  the  surpkis 
to  tlie  debts  of  the  partnership.  (/)  There  was  some  fluctuation 
back  and  forth  ;  but  this  j)rinciple  finally  prevailed  in  England, 
and,  as  almost  all  insolvencies  were  settled  there  in  chancery,  this 
may  be  considered  as  their  method  of  settling  such  estates.  (^ ) 


preference,  and  of  the  joint  and  several 
linbility  of  partners,  are  well  explained  on 
this  basis,  without  resoiting  to  the  theory 
of  quasi  and  dependent  lien.  In  many  of 
the  eases  involving  the  claims  of  the  joint 
creditors  on  the  partnership  fund,  the 
word  "  lien  "  is  not  used,  but  the  right  of 
the  partnership  creditor  is  termed  a  trust ; 
and,  in  some  cases,  is  held  operative  di- 
rectly on  the  fund,  antl  not  through  the 
medium  of  the  partner's  lien.  Tillinghast 
V.  Ciiamplin,  4  R.  I.  173  ;  Burtus  v.  Tis- 
dall,  4  Barb.   571,  588. 

((■)  This  was  first  held  in  a.  d.  1715, 
in  Ex  parte  Crowder,  2  Vern.  706;  fol- 
lowed by  Ex  parte  Cooke,  2  P.  Wnis. 
500. 

(j)  The  older  rule  in  bankrurtcy,  giv- 
ing a  full  satisfaction  out  of  the  sepa- 
rate estate  to  the  separate  creditors,  was 
first  broken  in  upon  by  Lord  Thurlow, 
in  Ex  parte  Hayden,  1  Bro.  Ch.  454, 
which  introduced  the  important  modifi- 
cation that  the  separate  estate  might  be 
had  recourse  to,  by  the  partnership  cred- 
itors, whenever  there  was  neither  joint 
estate  nor  a  solvent  partner.     This  some- 


what anomalous  rule,  making  the  nature 
of  the  debt  depend  on  the  presence  or  ab- 
sence of  joint  assets  (see  per  Lord  Eldon, 
in  Ex  parte  Pinkerton,  6  Ves.  814,  note), 
seems  farther  to  have  been  extended,  by 
Lord  Thurlow  in  Ex  parte  Hodgson,  2 
Bro.  Ch.  5,  to  an  absolute  equality  as  to 
the  separate  estate  between  the  joint  and 
separate  creditors  ;  and  ap])arently,  this 
continued  to  be  the  rule  till  the  decision 
of  Lord  Rosslyn  in  Ex  parte  Elton,  3  Ves. 
238,  A.  D.  1796,  when  the  principle  of  the 
old  rule  of  exclusive  satisfai:tiou  of  the 
separate  creditors  from  the  separate  estate 
— tlie  partjiership  creditors  coming  in  only 
for  the  surplus — -was  restored,  and  was  fol- 
lowed for  some  time.  Ex  arte  Clay,  6 
Ves.  813  ;  Ex  parte  Kensington,  14  Ves. 
448.  For  the  history  of  this  fluctuation, 
see  Allen  v.  Wells,  22  Pick.  453  ;  Bard- 
well  v.  Perry,  19  Vt.  292,  where  it  is  con- 
cisely set  forth  ;  Murray  v.  Murray,  5 
Johns.  Ch.  60,  where  it  is  given  at  greater 
length.  The  earlier  rule,  restricting  the 
joint  creditors  from  recourse  to  the  sepa- 
rate estate,  was  adopted  from  bankruptcy 
into  equity,    receiving  only  the    modifica- 


330 


THE    LAW    OF    PARTNERSHIP. 


[CH.    X. 


Ill  this  country  there  were  some,  but  rather  faint,  attempts 
to  establish  the  same  principle.  Recently  these  have  been 
renewed  with  more  vigor  and  more  success.  And  we  believe 
that  a  principle  which  is  so  obviously  just  and  reasonable  and 
consistent  with  the  true  theory  of  partnership,  will  before  long  be 
settled  and  established  with  us.  (k)  ^ 


tion  that  if  no  joint,  estate  subsisted,  and 
there  was  no  solvent  partner,  the  firm  cred- 
itors might  come  upon  the  separate  fund 
pari  passu  with  the  separate  creditors.  See 
accordingly  Cowell  v.  Sikes,  2  Russ.  191  ; 
Gray  y.  Chiswell,  9  V'es.  US  ;  Ex  pui-te 
Kendall,  17  Ves.  514.  In  Gray  v.  Chis- 
well, it  was  decided  expressly  that  sepa- 
rate creditors  were  entitled  to  be  paid 
first  out  of  the  separate  fund,  if  there 
was  any  joint  fund,  however  small,  for 
the  joint  creditors  to  follow  ;  Lord  El- 
don  remarking  that  it  was  the  first  time 
the  case  had  been  presented  in  equity, 
though  in  bankruj)tcy  the  question  was 
familiar.  But  in  Devaynes  v.  Noble,  1 
Meriv.  529,  562,  564,  it  was  held  by  Sir 
William  Grant,  that  though  the  common 
law  had,  unlike  the  law-merchant,  made 
all  partnership  contracts  joint,  equity,  fol- 
lowing the  law-merchant,  would  hold 
them  several,  by  operating  through  its 
jurisdiction  to  correct  a  mistake,  to  re- 
form the  contract.  Hence,  he  held,  that 
equity  would  admit  a  partnership  creditor 
to  come  directly  upon  the  separate  estate, 
without  regard  to  the  accounts  between 
the  partner  and  his  firm.  His  ruling  was 
conHrme<l  by  Lord  Brougham  on  appeal. 
2  Russ.  &  M.  495.  It  had  been  already 
followed  in  Sumner  v.  Powell,  2  Meriv. 
37  ;  and  since  in  Wilkinson  v.  Hender- 
son, 1  Mylne  &  K.  582  ;  also,  in  Thorpe 
V.  Jackson,  2  Younge  &  C.  553,  where  it 
was  held,  that  the  same  rule  applied  also 
to  joint  debtors  not  partners  in  trade. 
And  this  seems  to  be  the  undoubted  law 
in  England,  Story  Eq.  Jur.  §  676  ;  Red- 
field,  J.,  in  Washburn  v.  Bank  of  Bellows 
Falls,  19  Vt.  278  ;  and,  to  some  extent,  in 
this  country.  But  this  rule  is  confined 
solely  to  cases  where  the  partnership  cred- 
itors seek  to  come  upon  the  separate  as- 
sets of  one  partner,  and  there  are  no  com- 


peting sejiarate  creditors.  See  the  cases 
cited  accordingly  ;  also.  Hills  v.  M'Rae,  9 
Hare,  297  ;  Harris  v.  Farwell,  13  Beav. 
403  ;  Brett  v.  Beckwith,  3  Jur.  N.  s.  31. 
But  if  there  are  separate  creditors,  it  seems 
to  be  the  present  equity  doctrine  that,  as  to 
equitable  assets,  if  there  be  no  joint  fund 
or  solvent  paitner,  whether  the  separate 
estate  be  solvent  or  not,  the  separate  cred- 
itors must  first  be  satisiied  out  of  their 
fund,  and  the  joint  creditors  take  only  the 
surplus,  if  any.  Ridgway  v.  Clare,  19 
Beav.  311  ;  Addis  i^.  Knight,  2  Meriv. 
117;  Croft  r.  Pyke,  3  P.  Wms.  112  ;  while, 
if  both  estates  are  solvent,  the  joint  cred- 
itors can  come  upon  either  ;  or,  if  the 
joint  fund  be  solvent,  and  the  separate  in- 
solvent, the  joint  creditors  can  follow  the 
latter,  as,  by  their  payment,  the  seiiarate 
estate  has  a  credit  to  that  amount  in  the 
joint  estate,  which  the  separate  creditors 
can  pursue.  Ridgway  r.  Clare,  19  Beav. 
311  ;  Ex  parte  Sperry,  1  Ashm.  357  ; 
Walker  v.  Eyth,  25  Pa.  216  ;  Lawrence  v. 
Trustees  of  Orphan  House,  2  Denio,  577; 
Patterson  v.  Ijrewster,  4  Edw.  Ch.  352. 

(k)  The  preference  of  the  sej^arate 
creditors,  as  a  rule  of  ecjuity,  is  affiimed 
by  Chancellor  Kent.  Murray  v.  Murray, 
5  Johns.  Ch.  60  ;  3  Kent  Comm.  65, 
citing  Wilder  v.  Keeler,  3  Paige,  167; 
Morgan  v.  His  Creditors,  20  Mart.  (La.) 
599  ";  McCulloch  v.  Dashiell,  1  H.  &  G. 
96  ;  Payne  v.  Matthews,  6  Paige,  19  ; 
Hall  V.  Wood,  2  McCord  Ch.  302  ;  Bow- 
den  V.  Schatzell,  1  Bailey  E(p  360  ;  Cam- 
mack  V.  Johnson,  1  Green  Ch.  163.  The 
joint  estate  of  a  partnership  is  first  liable 
for  the  joint  debts,  and  the  sepaiate  estate 
of  the  respective  partners  for  their  sepa- 
rate debts  ;  and  neither  class  has  a  right 
to  go  to  the  fund  previously  belonging  to 
the  other,  until  the  creditors  having  pre- 
ference are  fully  paid.     In  re  McLean,  U. 


1  We  have  seen  {ante,  §  178)  that  when  a  partner  transfers  his  interest  in  the  firm, 
the  assignee  gets  no  interest  in  the  assets,  but  only  the  partner's  right  to  a  share  of  the 


§  249.]  OF    THK    REMEDIES    OF    THIRD    PERSONS.  331 

§  249.      Suit  by    or    against    a    Partnership.  —  [At    COmillOll    law 

S.  Dist.  Ct.  15   N.  B.  R.  333  ;    Murril  v.  the  more  modified  doctrine  is  iiiaintaiued, 

Neil,  8  How.  421  ;  Bass  i;.  Estill,  50  Miss,  that   the    partnership   creditoi-s     will    be 

300.      So   also  see  Patterson  v.  Brewster,  admitted  ?J«ri  passu,  only  when  they  have 

4   Edw.    Ch.  352  ;    Crockett  v  Crain,  33  no  joint  fund,  Bridge  v.  McCulloiigli,  27 

N.  H.  452  ;    North    K.  Bank    v.  Stewart,  Ala.  661  ;  Kodgers  v.  Meranda,  7  Oiiio  St. 

4  Bradf.  254  ;  Ganson  v.  Lathro[),  25  Barb.  179  ;  Brock  v.  Bateman,  25  Ohio  St.  60y  ; 

455  ;     Morrison    v.    Kentz,    15    111.    VJ'i  ;  or  there  is  no  solvent  partner,  Daniel  v. 

Hubbard  ?•.  Curtis,  8  Iowa,  1.    Elsewhere  Townsend,  21  Ga.  155. 


net  jn'otits  after  an  account  is  taken.  If  all  the  partners  transfer  their  interests  the 
transaction  would  seem  to  be  the  same.  Whoever  held  the  legal  title,  the  beneficial 
interest  would  be  in  the  firm,  and  none  of  the  assignees  would  have  any  beneficial 
interest  until  the  firm  debts  were  paid  and  the  accounts  adjusted.  The  firm  credit- 
ors would  therefore  lose  nothing,  as  they  should  not,  by  the  fact  that  all  the 
partners  instead  of  all  but  one,  had  sold  out.  Lord  Eldon's  tli£ory  of  the  quasi- 
lien  of  the  firm  creditors  works  out  here,  however,  a  startling  and  unjust  result. 
Since  by  this  theory  the  creditors  have  no  rights  except  through  the  partners,  it 
follows  that  if  all  the  partners  release  their  lights,  the  derivative  rights  of  the  credit- 
ors are  gone.  It  is  held  that  they  do  so  release  their  rights  when  they  all  assign 
their  interests.  Case  v.  Beauregard,  99  U.  S.  119  ;  Goldsmith  v.  Eichold,  94  Ala. 
116,  10  So.  80;  Jones  v.  Fletcher,  42  Ark.  422;  Young  v.  Clapp,  (111.)  32  N.  E. 
187.    Contra,  Meuagh  v.  Whitwell,  52  N.   Y.    146. 

The  theory  is  carried  so  far  that  where  the  interests  of  all  the  partners  or  of 
the  last  partners  having  claims  are  sold  out  upon  executions  in  favor  of  individual 
creditors,  their  "liens,"  and  conseciuently  the  firm  creditors'  " ^Jtresi-liens,"  upon  the 
firm  property  are  gone.  Jones  v.  Fletcher,  42  Ark.  422  ;  Doner  v.  Stauffer,  1 
Pen.   &  \V.   198  ;  Coover's  Appeal,   29  Pa.  9. 

This  principle  is  invoked  to  establish  the  rights  of  joint  creditors  of  the  part- 
ners who  are  not  firm  creditors.  If  joint  creditors  of  the  partners  bring  suit  and 
attach  or  seize  on  execution  partnership  property,  later  attaching  partnership 
creditors  cannot  interfere  ;  a  reason  given  is  that  the  partners  cannot  object,  and 
therefore,  partnership  creditors  have  no  right  to  do  so.  Hoare  v.  Oriental  Bank, 
2  App.  Cas.  589  (semble)  ;  Hall  v.  Richardson,  (N.  H.)  20  Atl.  978;  Saunders  y. 
Reilly,  105  N.  Y.  12,  12  N.  E.  170  ;  Davis  v.  Delaware  &  Hudson  Canal  Co., 
109  N.  Y.  47,  15  N.  E.  873  ;  Snodgiass's  Appeal,  13  Pa.  471.  See,  to  the  same 
eti'ect,  Couchman  v.  Maupin,  78  Ky.  33  ;  Citizens'  Bank  v.  Williams,  128  N.  Y. 
77,   28  N.   E.   33.     Contra,  Commercial  Bank  v.  Mitchell,  58  Cal.  42. 

Where  one  partner  transfers  the  assets  to  his  copartner  a  question  arises  of  a 
different  sort.  There  is  in  that  case  an  intention  to  pass  the  property  from  the 
firm  to  the  purchasing  partner.  Both  parties  acting  together  have  power  to  convey 
firm  property  of  any  kind  ;  and  here  therefore  the  legal  title  {»asses.  The  firm 
creditors  have  no  more  right  to  complain  than  the  creditors  of  any  debtor  who  has 
conveyed  away  his  property  ;  they  can  complain,  that  is,  only  when  the  convey- 
ance is  a  fraud  upon  creditors.  In  the  ordinary  case,  therefore,  the  firm  creditors 
have  no  right  to  complain,  and  no  claim  upon  the  property  transferred.  Schleicher 
V.  Walker,  28  Fla.  680,  10  So.  33  ;  Stanton  v.  Westover,  101  N.  Y.  265,  4  N. 
E.  529.  And  the  same  thing  is  true  if  the  transfer  is  not  to  one  of  the  partners, 
but  to  an  individual  creditor  of  a  partner,  or  to  a  third  party,  provided  all  the 
the  partners  assent.  See  post,  §  251,  note  {q).  Young  v.  Clapp,  (111.)  32  N.  E. 
187  ;  Woodmansie  v.  Holcomb,  34  Kas.  35  ;  7  Pac.  603  ;  Schmidlapp  v.  Currie,  55 
Miss.  597  ;  Fulton  v.  Hughes,  63  Miss.  61  ;  Sexton  v.  An<lerson,  95  Mo.  373,  8 
S.  W.  562;  Pepper    v.  Peck,    (11.    I.)  20  Atl.  16.      When    one    partner  thus  agrees 


332  THE    LAW    OF    PARTNERSHIP.  [CH.   X. 

the  partnership  is  not  recognized  as  a  person  capable  of    being 

tliat  the  other  shall  leave  all  the  assets,  and  the  latter  agrees  to  pay  the  firm 
debts,  this  would  seem  to  be  a  personal  contract,  and  not  to  give  the  firm  creditors 
any  claim  as  such  on  the  assets.  Goembel  v.  Arnett,  100  111.  34  ;  Parker  v.  Aler- 
ritt,  105  111  "^QS  (scmble)  ;  Trentinan  v.  Swartzell,  85  Ind.  443  ;  Vosper  v  Kramer, 
31  N.  J.  Eq.  420  ;  Alpaugh  v.  Savage,  (N.  J.)  19  Atl.  380.  In  Indiana  it  is  held 
that  tht  firm  creditors  become  indiviilual  creditors  of  the  purchasing  partner, 
and  may  share  pari  passu  with  his  other  individual  creditors.  Warren  v.  Farmer, 
100  Ind.  593.  But  it  is  sometimes  decided  that  the  purchasing  partner  takes  the 
assets  in  trust,  and  will  be  reipiired  to  hold  them  for  the  jiartnershij)  creditors.  P)0w- 
man  v.  Spalding,  (Ky.)  2  S.  W.  911  ;  Phelps  v.  McNeely,  6(5  Mo.  554.  So  in 
Virginia,  where  the  agreement  was  to  pay  the  debts  "out  of  the  assets."  Shackelford 
V.  Shackelford,  32  Gratt.  481.     See  also  Parker  v.  Merritt,  105  111.  293. 

If  however  the  transfer  leaves  the  firm  insolvent,  and  no  equivalent  is  obtained, 
the  transfer  would  seem  to  be  a  fraud  on  the  creditors  ;  who  in  that  case  have  a  legal 
claim  on  the  property  conveyed.  If  one  or  both  of  the  partners  continue  solvent,  the 
creditors  have  a  remedy,  and  the  conveyance  seems  good.  But  if  the  firm  and  the 
partners  are  insolvent,  the  conveyance  should  be  held  fj-audulent  in  law,  what- 
ever the  intent  of  the  {)arties.  Ex  parte  Mayou,  4  De  G.  J.  &  S.  664  ;  Ex  parte 
Suowball,  L.  R.  7  Ch.  534;  Goodbar  v.  Gary,  16  F.  R.  316;  Keith  v.  Fink,  47 
111.  272;  Smith  v.  Smith,  (la.)  50  N.  W.  64;  Kelley  v  Flory,  (la.)  51  N.  W.  181  ; 
Roop  V.  Herron,  15  Neb.  73,  17  N.  W.  353;  Caldwell  v.  Bloomington  Mfg.  Co.,  17 
Neb.  489,  23  N.  W.  336  ;  Morehead  v.  Adams,  18  Neb.  569,  26  N.  W.  242  ;  Clements 
V.  Jessup,  36  N.  J.  Eq.  569,  572  (sembic)  ;  Wilson  v.  Robertson,  21  N.  Y.  587; 
Menagh  v.  Whitwell,  52  N.  Y.  146  ;  Bulger  v.  Ro.sa,  119  N.  Y.  459,  24  N.  E.  853  ; 
De  Caussey  v.  Baily,  57  Tex.  665  (semble);  Darby  v.  Gilligan,  33  W.  Va.  246,  10  S. 
E.  400;  Baer  w.  Wilkinson,  35  W.  Va.  422,  14  S  E.  1 ;  David  v.  Birchard,  53 
Wis.  492,  10  N.  W.  557  ;  Keith  v.  Armstrong,  65  Wis.  225,  26  N.W.  445  ;  Cribb  v. 
Morse,  77  Wis.  322,  46  N.  W.  126.  See  Davies  v.  Atkinson,  124  111.  474,  16  N.  E.  899  ; 
or  it  should  at  least  be  lield  that  a  knowledge  of  the  insolvency  by  the  part- 
ners conclusively  proves  them  to  have  been  acting  fraudulently  in  fact.  Johnston  v. 
Straus,  26  F.  R.  57  ;  Phelps  v.  McNeely,  66  Mo.  554  ;  Reyburn  v.  Mitchell,  106  Mo. 
365,  16  S.  W.  592. 

It  is  held,  however,  by  a  strong  body  of  authority  that  if  the  transfer  was  bona 
fide  it  holds,  even  if  in  fact  the  firm  was  insolvent.  Case  v.  Beauregard,  99  U.  S. 
119  ;  Huiskamp  v.  Moline  Wagon  Co.,  121  U.  S.  310  ;  Coffin  v.  Day,  34  F.  R.  687  ; 
Reynolds  v.  Johnson,  54  Ark.  449,  16  S.  W.  124;  Sickman  v.  Abernathy,  14  Col. 
174,  23  Pac.  447  ;  Allen  v.  Center  Valley  Co.,  21  Conn.  130  ;  Ellison  v.  Lucas,  87  Ga. 
223.  13  S.  E.  445  ;  Hapgood  v.  Cornwell,  48  111.  64  ;  Hanford  v.  Prouty,  133  111.  339, 
24  N.  E.  565  ;  Purple  v.  Farrington,  119  Ind.  164,  21  N.  E.  543  ;  Poole  v.  Seuey,  66 
la.  502,  24  N.  W.  27  ;  Woodmansie  v.  Holcomb,  34  Kas.  35,  38,  7  Pac.  603  (f<emb/c)  ; 
Howe  V.  Lawrence,  9  Cush.  553  ;  Richai-ds  v.  Manson,  101  Mass.  482  ;  Hanover  Nat. 
Bank  v.  Klein,  64  Miss.  141  ;  Dimon  v.  Hazard,  32  N.  Y.  65  ;  Wilco.\  v.  Kellogg,  11 
Ohio,  394  ;  Sigler  v.  Bank,  8  Oh.  St.  511  ;  Gallagher's  Appeal,  114  Pa.  353,  7  Atl. 
237  ;  Carver  Gin  &  Machine  Co.  v.  Bannon,  85  Tenn.  712,  4  S.  W.  831.  A  distinc- 
tion is  made  in  Arnold  v.  Hagerman,  45  N.  J.  Eq.  186,  17  Atl.  93,  between  a  convey- 
ance with  and  one  without  knowledge  of  the  insolvency  ;  the  latter  only  being  upheld. 
And  it  is  clear  that  if  there  is  in  fact  a  fraudulent  intent  the  conveyance  is  voidable. 
Flack  V.  Charron,  29  Md.  311. 

In  New  Hampshire  firm  property  cannot  be  diverted  from  the  debts  of  existing 
firm  creditors,  even  by  consent  of  all  the  partners.  Kidder  v.  Page,  48  N.  H.  380; 
Caldwell  V.  Scott,  54  N.  H.  414.  Though  it  may  be  applied  to  other  purposes  as 
against  subsequent  firm  creditors.     Farwell  v.  Metcalf,  63  N.  H.  276. 

A  firm  creditor  who  has  secured  a  legal  interest  in  the  property,  as  by  attachment, 
inay  of  course  hold  it  against  any  subsequent  act,  even  an  act  in  which  all  partners 


§  250]  OF    THE    REMEDIES    OF   THIRD    PERSONS.  333 

sned  ;  and  it  must  sue  and  be  sued  in  the  names  of  the  partners  ^ 
And  therefore  in  order  to  get  a  judgment  v.hich  will  bind  all 
the  partners,  service  must  be  made  upon  all.  Service  upon  one 
partner  is  not  enough,^  though  if  one  partner  is  sued,  he  is 
concluded  by  a  judgment ;  ^  and  since  the  partners  arc  liable 
severally  as  well  as  jointly,  if  both  partners  are  non-resident 
the  property  of  one  may  be  attached  and  made  liable  for  the 
debts.*  Where  one  partner  dies  pending  suit,  since  firm  del)ts 
survive,  the  action  may  proceed  against  the  survivors  without  a 
bill  of  revivor  ;  ^  and  if  a  partner  dies  before  suit  is  begun,  the 
surviving  partners  alone  must  sue  or  be  sued,  without  joining 
the  representative  of  the  deceased  partner.^] 

If  the  partnership  is  changed,  whether  by  a  former  partner 
withdrawing,  or  a  new  one  coming  in,  it  is  a  general  rule,  that 
those  persons  who  were  ))artners  when  the  contract  was  formed, 
whether  it  was  express  or  implied,  and  they  only,  can  sue  upon 
the  contract.  (iV) 

§  250.  Suit  in  Partnership  Name  by  Statute.  —  [The  position  of 
a  defendant  firm  has  been  much  changed  by  statute.  The  most 
important  loi'm  of  statute  is  that  allowing  a  firm  to  sue  and  be 
sued  in  the  firm  name.'  Some  such  statutes  allow  judgment  to 
be  issued  in  this  case  only  against  the  firm  property,  not  against 
the  partners  individually  ;^  and  therefore  when  a  married  woman 
is  member  of  a  firm,  there   is  no  difficulty  in   suing  the   firm.^ 

(h)  Cannin.<,'liam  r.  Munroe,  15  Gray,  471  ;  Tay  v.  Ladd,  15  Gray,  296.  But  see 
Page  V.  Wolcott.  15  Gray,  536. 

join.  Schleicher  v.  Walker,  28  Fla.  680,  10  So.  33  {semble)  ;  Carter  i'.  Galloway,  36 
La.  Ann.  473,  730  ;  Robinson  v.  Allen,  85  Va.  721,  8  S.  E.  835. 

When  the  property  of  the  firm  is  fraudulently  assigned  to  an  individual  creditor, 
the  firm  creditors  may  follow  and  take  the  goods.  Hartley  v.  White,  94  Pa;  31.  And 
where  a  partner  conveys  his  own  interest,  though  the  legal  title  passes,  the  firm  cred- 
itors may  follow  the  goods.  Conant  v.  Frary,  49  Ind.  530  ;  Hiscock  v.  Phelps,  49 
N.  Y.  97;  Morss  v.  Gleason,  64  N.  Y.  204;  Lewis  v.  Anderson,  20  Ohio  St.  281  ; 
Cunningham  v.  Ward,  30  W.  Va.  572,  5  S.  E.  646. 

1  Lewis  V.  Cline,  (Miss.)  5  So.  112  ;  Dunham  v.  Shindler,  17  Ore.  256,  20  Pac.  326. 

2  Tabler  v.  Bryant,  62  Mis.s.  350. 

3  Hall  V.  Cook,  69  Ala.  87  (by  statute). 

*  Daly  V.  Bradbury.  46  Minn.  396,  49  X.  AV.  190. 

5  Davis  V.  Davis,  93  Ala.  173,  9  So.   736  ;  Bucki  v.  Cone,  25  Fla.   1,  6  So.    160  ; 

Dunman  v.  Coleman,  59  Tex.  199. 

,6  Ba.ssett  V.   Miller,  39  Jlich.  133  ;  Cragin  v.  Gardner,  64   Mich.    399,  31    X.  W. 

206  ;  Nehrboss  v.  Bliss,  88  N.  Y.  600  ;  Dial  t-.  Agnew,  28  S.  C.  454,  6  S.   E.  295  ; 

Watson  V.  Miller,  55  Tex.  289.     See  post,  §  349. 

T  Stuart  V.  Corning,  32  Conn.  105.     See  U.  S.  Express  Co  v.  Bedbury,  34  111.  459 
8  Jackson  v.  Litchfield,  8  Q.  B.  D.  474  (C.  A.)  ;  Clark  v.  Cullen,  9  Q.  B.  D.  355  ; 

Haralson  v.  Campbell,  63  Ala.  278  ;  Watts  v.  Rice,  75  Ala.  289  ;  O'Brien  v.  Fogle- 

song,  (Wyo.)  31  Pac.  1047. 

*  Yarbrough  v.  Bush,  69  Ala.  170. 


334  THE    LAW    OP    PARTNEUSniP.  [CH.    X. 

After  the  firm  assets  hnve  lieen  exliausted,  some  means  such  as 
bringing  suit  on  the  judgment,  against  the  members  of  the  firm 
are  provided  for  enforcing  the  partner's  liability.^  But  the  debt 
is  merged  in  the  judgment ,  and  one  who  has  ceased  to  belong 
to  the  firm  before  judgment  is  obtained  cannot  afterwards  be 
reached.  Only  members  of  tlie  firm  against  which  the  judg- 
ment is  obtained  can  be  held  upon  it,  even  secondarily .^  In 
Kansas,  however,  a  judgment  against  the  firm  in  the  firm  name 
binds  also  all  the  partners  who  were  served,  and  the  property  of 
either  partner  may  be  levied  on.^ 

There  seems  to  be  no  reason  why  the  individual  partners 
should  not  be  joined  in  an  action  brought  against  the  firm  by 
name.  In  Louisiana  a  single  partner  may  be  joined  with  the 
firm.*  And  action  may  still  be  brought  as  at  common  law 
against  the  individual  partners,  with  the  same  result  of  holding 
both  firm  and  individual  property.^ 

Another  common  form  of  statute  provides  that  a  firm  may 
be  bound  by  a  judgment  when  only  one  partner  is  served  with 
process.  Such  a  judgment  ordinarily  binds  the  firm  property, 
and  the  individual  property  of  the  member  actually  served.^ 
This  sort  of  statute  has  no  extra-territorial  force.  Though  it  is 
recognized  in  another  State  as  binding  on  the  partner  actually 
served,  it  will  not  be  enforced  against  the  firm  property  outside 
the  State,'^  nor  against  a  partner  who  was  not  served.^] 

§  251.  Residence  of  a  Partnership.  —  [Where  a  firm  may  be 
sued  by  name,  can  it  be  said  to  have  a  residence  ?  Not  at  any 
rate  in  the  United  States  courts,  since  in  those  courts,  in  spite 
of  the  State  statutes,  the  partnership  cannot  sue  and  be  sued  by 
name.  If  the  jurisdiction  depends  on  citizenship,  that  of  the 
partners  must  be  alleged.^  But  it  seems  clear  that  a  statute  of 
this  sort  recognizes,  at  least  for  purposes  of  procedure,  the  true 
nature  of  a  partnership  as  an  entity ;  and  that  it  should  therefore 


1  Ruth  V.  Lowrey,  10  Neb.  260,  4  N.  W.  977  ;  Leach  v.  Milbum  Wagon  Co.,  14 
Neb.  106,  15  N.  W.  232. 

2  Cambetbrt  v.  Chapman,  19  Q.  B.  D.  229. 
8  Stout  V.  Baker,  32  Kas.  113,  4  Pac.  141. 
*  Martin  v.  Meyer,  45  F.  R.  435. 

s  Haralson  v.  Campbell,  63  Ala.  278  ;  AVatts  v.  Rice,  75  Ala.  289  ;  Leinkauff  v. 
Munter,  76  Ala.  194. 

6  Harford  v.  Street,  46  la.  594  ;  Hedges  v.  Armistead,  60  Tex.  276 ;  Texas  &  St 
L.  R.  R.  V.  McCaughey,  62  Tex.  271. 

7  Bowler  v.  Huston,  30  Gratt.  266. 

8  Conley  t'.  Chapman,  74  Ga.  709. 
»  Adams  r.  May,  27  F.  R.  907. 


§  252.]  OF   THE   REMEDIES    OF   THIRD    PERSONS.  335 

be  recognized  as  having  a  residence  distinct  from  that  of  the 
individual  partners.^] 

§  252.  Exemption  from  Attachment  or  Execution.  —  [Whore  a 
debtor  whose  property  is  attached,  or  an  insolvent,  is  allowed  to 
retain  part  of  his  property  as  exempt  from  execution,  a  partner 
cannot  claim  any  part  of  the  partnership  property  as  so  exempt ; 
for  th(3  property  belongs  to  the  partnership,  not  to  the  partner.^  Nor 
can  the  exemption  be  claimed  by  the  partnership  ;  for  it  is  meant 
to  protect  individual  debtors.^ 

There  is  nothing  to  prevent  a  division  of  the  firm  property  by 
all  the  partners  among  themselves,  if  it  is  done  in  good  faith. 
The  property  then  becomes  separate  property  of  the  partners.*  If 
this  is  done  for  the  express  purpose  of  claiming  an  exemption, 
it  would  seem  not  to  be  bona  fide ^  but  a  device  to  avoid  creditors, 
and  exemption  should  not  be  allowed.^  Certainly  after  attach- 
ment or  levy  of  execution  it  is  too  late  to  make  such  a  division  ; 
the  creditor  has  a  prior  lien,  and  the  partners  can  claim  no 
exemption.^ 

Similarly  if  all  the  firm  assets  are  bona  fide  conveyed  to  one 
partner  they  become  his  individual  property ;  ^  and  he  may  there- 
fore claim  an  exemption,  though  the  firm  is  insolvent.^] 

1  Fitzgerald  v.  Grimmell,  64  la.  261,  20  N.  W.  179. 

'■«  In  re  Corbett,  5  Sawyer,  206  ;  Schlapback  v.  Long,  90  Ala.  525,  8  So.  113  ; 
Richardson  v.  Adler,  46  Ark.  43  ;  Cowan  v.  Creditors,  77  Gal.  403,  19  Pac.  755  ; 
Bates  V.  Callender,  3  Dak.  256,  16  N.  W.  506  (scmble)  ;  State  v.  Bowden,  18  Fla.  17  ; 
Smith  V.  Harris,  76  Ind.  104  ;  Ex  parte  Hopkins,  104  Ind.  157,  2  N.  E.  587  ;  Pond 
V.  Kimball,  101  Mass.  105  ;  Baker  v.  Sheehan,  29  Minn.  235,  12  N.  W.  704  ;  Prosser 
V.  Hartley,  35  Minn.  340,  29  N.  W.  156-  Wise  v.  Frey,  7  Neb.  134;  Gaylord  v. 
Imhoff,  26  Oh.  St.  317  ;  First  Nat.  Bank  v.  Hackett,  61  Wis.  335,  21  N.  W.  280  ; 
McNair  v.  Rewey,  62  Wis.  167,  22  N.  W.  339.  But  see  contra,  Blanchard  v.  Paschal, 
68  Ga.  32  ;  Skinner  v.  Shannon,  44  Mich.  86,  6  N.  W.  108,  even  though  the  claim- 
ant has  overdrawn  his  account  :  McCoy  v.  Brennan,  61  Mich.  362,  28  N.  W.  129. 
For  the  same  reason  a  minor  heir  of  one  partner  cannot  claim  out  of  partnership 
property  the  allowance  granted  by  statute  before  the  payment  of  debts.  Succession  of 
Pilcher,  39  La.  Ann.  362,  1  So.  929.  Nor  can  a  widow  claim  such  allowance.  Sellers 
V.  Shore,  89  Ga.  416,  15  S.  E.  494  ;  Julian  v.  Wrightsman,  73  Mo.  569.  Nor  can  a 
widow  claim  a  statutory  "exemption  "  in  partnership  property  where  her  husband  was 
a  partner,  so  long  as  the  partnership  affairs  are  unsettled.  Little  v.  McPherson,  76 
Ala.  552.     For  exemption  of  partnership  land  see  pof:t,  §  265,  note  1. 

3  In  re  Blodgett,  10  N.  B.  R.  145  ;  Guptil  v.  McFee,  9  Kas.  30  ;  Pond  v.  Kimball, 
101  Mass.  105  ;  State  v.  Spencer,  64  Mo.  355  ;  Russell  v.  Lennon,  39  Wis.  570. 

4  McKinney  v.  Baker,  9  Ore.  74  ;  Weaver  v.  Ashcroft,  50  Tex.  427. 

8  Gill  V.  Lattimore,  9  Lea,  381.  Contra,  Bates  v.  Callender,  3  Dak.  256,  16  N.  W. 
506  ,  State  v.  Kenan,  94  N.  C.  296. 

6  State  V.  Day,  (Ind.)  29  N.  E.  436  ;  Wise  v.  Frey,  7  Neb.  134.  Contra,  Stout  v. 
McNeill,  98  N.  C.  1,  3  S.  E.  915. 

7  Stanton  v.  Westover,  101  N.  Y.  265,  4  N.  E.  529  ;  Miller  y.  Estill,  5  Oh.  St.  508. 

8  Goudy  V.  Werbe,  117  Ind.  154,  19  N.  E.  764  j  Burton  v.  Baum,  32  Kas.  641,  5 
Pac.  3  ;  Mortley  v.  Flanagan,  38  Oh.  St.  401. 


336  THE    LAW    OF    PARTNERSHIP,  [CH.    X. 

S  253.  Right  of  Partnership  Creditors  to  Proceed  against  the 
Partners.  —  There  is  perhaps  no  great  practical  objection  in  per- 
mitting the  creditors  of  the  partnership  to  go  at  once  for  their 
payment  to  the  partners  personally,  and  their  private  property, 
where  there  is  no  insolvency  of  the  partnership  ;  because,  if  a  part- 
ner is  obliged  to  pay  such  a  debt,  he  may  charge  his  payment  to 
the  firm,  and  so  be  allowed  it  on  the  general  settlement,  or  in 
account.  This  is  the  present  rule  and  practice  ;  each  partner  being 
liable  m  soUdo,  although  the  wliolc  partnership  is  solvent  and 
accessible,  and  the  action  must  be  brought  against  all.  {ly  But 
it  would  be  more  consistent  with  the  true  theory,  and  in  all  respects 
a  better  rule,  we  think,  if  the  creditors  of  the  partnership  were  in 
no  case  —  fraud,  of  course,  excepted  —  permitted  to  proceed  against 
the  private  effects  of  a  partner  severally,  until  they  had  exhausted 
all  those  means  of  the  partnership  which  were  accessible  to  them, 
and  available  without  too  much  cost  or  difficulty,  (m) 

S  254.  Rights  of  Private  Creditors  against  a  Partner's  Interest.  — 
When  we  come  to  the  question  of  the  rights  and  remedies  of  a 
private  creditor  of  one  partner  in  respect  to  that  partner's  share 
of  the  partnership,  we  shall  find  much  uncertainty  still  remaining. 
We  apprehend,  however,  that  a  careful  adherence  to  two  principles 
•will  remove  most  of  the  difficulty.  One  of  these  is,  that  a  creditor 
of  any  debtor  can  secure  to  himself,  and  for  his  own  benefit  by 

(0  In   cases   at   law,   there   never   has  Ves.  119;  Abbot  w.  Smith,  2  W.  Bl.  949, 

been  a  doubt  of  the  iininediate  liability  of  per  De  Grey,  C.  J.  ;  Jones  v.  Clayton,  4 

each  partner  to  have  the  judgment  against  M.  &  S.  349  ;  Villa  v.  Jonte,  17  La.  Ann. 

the  firm  fully  satisfied  from  his  assets,  or  9  ;  Nicholson  v.  Janeway,  1  Green  (IST.  J.), 

of  his  liability  m  .so/i'f^o.  Woolley  i;.  Kell)',  285. 

1  B.  &  C.   68  ;  Herries  v.  Jamieson,  5  T.  (m)  See  ante,  §  248,  note  (k). 
R.  556  ;  Ld.  Eldou  in  Ex  parte  Ruffin,  6 

1  If  a  firm  creditor  attaches  the  separate  property  of  a  partner,  levies,  or  gets  a 
judgment  lien,  before  attachment,  levy,  or  judgment  by  an  individual  creditor,  the 
attachment  or  judgment  lien  of  the  firm  creditor  has  priority  over  the  lien  of  the  in- 
dividual creditor,  so  as  to  hold  the  separate  property.  Louden  v.  Ball,  93  Ind.  232 ; 
Gillaspy  v.  Peck,  46  la.  461 ;  Allen  v.  Wells,  22  Pick.  450 ;  Wisham  v.  Lippincott,  1 
Stock.  353  ;  Howell  v.  Teel,  29  N.  J.  Eq.  490  ;  Meech  v.  Allen,  17  N.  Y.  300  ; 
Barrett  o.  Furnish,  21  Ore.  17,  26  Pac.  861  ;  Cummings's  Appeal,  25  Pa.  268  ;  Bard- 
well  V.  Perry,  19  Vt.  292;  Straus  v.  Kerngood,  21  Gratt.  584.  But  see  Crockett  v. 
Grain,  33  N.  H.  542  ;  Bowker  v.  Smith,  48  N.  H.  Ill  ;  Moody  v.  Lucier,  62  N.  H.  584. 

It  has  been  intimated  that  if  there  are  partnership  assets  from  which  the  firm 
creditor  may  get  payment,  equity  will  interfere  to  protect  the  individual  creditor.  See 
l7i  re  Lewis,  8  N.  B.  R.  546  ;  hi  re  Sandusky,  17  N.  B.  R.  452  ;  Louden  v.  Ball,  93 
Ind.  232  ;  Meech  v.  Allen,  17  N.  Y.  300. 

For  the  same  reason,  a  del)t  due  to  an  individual  partner  may  be  garnisheed  by  a 
firm  creditor.  Fullam  v.  Abrahams,  29  Kas.  725  ;  Stevens  v.  Perry,  113  Mass.  380  ; 
Straus  «  Kerngood,  21  Gratt.  584.  Contra,  Jarvis  v.  Brooks,  23  N.  H.  136  ;  Weaver 
V.  Weaver,  46  N.  H.  188  ;  Myers  v.  Smith,  29  Ohio  St.  120. 


§  255  ]  OF    THE    REMEDIES    OP    THIRD    PERSONS.  387 

attachment  and  levy,  only  the  proi)erty,  interest,  or  right  which 
liis  debtor  has  ;  (w)  the  other  is,  that  this  he  may  thus  secure. 
The  first  point,  therefore,  is  to  adopt  no  theory  and  no  conclusion 
which  will  offer  to  an  attachment,  or  to  execution,  anything  more 
or  anything  else  than  the  debtor  has. 

§  255.  Partner's  Interest  in  Firm  Property.  —  What,  then,  is  the 
right  or  interest  or  proj)erty  of  a  partner  to  or  in  the  effects  of 
the  partnership?  Certainly,  not  a  separate  and  exclusive  right  to 
any  part  or  portion  of  it ;  or  any  right  of  any  kind  to  any  one  part 
rather  than  to  any  other  part ;  or  any  other  right  or  interest  than 
that  which  all  the  other  j)artners  have,  (o)  It  follows,  therefore, 
that  he  can  have  no  right  or  interest  which  is  such  in  kind  or  in 
degree  as  prevents  all  or  any  of  his  copartners  from  having  pre- 
cisely the  same  ;  and  the  right  which  he  has  is  the  same  as  theirs 
in  reference  to  the  whole  ami  every  j)art  of  the  proi)erty.  We 
cannot,  therefore,  define  this  right  of  any  one  partner  better  than 
we  have  already  done,  by  calling  it  an  ownership  of  all  the 
property  of  the  firm,  subject  to  the  ownership  of  the  copartners, 
who  hold  it  all  subject  to  his  ownership.  This  is  at  least  the 
foundation  of  his  property  and  interest ;  and  from  this  he  derives 
certain  rights  as  incident  to  it.  Thus,  if  no  special  agreement 
forbids,  each  partner  may  disencumber  his  interest  from  the  rights 
of  the  others,  by  giving  up  his  right  to  all  the  other  shares  or 
interests.  That  is,  each  one  may  Jiave  his  own  share  in  severalty. 
But,  to  do  this,  the  first  step  is  to  ascertain  what  this  share  is. 
For  it  must  be  remembered,  not  only  that  the  ownership  of  each 
partner  is  subject  to  the  ownership  of  all  the  others,  but  that 
all  the  partners  together  hold  the  property  subject  to  the  right  and 
oldigation  of  the  partnership  as  a  body  per  se,  to  apply  all  its  funds 
to  the  payment  of  all  its  debts.  (/>)  Or,  if  this  way  of  presenting 
this  right  be  objected  to,  then  we  say  that  all  the  partners  own  all 
the  ))roperty,  sul)ject  to  the  right  of  all  the  creditors  to  have  their 
debts  paid  and  satisfied  out  of  this  property,  {q} 

(a)  See  ante,  §  244,  note  (c),  and  cases  {q)  This  ownership  by  partners,  sub- 
cited.  And  see  Smith  v.  Emerson,  43  Pa.  ject  to  the  claims  of  creditors  of  tlie  firm, 
456.  is  made  by  Richardson,  J.,  the  foundation 

(o)   Lovejoy  V.  Bowers,  11  N.  H.   404  ;  of  an  able  dissenting  opinion  against  the 

Black  V.  Bush,  7  B.  Mon.  210  ;  Daniel  v.  right  of  a  sheriff  to  take  specific  articles  of 

Daniel,  9  B.  Mon.  195  ;  Church  i*.  Knox,  the  [lartuership  stock  for  the  debt  of  one. 

2  Conn.  518.     And  see  a7ite,  §  244,  note  Wiles  v.  Maddox,  26  Mo.  77,  84.   'So  by 

('•),  the  cases  with  admit  the  partner's  in-  Parker,  C.  J.,  in  Morrison  v.  Blodgett,  8 

terest  alone  to  be  taken.    See  Cookingham  N.  H.  238.    In  Boyce  v.  Coster,  4  Strobh. 

V.  Lasher,  38  Barb.  656.  Eq.  25,  it  is  held  that  the  share  of  each 

{p)  Washburn  V.  Bank  of  Bellows  Falls,  ])artner  in  the  joint  effects  is  subject  to 

19  Vt.  292;  Warren  V.  Willis,  38  Tex.  225.  his    partners'   liens    for   joint    demands, 

22 


338  THE   LAW    OF   PARTNERSHIP.  [CH.    X. 

The  partner  who  desires  to  separate  his  sliare  of  the  common 
property,' and  own  it  free  from  any  liability  to  others  or  any  in- 
terest in  others,  must  settle  the  concerns  of  the  partnership,  in  the 
first  place,  so  as  to  be  sure  that  the  debts  are  paid  or  provided  for  ; 
and  then  he  may  call  for  a  division  of  the  joint  projjerty,  and 
take  his  share  to  himself.  He  may  do  many  other  things  by  the 
consent  of  others  ;  he  may  in  that  way  sell  out  his  interests  to  a 
stranger,  or  to  a  third  person,  who  is  to  come  into  the  partner- 
ship;  or  he  may  sell  to  his  copartners.  But  no  such  arrangement 
liberates  his  share  from  the  debts  of  the  firm;  and  nothing  will 
but  their  payment,  or  the  agreement  of  the  creditors,  for  consider- 
ation, to  discharge  him.  What  the  law  ])ermits  him  to  do,  oi'  cause 
to  be  done,  without  tlie  consent  of  others,  is  to  settle  the  concern, 
pay  the  debts,  and  then  divide  the  surplus.  This  is,  ])ractically 
speaking,  the  whole  of  his  right.  And  this,  and  only  this,  is  there- 
fore the  right  which  his  private  creditor  can  acquire  by  attachment 
or  execution.  That  is,  his  creditor  may  put  himself  exactly  in  the 
place  of  his  debtor,  both  as  to  the  power  of  the  latter  and  as  to  its 
limitations,  (r) 

§  256.  Right  of  Private  Creditor  to  attach  such  Interest.  —  Tiie 
creditor  may,  therefore,  attach  the  interest  of  the  debtor  partner 
in  the  partnership  property.     This  is  universally  admitted,  (s) 

and,  though  aliened,  was  subject  to  their  (r)  Tappan    v.     Blaisdell,    5    N.     H. 

equities  for  a  settlement.     The   right  or  193.   See  Inbuscli  u.  Farwell,  1  Black,  566. 
lien  of  the  partners  on  the  joint  property  (s)  Chapman  v.  Koojis,  3  B.  &  P.  289  ; 

for  their  own  shares,  and  for  the  payment  Moody  v.  Payne,  2  Johns.  Cli.   548  ;  per 

of  the  ])artnership  debts,  is,  however,  an  Parker,  C.  J.,  in  Morrison  v.   Blodgett,  8 

equity  of  theirs,  and  not  primarily,  if  at  N.   H.  252,  253  ;  Jarvis  v.   Hyer,  4  Dev. 

all,  of  the  partnership  creditors,   Hunt  v-  367  ;  Johnson  v.  Evans,  7  M.  &  G.  240  ; 

Waterman,  2  R.  I.  298  ;  Miller  i'.  Estill,  Mayhew  v.  Herrick,  7  C.  B.  229  ;  Holmes 

5  Ohio  St.  508  ;  and  may  be  barred,  or  the  v.  Mentze,  4  A.  &  E.  127.     So  the  share 

property  removed  from  its  operation,  by  any  may  be  taken  on  mesne  process  in  those 

5o?ia_^(^fi  assignment.      Ex  jmrte  ^\i^n,  Q  States  which  confer  this  right.     Pierce  v. 

Ves.  119  ;  Ex  parte  Williams,  11  Ves.  3;  Jackson,  6  Mass.  242  ;  Burgess  v.  Atkins, 

Miller  v.  Estill,  5  Ohio  St.  508  ;  Smith  v.  ^  Blackf.   337  ;    Douglas  v    Winslow,   20 

Edwards,  7  Humph.   106  ;  Holderness  v.  Me.  89,  92,  93.     Thus,  in  Pierce  v.  Jack- 

Sliackels,  8  B.  &  '".  612  ;  Lingeii  v.  Simp-  son.  Parsons,  C.  J.,  says  :  "  A  creditor  of 

son,  1  Sim.  &  S.  600  ;  Campbell  v.  Mullett,  one  of  the  tirm  has  a  right  to  attach  the 

2  Swanst.   575  ;   Ex  parte  Fell,    10   Ves.  partnership   effects   against    all  creditors 

347;   Griffith    v.    Buck,    13    Md.     102;  whose  demand  is  not  upon  the  conqiany." 

Rogers  v.  Nichols,  20  Tex.  719  ;  Stout  v.  See  also  Allen  v.   Wells,    22  Pick.   450  ; 

Fortune,  7   Iowa,  183  ;  Jones  v.  Lusk,  2  AVashburn  v.   Bank  of  Bellows  Falls,   19 

Met.    (Ky.)   356;    Holmes   v.    Hawes,    8  Vt.  278  ;  Bardwell  r.  Perry,  19  Vt.  292  ; 

Led.    Eq.    21  ;    Wilson   v.    Soper,   13  B.  Dow   v.   Sayward,    12  N.   H.    276,    277  ; 

Mon.   414  ;  Reese  v.    Bradford,   13    Ala.  Page  v.  Carpenter,  10  N.  H.  77  ;  Hill  v. 

846  ;  Ex  parte  Peake,  1  Madd.  358.     See  Wiggin,  31  N.  H.  292  ;  Newman  ?•.  Bean, 

ante,  §  248,  note.  21   X.  H.  93  ;  James  ('.  Strattnn,  32  111. 

202. 


§  256.] 


OF    THE    REMEDIES    OF    THIRD    PERSONS. 


339 


But  can  he  attach  the  very  goods  of  the  partnership  ?  or,  to  state 
the  question  more  accurately,  Can  the  officer  having  the  writ  attach 
any  definite  portion  of  the  goods  of  the  partnership,  and  take  them 
into  liis  possession  ;  or  can  he,  holding  an  execution,  take  a  portion 
of  the  goods,  and  sell  them  to  satisfy  it  ?  There  is  much  diversity 
of  opinion  on  this  subject;  but  we  are  unable  to  regard  it  as  at  all 
doubtful  on  i)riuci|)le  ;  that  is,  the  conclusion  to  which  the  ])rni- 
cij)lcs  a|){)licable  to  the  case  lead  seems  to  us  inevitable.  If  there 
be  any  doubt,  it  must  arise  from  the  inability  of  the  law  of  ])avt- 
nershij)  to  clear  itself  of  the  last  remaining  influence  of  the  old 
notion,  that  |)artnersiiij)  was  but  one  form  of  tenancy  in  common,  (t) 
The  partner  himself  is  wliolly  without  the  right  (unless  by  agree- 
ment) of  ai)proi)riating  to  himself  in  severalty  anything  whatever 
which  belongs  to  the  common  stock.  All  the  partners  together 
cannot  do  it,  if  it  be  needed  for  the  payment  of  the  debts.  (?i) 
This  is  universally  conceded.  If  a  private  creditor  of  a  partner 
attaches  his  interest  in  any  form,  his  attachment  is  certainly 
avoided  by  the  insufficiency  of  the  joint  assets  to  pay  the  joint 
debts,  (v)  How,  then,  can  it  be  held,  either  that  the  partner,  before 
settlement  of  the  debts  and  a  division  of  the  property,  may,  by  his 
own  act,  make  some  portion  of  it  his  own  ;  or  that  the  partner 


{/)  And  that  this  is  so,  see  the  later 
cases  of  Johnson  v.  Evans,  7  J\I.  &  G. 
240  ;  Mayhew  v.  Herrick,  7  C.  B.  229,  in 
which  the  coui't  found  the  riglit  of  the 
sheriff  to  take  possession  of  specific  articles, 
on  the  old  law  as  it  stooil  in  Heydon  v. 
Heydon,  1  Salk.  392  ;  Jackeyr.  Butler,  2 
Ld.  Raym.  871  ;  Bachurst  v.  Clinkard,  1 
Shower,  169  ;  namely,  permitting  the  in- 
terest of  one  partner  to  be  taken  as  an 
undivided  moiety.  See  Garvin  v.  Paul,  47 
N.  H.  158. 

(m)  As  to  the  restriction  upon  the  part- 
ners to  assign  in  case  of  insolvency,  actual 
but  not  avowed  or  acted  upon  by  ]>rocess 
of  court,  see  Allen  v.  Centre  Vale  Co.,  21 
Conn.  130.  And  see  Jones  v.  Lusk,  2  Met. 
(Ky.)  356  ;  Dennis  v.  Green,  20  Ga.  386  ; 
Burtus  V.  Tisdall,  4  Barb.  571  ;  Lucas  v. 
Laws,  27  Pa.  211.  [A7itc,  §  248,  note.] 

(v)  And  this  is  true  even  though  the 
partnership  creditors  have  commenced  no 
action  for  the  recovery  of  their  debts. 
Pierce  v.  Jackson,  6  Mass.  242  ;  Fisk  v. 
Herrick,  6  Mass.  271  ;  Rice  v.  Austin,  17 
Mas.s.  206  ;  Commercial  Bank  v.  Wilkins, 
9  Me.  28  ;  Lyndon  v.  Gorham,  1  Gall.  368. 


The  true  reason  why  the  resulting  interest 
of  a  partner  in  the  partnership  effects  can- 
not be  attached  or  taken  on  execution  lies 
in  the  nature  of  the  interest,  which  is  not 
a  specific  thing,  having  a  distinct  and  in- 
dependent existence  ;  but  is  a  mere  result 
flowing  from  a  comparison  of  accounts, 
and  may  fall  on  either  side  as  the  balance 
happens  to  be.  A  specific  debt  or  demand 
may  be  unliipiidated,  but  nevertheless  has 
its  own  independent  existence,  and  may 
be  ascertained  by  computation  or  valuation. 
Kot  so  with  the  interest  of  a  partner  in  an 
unsettled  partnership  account.  It  results 
wholly  from  a  comparison  of  the  debts  and 
credits  of  the  partnership  in  the  first  in- 
stance, and  then  a  comparison  of  the 
accounts  between  the  partners  themselves. 
If  the  partnership  is  insolvent,  there  is  no 
balance  for  division  ;  if  solvent,  then  the 
account  between  the  partners  may  show 
that  the  partner  whose  interest  it  is 
attempted  to  attach  has  no  claim  to  any 
part  of  the  balance.  Agnew,  J.,  Alter  v. 
Brooke,  9  Phila.  258  ;  Knerr  v.  Hoffman, 
65  Pa,  126. 


340  "       THE    LAW    OF    PARTNERSHIP.  [CII.    X 

himself  lias  no  such  rii;ht,  but  that  his  private  creditor  may  say 
the  partner  has  such  right,  and  possess  himself  of  it  by  attach- 
ment or  levy  or  execution  ?  The  courts  which  have,  in  recent 
times,  permitted  a  sheriff  to  attach  the  })roperty  of  a  firm  in  a  suit 
against  a  partner,  and  sell  the  same  on  execution,  hold  also  that 
he  must  not  pa}^  this  over  to  the  plaintiff,  but  must  hold  the  ])ro- 
ceeds  subject  to  an  account  Avith  the  firm,  to  be  paid  to  them  for 
their  creditors  if  needed  for  debts  or  for  the  other  partners  if  it 
belongs  to  them  on  the  settlement.^  Or  else  that  the  purchaser 
takes  the  property  as  tenant  in  common  with  the  other  partners, 
and  subject  to  an  account  between  the  partners,  which,  if  it  event- 
uate against  him,  will  make  his  purchase  give  him  nothing.  (?t') 
This  is  an  acknowledgment  that  the  partner  holds  his  interest  in 
the  joint  property  on  terms  and  conditions  which  make  it  un- 
reasonable to  subject  that  property  itself  to  attachment  as  his 
property. 

§  257.  Right  to  Advantage  of  Private  Agreements  betw^een  Part- 
ners. —  We  should  say,  therefore,  that  there  is  no  general  rule  of 
the  law  of  partnership  which  rests  on  stronger  reason  than  that  a 
private  creditor  cannot  do  this.  But  this  rule  is  perhaps  subject  to 
some  qualification.  How,  for  example,  is  the  creditor  affected  by 
})rivate  agreements  or  arrangements  between  the  partners  ?  (:?-) 
These  may  be  of  two  kinds :  they  may  be  favorable  to  the  creditor, 
or  unfavorable.  Thus,  if  the  articles  of  copartnership  permitted 
anv  one  partner  to  withdraw  one-third  of  the  stock  at  his  pleasure, 
or  some  specific  articles  of  the  joint  property,  it  would  be  for  the 
advantage  of  the  creditor  to  acquire  this  right.  If  by  the  articles 
no  partner  could  ask  for  a  settlement,  or  withdraw  any  stock,  for 
five  years,  it  would  be  a  hindrance  to  the  creditor  to  be  delayed  so 
long. 

In  considering  the  question  how  a  private  creditor  of  the  part- 
ner would  be  affected  by  such  a  bargain,  if  it  were  unfavorable,  if, 
—  for  example,  the  articles  of  partnership  provided  that  an  account 
should  be  taken  annually,  and  all  the  profits  added  to  the  stock 

{ic)  Philli[)S  V.  Cook,  24  Wend.  398,  partnership   debts   are   paid.     Osborn    v. 

404  ;  Johnson  v.  Evans,  7  M.  &  G.  240 ;  McBride,    16    N.    B.    R.    22,     See    also 

Mayhew  v.  Herrick,  7  C.    B.  222  ;  Lucas  Menagh  v.  Whitwell,  52  N.  Y.  146  ;  Bank 

V.  Laws,  27  Pa.  211  ;  White  v.  Jones,  38  v.  Carrolton  R.  R.,  11  Wall.  624  ;  Garvin 

111.159.     If  the  interest  of  both  members  v.  Paul,   47  N.  H.   158;    Barrett  v.  Mc- 

of  a  partnership  consisting  of  two  be  sold  Kenzie,  24  Minn.  20,  1  N.  W.  123. 

on  separate  executions  against  each  to  the  (x)  Elliot  v.  Stevens,   38  N.   H.  311, 

same  purchaser,  he  gets  nothing  till  the  313. 

1  Powers  V.  Large,  69  Wis.  621,  35  N.W.  53. 


§  257  ]  OF    THE    REMEDIES    OF    THIRD    PERSONS.  341 

for  five  years,  and  that  the  partnership  should  not  be  dissolved,  or 
any  of  its  stock  withdrawn,  for  five  years  more,  and  eight  of  these 
ten  years  remained,  —  it  might  be  supposed  that  the  well-known 
principle,  in  constant  apjdication,  that  no  bargains  between  the 
partners  affect  injuriously  any  third  j)erson  dealing  with  the  part- 
nership in  ignorance  of  these  bargains,  would  apply  to  this  case. 
The  reason  of  this  principle  is,  that  all  persons  have  a  right  to  be- 
lieve that  all  partnerships  stand  on  the  common  ground  of  the  law, 
unless  they  are  informed  that  it  is  otherwise.  If  this  rule  were 
held  to  apply  to  an  attaching  creditor,  we  should  say  that  a  private 
creditor  of  a  partner,  who  knew  of  such  an  agreement  when  he 
gave  him  credit,  should  be  bourd  by  it  as  much  as  he  would  be  by 
any  other  lien  or  encumbrance  on  the  partner's  property.  But 
that,  if  he  had  no  such  knowledge  or  means  of  knowledge,  he  would 
be  unaffected  by  the  agreement.  There  are  cases  which  would, 
indirectly  at  least,  favor  this  conclusion.  (?/)  But  as  all  partners 
have  a  right  to  make  any  honest  disposition  of  their  affairs,  or  any 
arrangements  between  themselves,  which  do  not  injuriously  affect 
those  who  deal  with  the  firm,  we  should  prefer  to  say  that  an 
attaching  creditor  of  one  of  the  partners  would  be  bound  by  such 
a  bargain,  if  made  in  entire  good  faith,  and  with  no  reference  to 
any  insolvency  either  of  the  partner  or  of  the  firm.  Practically, 
however,  it  would  make  little  or  no  difference.  Where  the  interest 
of  the  debtor  was  sold  on  execution,  we  apprehend  that  this  would 
work  a  dissolution  of  the  partnership.  The  remaining  partners 
would  not  be  bound  to  admit  the  purchaser  as  their  partner  during 
these  years  ;  and,  on  the  other  hand  (the  delectus  pe7-sonaru7n  being 
mutual  and  equal),  the  purchaser  would  not  be  bound  to  become 
and  remain  a  partner  with  the  others,  against  his  wishes.  The 
parties  could,  of  course,  make  what  arrangement  they  chose.  But, 
if  they  could  not  agree,  the  legal  effect  of  the  sale  and  purchase 
would  be  a  dissolution  ;  and  the  legal  effect  of  this  would  be  an 
annulling  of  those  agreements,  and  a  right  on  the  part  of  the  pur- 
chaser to  call  at  once  for  an  account  and  settlement,  and  to  take 
his  share  in  severalty. 

On  the  other  supposition,  that,  if  the  partner  had  made  an 
agreement  adding  to  or  enlarging  his  rights,  the  principle  that  the 
creditor  takes  just  what  the  debtor  has,  and  is  puf  precisely  in  his 
place,  would  give  to  him  all  the  benefit  of  this  agreement.  And 
the  fact  that  he  did  not  know  it,  would  not  prevent  his  profiting 
by  it,  any  more  than  it  would  prevent  him  from  profiting  by 

(y)  See  Penn  v.  Stone,  10  Ala.  209. 


342  THE    LAW    OF    PARTNERSHIP.  [CH.    X, 

property,  theretofore  unknown  to  him,  of  the  partnership  or  of  the 
partner. 

§258.  Method  of  Attaching  Partner's  Interest.  —  The  general 
conchision  to  whieh  we  come,  —  and  on  this  we  rely  very  con- 
fidently,—  is,  that  a  separate  creditor  of  a  partner,  in  pursuing 
his  remedy  upon  property  of  the  firm,  can  attach  or  levy  upon  the 
partner's  interest  in  the  copartnership  ])roperty,and  upon  nothing 
else,  (a)  But  even  where  this  is  held,  there  is  much  diversity  and 
uncertainty  as  to  the  proper  manner  of  doing  it.  We  think,  how- 
ever, that  a  clear  apprehension  of  the  principle  itself  would  lead 
to  a  sufficient  and  unobjectionable  method  of  carrying  that  prin- 
ciple into  effect. 

We  have  no  doubt  that  this  interest  of  the  partner  may  be 
attached  as  well  as  any  other  interest  or  property,  and  levied  upon, 
and  sold,  to  satisfy  a  judgment.  The  manner  in  which  this  is 
done  must  depend  somewhat  upon  the  local  statutory  provisions. 
In  general,  an  officer  ordered  to  attach  this  interest  would  do  so 
by  indorsing  such  attachment  on  his  writ ;  he  should  then  certainly 
give  immediate  notice  to  the  debtor,  and  it  would  l)e  expedient 
and  proper  to  give  such  notice  to  the  other  partners.  This  interest 
would  remain  under  attachment.  The  firm  could  go  on,  dealing 
as  before,  buying  and  selling,  and  delivering  goods  ;  (5)  because 
this  attachment  did  not  take  effect  upon  any  specific  interest  in 
any  specific  goods,  but  on  the  interest  of  the  partner  in  the  part- 
nership concern. 

We  suppose  that  the  transactions  of  the  firm,  after  being  noti- 
fied of  the  attachment,  are  in  good  faith  ;  and,  if  so,  it  is  no  object- 
tion  to  them  that  the  debtor  himself  is  active  in  these  transactions, 
or  in  part  of  them.  But,  whether  he  be  active  or  not,  if  the  trans- 
actions are  fraudulent  as  against  the  creditor,  —  that  is,  intended 
to  delay  or  defeat  the  recovery  of  his  debt,  —  they  might  still  be 
valid  as  against  him,  and  in  favor  of  a  stranger  dealing  honestly 
with  the  firm  in  their  way  of  business :  but  would  be  void  in  favor 
of  the  creditor,  as  against  the  fraudulent  partners,  and  as  against 
any  third  party  co-operating  in  the  fraud,  or  dealing  with  the  part- 
ners knowing  the  intention  of  fraud,  and  by  thus  dealing  giving 

(a)  See  ante,  §  256,  note  (s)  ;  §  244,  ever   small,   of  the  specific   goods  under 

note  Ic).  execution,  is  a  dis.solution.     Id.  ;  Haber- 

{b)  The  property  of  the  partner  in  his  shon  v.    Blurton,    1   De   G.    &   S.    121  ; 

share  is  not  entirely  divested,  and  the  firm  Waters  v.  Taylor,  per  Lord  Eldoii,  2  Ves. 

consequently  dissolved,  till  sale  under  the  &  B.  301.     The  same-mode  of  attachment 

levy.   Morrison  v.  Blodgett,  8  N".  H.  238  ;  without  seizure  was  held  to  be  the  only 

Aspinall  v.  London  &  N.  W.  Pv.  Co.,   11,  proper   form   in    Pennsylvania.     Deal    v. 

Hare,  325  ;  but  a  sale  of  any  part,  how-  Bogue,  20  Pa.  229. 


§  259.]  OF    THE    REMEDIES    OF    THIRD    PERSONS,  343 

it  efficacy  ;  for  this  would  be  co-operation,  although  the  third  party 
had  no  other  object  in  view  but  his  own  interest. 

So  affairs  might  go  on  until  judgment  was  obtained,  and  an  exe- 
cution issued.  For,  if  not,  it  would  be  in  the  power  of  any  person, 
by  mere  suit  and  allegation  of  a  demand  against  a  partner,  to 
arrest  the  wiiole  business  of  a  partnership  more  effectually  than  he 
could  do  it  by  the  allegation  of  a  debt  against  the  partnership 
itself.i 

§  259.  Sale  of  Partner's  Interest  on  Execution.  —  When  execu- 
tion issued,  the  sheriff  would  sell  the  interest  of  the  partner  in 
the  ])artnership  in  the  same  manner  in  which  he  would  sell  any 
other  interest  or  riglit  which  he  levied  upon, —  as  a  right  to 
redeem,  or  the  like ;  and  the  proceeds  would  be  applied  to  satisfy 
the  execution,  (c)  2 

(c)  This  is  admitted  as  the  consequence  ruled   in  Phillips  i;.  Cook,  24  Wend.  397  ; 

of  such  levy  and  sale  in  the  case  of  Wiles  Waddell   v.  Cook,  2   Hill,    47,  and   note  ; 

V.  Maddox,  26  Mo.  77,  84.      The  doctrine  Walsh  v.  Adams,  3  Denio,  125,  &c.   Even 

of  the  majority  of  the  court  in  that  case  is  in  New  Hampshire,  the  unfortunate  effects 

sustained   by  the  decisions  of  every  law  of    the   ordinary    method    of    attachment 

court   except   those  of    New  Hampshire,  without  the  power  to  make  it  operative 

Morrison  ;-'.  Blodgett,  8  N.  H.  238  ;  Gib-  except  in  equity,  because  a  mere  contin- 

son   V.   Steven,   7    N.    H.   357  ;    Page  v.  gent  right  is  sold  that  no  one  cares  to  buy. 

Carpenter,  10  N.  H.  77  ;  Hill  v.  Wiggin,  have  been  so  severely  felt,  that,   in  Hill 

31  N.  H.  292  ;  and  of  Pennsylvania,  Deal  v.  Wiggin,  the  result  is  described  by  the 

V.  Bogue,  20  Pa.  229 ;  and  of  some  earlier  judge   as   aifording   a    secure    means   for 

cases  in  New  York,    Crane   v.  French,   1  fraudulent   debtors   to  get     their    money 

Wend.    313  ;  Ex  parte  Smith,  16  Johns,  securely  out  of  the  reach  of  the  law.    Hill 

102  ,    which  were   all  conclusively  over-  v.  Wiggin,  31  N.  H.  292,  296. 

1  The  method  of  procedure  in  levying  upon  partnership  property  for  the  debt  of 
one  partner  presents  much  difficulty.  The  legal  title  to  the  partnership  property  is 
necessarily  in  the  partners,  since  the  partiiersliip  is  not  recognized  at  law  as  capable  of 
holding  property.  The  partners  are  legally  joint  tenants,  holding,  however,  in  trust  for 
the  partners.  The  purchaser  on  execution  steps  into  the  shoes  of  the  debtor  partner, 
and  becomes  technically  a  tenant  in  common  with  the  other  partners.  Noonan  v. 
Nunan,  76  Cal.  44,  18  Pac.  98  ;  Marx  v.  Goodnough,  16  Ore.  26,  16  Pac.  918  ;  Randall 
V.  Johnson,  13  R.  I.  338. 

It  would  seem  that  since  the  interest  actually  sold  is  a  right  to  an  account,  and  a 
partner  has  no  beneficial  interest  in  a  specific  chattel,  the  sheriff  ought  not  to  levy 
upon  any  specific  chattel,  but  upon  the  partner's  interest  in  all  the  assets,  and  that  to 
levy  upon  a  specific  chattel  would  be  an  act  of  ti'espass.  But  though  some  author- 
ities hold  that  the  only  proper  course  is  to  levy  upon  all  the  assets  (Gerard  v.  Bates, 
124  HI.  150,  16  N.  E.  258;  Stumph  v.  Bauer,  76  Ind.  157),  and  that  the  actual 
removal  of  a  specific  chattel  is  trespass  (Sanborn  v.  Royce,  132  Mass.  594),  the  mere 
fact  of  levying  upon  and  selling  a  specific  chattel  seems  not  to  be  so  regarded.  On 
the  other  hand,  some  authorities  hold  it  proper  to  levy  upon  and  sell  a  partner's 
interest  in  a  .specific  chattel.  Hershfield  v.  Claflin,  25  Kas.  166  (sembk);  Fogg  v, 
Lawry,  68  Me.  78  ;  Randall  v.  Johnson,  13  R.  I.  338. 

2  Upon  execution  against  one  partner  the  .sheriff  may  sell  the  partner's  interest  in 
the  firm  assets  ;  but  the  purchaser  gets  only  a  right  to  ask  for  an  account,  and  to  have 


344  THE    LAW    OF    PARTNERSHIP.  [CH.    X. 

The  purchaser  would   not  become  a  partner  ;   but  he   would 
stand  in  the  place  of  the  partner  whose  interest  he  bought,  and 

paid  to  him  the  distributive  share  of  the  dehtor  paitner.  He  irets  no  title  to  an)'  specific 
property.  Farley  v.  Moog,  79  Ala.  148  ;  Tait  v.  Murphy,  80  Ala.  440,  2  So.  317  ;  Clark 
».  Cusliing,  52  Cal.  617  ;  Nooiian  r.  Nunan,  76  Cal.  44,  18  Pac.  98  ;  State  v.  Em- 
mons, 99  hid.  452 ;  Aultman  v.  Fuller,  53  la.  60  ;  People's  Bank  v.  Shryock,  48  Md. 
427  ;  Barrett  v.  McKeuzie,  24  Minn.  20  ;  Lane  v.  Lenfest,  40  Minn.  375,  42  N.  W. 
84  ;  Clements  v.  Jessup,  36  N.  J.  Eq.  569  ;  Deane  v.  Hutchinson,  40  N.  J.  Eip  83,  2 
Atl.  292  ;  Staats  v.  Bristow,  73  N.  Y.  264  ;  Mar.x  v.  Goodnough,  16  Ore.  26,  16  Pan. 
918  ;  Cogswell  v.  Wilson,  17  Ore.  31,  21  Pac.  388  ;  Wallace's  Appeal,  104  Pa.  559  ; 
Boro  V.  Harris,  13  Lea,  36  ;  Meyberg  v.  Steagall,  51  Tex.  351  ;  Lee  v.  Wilkins,  65 
Tex.  295  ;  McCutchon  v.  Davis  (Tex.),  8  S.  W.  123.  Conseijuently  if  the  firm  is 
insolvent  the  jmrchaser  gets  nothing.  Staats  v.  Bristow,  73  N.  Y.  264.  And  if  in  such 
a  case  a  sheriff  wrongfully  fails  to  levy,  damages  recoverable  against  him  are  nominal 
only.     State  v.  Emmons,  99  Ind.  452. 

It  would  seem  clear  on  principle  that  the  sheriff  should  not  deliver  actual  posses- 
sion of  the  property  to  the  purchaser  on  execution,  since  the  latter  gets  no  interest  in 
it ;  for  as  no  interest  passes  in  a  specific  chattel,  clearly  no  interest  passes  in  all  the 
chattels.  And  there  is  authority  to  this  effect.  Lane  v.  Lenfest,  40  Minn.  375,  42 
N.  W.  84.  Other  authorities  hold  that  since  the  purchaser  becomes  a  technical  tenant 
in  common  he  may  take  and  hold  the  property,  subject  to  the  right  of  the  other  part- 
ners to  have  it  applied  in  payment  of  the  firm  debts.  Wright  v.  Ward,  65  Cal.  525, 
4  Pac.  534;  Eandall  v.  Johnson,  13  R.  L  338;  Trafford  v.  Hubbard,  15  R.  I.  326, 
4  Atl.  762  ;  Lee  v.  Wilkins,  65  Tex.  295  (semhle  ;  otherwise  by  statute).  This  is 
held,  although  the  debtor  has  overdrawn  his  accounts  so  that  nothing  is  due  him  on 
an  accounting,  and  the  seizure  of  the  assets  will  break  up  the  business.  Wright  v. 
"Ward,  65  Cal.  525,  4  Pac.  534  ;  Trafford  v.  Hubbard,  15  R.  L  326,  4  Atl.  762.  But 
if  the  sheriff  sells  the  chattels  themselves,  rather  than  the  debtor's  interest  in  them,  it 
is  a  wrong  to  the  firm,  and  lie  becomes  a  trespasser  ab  -initio.  Daniel  v.  Owens, 
70  Ala.  297  {scmbh);  Snell  v.  Crowe,  3  Utah,  26,  5  Pac.  522. 

It  has  been  held  that  on  execution  upon  a  joint  debt  (not  a  firm  debt)  of  the  part- 
ners, the  sheriff  may  sell  a  chattel  of  the  partnership.  See  ante,  §  248,  note.  This 
case  is  hardly  consistent  with  the  principle  that  the  property  belongs  to  the  partner- 
ship and  not  to  the  partners. 

It  has  sometimes  been  held  that  no  harm  is  done  to  the  firm  by  the  sale,  and  that 
equity  will  therefore  not  enjoin  it.  Peck  v.  Schultze,  1  Holmes,  28  ;  Jones  v.  Thomp- 
son, 12  Cal.  191  ;  Brewster  v.  Hammet,  4  Conn.  540  (but  see  Witter  v.  Richard.s,  10 
Conn.  37);  Sitler  v.  Walker,  Freem.  Ch.  77;  Wickham  v.  Davis,  24  Minn.  167 
(where  the  reason  given  was,  that  the  partnership  was  insolvent);  Moody  v.  Payne,  2 
Johns.  Ch.  548.  But  by  the  weight  of  authority  the  sale  may  be  enjoined  till  an 
account  is  taken.  Bevan  v.  Lewis,  1  Sim.  376  ;  Osborn  v.  McBride,  3  Sawy.  590  ; 
Crane  v.  Morrison,  4  Sawy.  138  ;  Cropper  v.  Coburn,  2  Curtis,  465  ;  Moore  v.  Samjile, 
3  Ala.  319  (sembh)  ;  Newhall  v.  Buckingham,  14  111.  405  (sewiJ/c)  ;  Hubbard  v.  Cur- 
tis, 8  la.  1  ;  White  v.  W' oodward,  8  B.  Mon.  484  (semhle)  ;  Thompson  v.  Lewis,  34 
Me.  167  ;  Crooker  v.  Crooker,  46  Me.  250  ;  Thompson  v.  Frist,  15  Md.  24  {semhle) ; 
Sanders  v.  Young,  31  Miss.  Ill  (semhle)  ;  Cammack  v.  Johnson,  1  Green  Ch.  163 
{semhle);  Place  v.  Sweetzer,  16  Ohio,  142;  Nixon  v.  Nash,  12  Ohio  St.  647  (semhle)  ; 
Meyberg  v.  Steagall,  51  Tex.  351. 

Where  both  the  firm  creditors  and  the  separate  creditors  attach  the  firm  property, 
or  the  separate  creditors  attach  and  the  firm  then  goes  into  bankruptcy,  the  firm 
creditors  are  preferred  though  their  attachment  is  subsequent  in  time.  Taylor  r. 
Fields,  4  Ves.  396  ;  Garbett  v.  Veale,  5  Q.  B.  408  ;  King  v.  Sanderson,  Wightw.  50  ; 
Clark  V.  AUee,  3  Harr.  80  ;  O'Bannon  v.  Miller,  4  Bush,  25  ;  Howell  v.  Com.  Bank, 
5  Bush,  93  ;    Commercial  Bank  v.  Wilkins,  9   Me.  28  ;    Douglas  v.  Winslow,  20  Me. 


§  2G0.]  OP    THE    REMEDIES    OF    THIRD    PERSONS.  345 

acquire  all  of  his  rights  wliich  were  necessary  to  make  this  inter- 
est valuable  and  availal)lc.  That  is,  he  would  have  the  right  to 
call  for  an  account,  and  a  settlement  of  the  partnership  concern, 
and  to  take  his  share  of  any  sur[)lus  in  severalty.  And  a  court 
of  equity  would  probably  render  him  the  same  assistance  in 
obtaining  or  enforcing  these  rights  that  they  would  to  the  partner 
whose  interest  he  has  bought.  This,  however,  like  almost  everv 
thing  else  in  equity,  would  be  addressed  to  the  discretion  of  the 
court,  and  could  not  be  claimed  as  a  matter  of  strict  and  techni- 
cal right.  For  if  the  case  were  one  which  admitted  of  easy  and 
accurate  estimate,  and  certainly  sufficient  tender,  and  this  were 
made,  the  court  would  not  require  a  settlement  which  would  be 
injurious  to  the  partnership,  and  was  asked  for  by  this  purchaser 
only  for  oppressive  or  dishonest  ])urposes.^ 

§  2()0.  Garnishment  of  other  Partners. — An  additional  step  to 
that  of  attaching  the  separate  partner's  interest  has  been  sug- 
gested on  high  authority,  (d)     It  is  to  sue  the  indebted  partner  by 

(d)  In  Jlorrison  v.  Blodgett,  8  N.   H.  agninst  one  partner  of  the  creditor  firm  ; 

238,  Parker,  C.  J.,  suggested,  as  a  means  and    in   Lyndon   i>.   Gorham,    1   Gallison, 

of  rendering  available  an   attachment  of  261,    Mr.    Justice   Story    recognized    that 

the  partnership  effects  for  the  private  debt  course  as  likely  to  obviate  some  of    the 

of   a  paitner,   the  expediency  and  neces-  dilfi:3ulties   in   the   case   then    before    the 

sity  of  summoning  the  other  partners  as  court.      But    we    know    of    no    case    in 

trustees.     See  also  Treadwell  v.  Brown,  43  which   a   portion  of  the  members  or  the 

N.   H.  290.      A    similar   suggestion    had  whole  partnership  have  been  held  as  trus- 

previously  been  made  by  Parsons,  C.  J.,  tees  in  a  suit  of  foreign  attachment,  upon 

in  Fisk  v.  Herrick,  6  Mass.  271,  where  a  the   private   debt   of   one   partner.      The 

debtor  of  the  partnership   had    been   in-  course   thus   suggested    and    approved    is 

eff  ctually  summoned  as  trustee  in  a  suit  entitled  to  the  highest  consideration,  and 

89  {semble)  ;  Thompson  v.  Lewis,  34  Me.  167  (i^cmhh)  ;  Pierce  v.  Jackson,  6  Mass. 
242;  Trowbridge  v.  Cushman,  24  Pick.  310;  Tappan  v.  Blaisdell,  5  N.  H.  190; 
Linford  v.  Linford,  4  Dutch.  113  [scmbh);  Eighth  Nat.  Bank  v.  Fitch,  49  N.  Y. 
539  ;  Roberts  v.  Oldham,  63  N.  C.  297  ;  Overliolt's  Appeal,  12  Pa.  222  :  Coover's 
Appeal,  29  Pa.  9  ;  Crawford  v.  Baum,  12  Rich.  75.  But  contra,  if  at  the  time  of  the 
attachment  the  firm  was  solvent,  Willis  v.  Freeman,  35  Vt.  44  ;  Lamoille  V.  R.  R.  v. 
Bi.xby,  55  Vt.  235.  See  Cunningham  v.  Gushee,  73  Me.  417  ;  De  Caussey  v.  Baily,  57 
Tex.  665. 

1  Garnishment.  —  As  with  attachment,  so  it  is  with  garnishment.  A  creditor  of 
an  individual  partner  cannot  reach  a  firm  debtor,  since  no  part  of  the  debt  is  due  to 
the  partner  ;  it  is  all  owed  to  the  firm.  Church  v.  Knox,  2  Conn.  514  ;  Orescent  In- 
surance Co.  V.  Bear,  23  Fla.  50,  1  So.  318;  Trickett  v.  Moore,  34  Kas.  755,  10  Pac. 
147  ;  Peoples'  Bank  v.  Shryoek,  48  Md.  427  ;  Hawes  v.  Walthani,  18  Pick.  451  ; 
Tobey  r.  McFarlin,  115  Mass.  98  ;  Markham  v.  Gehan,  42  Mich.  74  :  Barrett  v.  Mc- 
Kenzie,  24  Minn.  20  ;  Williams  v.  Gage,  49  Miss.  777  ;  Sheedy  v.  Bank,  62  ]\Io.  17  ; 
Atkins  V.  Prescott,  10  N.  H.  120  (semb/e)  ;  Myers  v.  Smith,  29  Oh.  St.  120  ;  Sweet 
V.  Read,  12  R.  L  121;  Johnson  r.  King,  6  Humph.  233  ;  Towne  v.  Leach,  32  Vt. 
747;  Singer  v.  Townsend,  53  Wis.  126.  But  see  Parker  v.  Wiight,  66  Me.  302 
{semble)  ;  McCarty  v.  Emlen,  2  Yeates,  190,  2  Dall.  277  ;  Schatzill  v.  P>olton,  2  McC. 
478,  3  McC.  33. 


34G  THE    LAW    OF    PARTNERSHIP  [CH.    X. 

process  of  foreign  attachment  or  garnishee  process  or  trustee  pro- 
cess, as  it  is  variously  called,  and  make  the  other  partners 
trustees.  They  would  then  be  required  to  answer  under  oath; 
and  the  interests,  rights,  and  property  of  the  })rincipal  defendant 
in  their  hands  might  thus  be  more  effectually  held.  It  might  be 
that  our  courts  would  find  some  difficulty  hi  the  complete  appli- 
cation of  such  a  system  to  practise,  unless  they  were  aided  by 
legislative  provisions  ;  (e)  and  perhaps  no  other  questions  of  com- 
mercial law  call  so  loudly,  at  this  time,  for  such  provisions.^ 

§  261.  Effect  of  Insolvency.  —  We  have  already  remarked,  that 
the  attachment  by  a  separate  creditor  of  a  partner,  of  his  debtor's 
interest  in  the  partnership,  or  of  the  goods  themselves,  is  vacated 
by  the  insolvency  of  the  partnership,  which  leaves  in  the  partner 
no  interest,  and  requires  all  the  i)roperty  to  pay  the  debts.  (/) 
But  it  is  also  vacated  by  the  fact  of  insolvency,  prior  to  any  proceed - 
inu's  founded  thereon,  whether  there  be  a  general  process  of 
insolvency  or  suits  by  individual  creditors.  But  a  distinction 
seems  to  be  taken  in  this  respect  between  the  case  of  a  dormant 
(that  is,  secret)  partner  and  a  known  partner.  Thus,  if  a  man 
in  business  have  a  dormant  partner,  and  a  creditor  of  the  first 
sue  him  and  attach  his  goods,  this  attachment  shall  not  be  post- 
poned to  a  later  attachment  by  another  creditor,  who  discovers 
this  unknown  partner,  and  makes  him  defendant,  {g)  For,  if 
both  creditors  stand  on  equal  ground  as  to  their  claims,  the  fact 
that  one  happens  to  discover,  and  sues,  a  partner  not  publicly 
known,  should  give  him  no  advantage  over  one  who  sues  in  fact 
the  partnership,  and  uses  all  the  names  that  the  firm  enables  him 
to  know.  It  is  not  so,  however,  in  its  reason,  and,  we  think,  not 
on  authority,  where  the  creditors  stand  on  different  grounds. 
Thus,  if  the  first  creditor  dealt  with  the  known  partner  only,  and 
did  not  deal  with  him  in  fact  on  partnership  account,  but  did 

may  prove  to  be  practically  the  best  that  Treadwell  v.  Brown,  41  N.  H.  12;  Bui- 

can  be  pursneil  in  the  present  condition  ol  finch  v.  Winchenbach,  3  Allen,   161. 
tlie  law.     But  it  is  obvious  that  the  law  of  (/)   Lyndon  v.  Gorham,  1   Gall.  367; 

partnership,  taken  in  connection  with  the  Commercial  Bank  ?'.  Wilkius,  9  Me.   28. 

law  of  trustee  process  or  foreign   attach-  And   see  Fisk   v.  Herrick,  6   Mass.  271  ; 

nient,  offers  some  difficulties  ;  and  we  do  Upham  v.  Naylor,  9  Mass.  490  ;    Church 

not  know  that  this  course  has  been  gener-  v,  Knox,  2  Conn.  fiH. 
ally  adopted.  (g)  French  v.  Chase,  6  Me.  166  ;    Lord 

(c)  See  Field  v.  Crawford  and  Trs.,    6  v.  Baldwin,  6  Pick.  348.     See  also  Cam- 

Gray,  116  ;   Lane  v.   Felt,  7  Gray,   491  ;  mack  v.  John.son,  1  Green,  Ch.  164  ;  Allen 

V.  Dunn,  15  Me.  292. 

1  One  partner  cannot  be  garnisheed  as  debtor  of  his  copartner  on  account  of  an 
unascertained  balance.  Birtwhistle  v.  Woodward,  95  Mo.  113,  7  S.  W.  465 ;  Elmer  v. 
Hall{Pa.),  23  Atl.  971. 


§  262]  OF    THE    REMEDIES    OF    THIRD    PERSONS.  347 

attach  partnership  proj)erty,  then  this  attaclimont  must  yield  to 
one  on  winch  partnership  property  is  taken  in  a  suit  projierlv 
hrought  a<^ainst  all  the  partners.  And  we  apprehend  the  result 
should  be  the  same  altliough  the  known  partner  was  the  only 
defendant  in  both  writs.  That  is,  if  a  man  transacted  business 
on  his  sole  account,  and  also  had  a  secret  and  silent  partner,  and 
with  him  transacted  another  business,  which  was  distinctly  a 
partnership  business,  and  became  insolvent,  and  creditors  in  his 
own  business  attached  his  property,  and  creditors  in  the  partner- 
ship business  also  attached  the  property,. either  before  or  after 
the  others,  we  suppose  that  a  court  of  equity,  if  it  could  discrimi- 
nate the  debts  and  discriminate  the  property,  w^ould  give  relief, 
and  appropriate  the  partnership  property  to  the  partnership  debts, 
and  the  private  fjroperty  to  the  private  debts  And  we  should 
suppose  that  courts  of  law  would  now,  generally  at  least,  follow 
the  same  rule  to  the  same  result. 

§  262.  Set-off. —  [A  partnership  debtor  cannot  set  off  against 
the  firm  claim  a  debt  due  him  from  a  partner  individually  ;i 
though  it  may  be  done  if  all  the  partners  assent.^  So  a  partner- 
ship debt  cannot  be  used  as  a  set-off  against  the  claim  of  a  partner 
individually,  as  by  a  bank  against  the  deposit  of  a  partneiv^  But 
where  a  partnership  debt  is  reduced  to  a  judgment,  since  the 
judgment  runs  against  the  partners  individually,  it  may  be  used 
as  a  set-off  aganist  the  claim  of  an  individual  partner.*] 

J  Clark  V.  Tnylor,  68  Ala.  453  ;  Watts  v.  Sayre,  76  Ala.  397  (judgment  debts)  ; 
Cannon  v.  Lindsey,  85  Ala.  198,  3  So.  676  ;  Edwards  v.  Parker,  88  Ala.  356,  6  So. 
68-4;  Morganthau  v.  King,  15  Col.  413,  24  Pac  1048;  Weil  v.  Jones,  70  Mo  560; 
Payne  v.  O'Shea,  84  Mo.  129;  Colwell  v.  Weybosset  Nat.  Bank,  16  R.  I.  288,  15 
Atl   80. 

2  Montz  V.  Morris,  89  Pa.  392 

"  International  Bank  v.  Jones,  119  111.  407,  9  X.  E.  885  ;  Raymond  v.  Palmer,  41 
La  Ann.  425,  6  So.  692.  Contra,  Eyrich  v.  Capital  State  Bank,  67  Miss.  60,  6  So. 
615  (because  by  statute  an  individual  partner  may  be  sued  alone  for  a  firm  debt), 

*  Seligmann  v.  Heller  Bros.  Clothing  Co.,  69  Wis.  410,  34  N.  W.  232, 


348  THE    LAW    OF    PARTNERSPIIP.  [CH.    XT. 


CHAPTER   XI. 

ON    THE    REAL    ESTATE    OP    A    PARTNERSHIP. 

§  2G3.  Partnership  Land.  —  Formerly,  the  title  of  this  chapter 
could  have  found  no  place  in  a  treatise  on  the  law  of  partnership. 
The  distinction  which  existed  at  common  law  between  real  estate 
and  personal  estate  has  been  bridged  over  only  of  late.  It  used 
to  be  deemed  that  the  purposes  of  partnership,  and  the  means 
which  it  used,  excluded  all  reference  to  land,  and  that  the  law 
of  partnershii)  could  not  with  propriety  speak  of  land,  (a)  But 
in  England  this  doctrine  has  long  been  greatly  modified  ;  and 
now,  by  the  assistance  of  equity,  a  tolerably  convenient  and  con- 
sistent system  is  in  force  there.  Mr.  Justice  Story,  in  his  treatise 
on  Partnership,  (aa)  remarlvs:  "The  doctrine  (as  to  real  estate), 
under  these  circumstances,  must  be  considered  as  open  to  many 
distressing  doubts."  We  apprehend,  however,  that  a  careful  con- 
sideration of  American  cases  will  show  that,  in  this  country,  most 
of  these  doubts  have  been  dispelled.  Indeed,  few  questions  re- 
main, in  relation  to  this  subject,  as  to  which  authority,  illustrated 
by  the  reasons  and  principles  which  are  unquestionably  appli- 
cable, do  not  give  us  a  sufficiently  distinct  and  definite  answer. 

§  264.  Difference  between  English  and  American  Lavr.  —  There 
are  two  reasons  why  we  might  have  expected  an  improvement  in 
the  American  law  on  this  subject  over  that  of  England.  One  is, 
our  less  rigid  conservatism  ;  or,  in  other  words,  the  wealter  in- 
fluence of  precedent  and  prescription,  and  the  greater  facility 
of  change.  This  reason,  however,  applies  to  the  whole  body  of 
our  law.  The  other  applies  peculiarl}'  to  this  topic.  It  is,  that 
land  is,  with  us,  vastly  more  a  matter  of  merchandise  than  in 
England.  It  is  every  day's  practice  for  individuals  and  partner- 
la)  In  Pitts  V.  Waugh,  4  Mass.  424,  the  rule,  jus  accrescendi  inter  mercafore.% 
where  it  was  sought  to  charge  a  person  as  locvm  non  liahet,  applied  only  to  personal 
partner  in  an  action  for  the  price  of  land  property  ;  and  it  was  also  thought  neces- 
sold  to  the  ostensible  partner  alone,  the  sary  to  provide  against  survivorship  in 
court  said,  "  The  law-merchant  does  not  the  partnership  articles  Jeffreys  v.  Snell, 
extend  to  speculations  in  land;"  and  it  1  Vern.  217. 
was  formerly  considered  in  England  that  [aa]  Section  P-3. 


§  265.]  OF    TUE    REAL    ESTATE    OF    A    PARTNERSHIP.  849 

ships  to  engage  in  business,  of  wLicli  tlic  principal,  and  some- 
times the  only  element  is  trade  or  speculation  in  land.  (6)  There 
is  nothing  to  make  this  illegal,  or,  within  proper  bounds,  impolitic 
or  undesirable.  At  all  events,  the  law  recognizes  it,  and  must 
take  charge  of  it,  as  of  all  other  social  or  business  movements. 
Questions  to  which  such  business  as  this  gives  rise  not  only  come 
before  our  courts  with  great  frequency,  and  demand  for  their 
settlement  well-considered  and  well-established  principles,  but 
they  come  in  such  a  f(jrm  as  to  compel  important  modifications 
of  the  technical  law  of  real  estate,  (c) 

It  must  be  obvious  that  these  questions  connect  themselves 
"with  many  others.  But  the  remaining  influence  of  the  peculiar 
law  of  real  estate  —  an  influence  which  must  remain  until  our 
whole  system  of  law  is  changed  by  legislative  authority  —  im- 
parts to  all  the  details  of  this  subject  a  character  peculiar  to 
them  and  common  to  them  all  ;  and  it  is  thought  best  to  gather 
under  one  head  all  that  the  law  and  practice  of  our  American 
courts  have  to  say  about  the  real  estate  of  a  partnership. 

§  265.  When  and  how  Real  Estate  becomes  Partnership  Prop- 
erty.—  The  general  rule  is  undoubtedly  this:  Real  estate  pur- 
chased for  partnership  purposes,  and  appropriated  to  those 
purposes,  paid  for  by  partnership  funds,  and  necessary  for  part- 
nership   purposes,    always    becomes    partnership    property,  (^e)  ^ 

{h}  This,  after  some  doulits,  see  Pitts  c.  3  How.  (Miss. )  .360  ;  Markham  v.  Merrett, 

Waugh,  4  Mass.  424;  Blake  v.  Nutter,  19  7  How.  (Miss.)  437. 

Me.  16  ;  Coles  v.  Coles,  15  Jolins.  169,  iii  (e)  Dyer  v.  Clark,  5  Met.  562 ;  Howard 

cases  occurring  before  courts  of  law,  was  v    Priest,  5  Met.   582  ;  Buniside  v.  Mei-- 

early    recognized   in    this    country.      See  rick,    4  Met.    587 ;  Delmonico  ".   Guilla- 

Dudley    v.    I.ittlefield,   21    Me.   418 ;  Fall  unie,     2    Sandf.     Ch.    336 ;    Buchan     t-. 

River  Whaling  Co.  v.  Borden,   10  Gush.  Sumner,  2  Barb.  Ch.   165,   197  ;  Duhring 

469  ;  Black  v.   Black,  15  Ga.   445  ;  Gray  v.    Duhring,    20    Mo.    174 ;    Matlock    v. 

V.  Palmer,  9  Cal.  616  ;  Smith  v.  Jones,  12  Matlock,  5  Ind.  403  ;  Patterson  v.  Blake, 

Me.  337  ;  Ludlow  v.   CoojX'r,  4  Ohio  St.  12    Ind.    436  ;    Davis    v.    Christian,     15 

1  ;  Coster  v.  Clarke,  3  Edw.  Ch.  238  ;  Gratt.  11  ;  Pierce  v.  Trigg,  10  Leigh, 
Patterson  j;.  Grace,  10  Ala.  444  ;  Row-  246  ;  Jones  v.  Neale,  2  Pat.  &  H.  339  ; 
land  V.  Boozer,  10  Ala.  690  ;  In  re  Warren,  Lacy  v.   Waring,  25  Ala.  625  ;   Andrews 

2  Ware  (Davies),  320.  And  in  England,  v.  Blown,  21  Ala.  437  ,  Owens  r.  Collins, 
Dale  V.  Hamilton,  5  Hare,  369  ;  Darby  v.  23  Ala.  837  ;  Pugh  v.  Currie,  5  Ala.  446  ; 
Darby,  3  Drewry,  495.  Tillinghast    i:  Champlin,  4    R.    I.    173  ; 

(c)  Dudley  v.  Littletield,  21   Me.  418;  Buckley  v  Buckley,  11    Barb.  43,  Blake 

Coster  V.  Clarke,  3  Edw.  Ch.  238  ;  Darby  v.  Nutew,  19  Me    ie  ;  Holland  i\  Fuller, 

V    Darby,  3   Drewry,    495  ;    Dilworth    v.  13  Ind.   195,  199  ;  Overholt's  Appeal,  12 

Mayfield,  36  Miss.  40  ;  Brady  d.  Calhoun,  Pa.  222  ;  Deloney  v.  Hutcheson,  2  Rand 

1  Pen.  &  W.  140  ;  Woodbridge  v.  Wilkins,  183  ;    Hunt  v.  Benson,  2   Humph.   459 ; 

^  That  a  firm  may  purchase  and  deal  in  lands  is  now  perfectly  well  settled.  This 
is  true  although  there  are  no  written  articles.     Allison  v.  Perry,  130  111.  K,  22  N.  E. 


350  THE   LAW    OF   PARTNERSHIP.  [CH.    XI. 

Nor  does  it  seem  to  be  material  in  what  manner,  or  by  what 
agency,  the  land  is  bought,  or  in  what  name  it  stands.  (/)     It 

Forde    v.   Herron,    4  Munf.    316;    Goo.l-  11    Sim.    491;   Townshend   v.   Devaynes, 

burn  V.  Steveus,  5  Gill,  1  ;  Si,:;ouiney  v.  MoiUai,ni   od    Part.    Apj).    96.       And   see 

Muiiii,  7   Conn.  11  ;  Jarvis  v.  Brooks,  27  Roper  on  Husb.  &  \V.  {Jar.,  ed.)  346,  n.  , 

N.    H.  37  ;  Cox  v.  McHurney,    2  Sandf.  Broom    v.    Broom,  3    Myliie  &    K.    443  ; 

561 ;    Brooke    v.    Washington,    8    Gratt.  Morris  v.    Barrett,   3   Younge  &   J.    384. 

248  ;  Peck  v.  Fisher,  7  Cusli.    386  ;  Fall  See  also  Kendall  v.  Rider,  35  Barb.  100  ; 

River  Whaling  Co.  v.   Borden,   10  Cusli.  Dupuy    v.    Leavenworth,    17    Cal.    262  ; 

458  ;  Savage  v.  Carter,  9  Dana,  408,  410,  Butfum  v.   Biilfum,    49   Me.    108  ;  Moran 

411;    Fairchild    v.    Fairchild,    64    N.   Y.  v.   Palmer,    13  Mich.    367;    North   Penn. 

471.     These   cases   maintain   the   general  Coal  Co.'s  Appeal,   45  Pa.  181  ;  Willis  v. 

proposition   in   America.     And  this  {lart-  Freeman,  35    Vt.    44  ;    Fowler  v.   Bailej', 

nersliip   title   may    be    proved    by    parol,  14  Wis.  125. 

notwithstanding   the   paper   title.      Sher-  (/)  Gilchrist,    C.    J.,    in    Jarvis     v. 

wood    V.    St.    Paul,  &c.    21    Minn.    127  ;  Brooks,  27  N.  H.   37,  67  ;  Dyer  v.  Clark, 

York  V.  Clemens,  41  Iowa,  93  ;  ante,  §  6.  5  Met.   562  ;  Howard    v.    Prie.st,   5   Met. 

So   in    England,    Phillips    v.    Phillips,    1  582 ;  Pugh  v.  Currie,  5  Ala.  446. 
Mylne  &  K.  649 ;  Houghton  i;.  Houghton, 

492.  Thus,  a  firm  may  give  a  lease  of  its  land.  Williams  v.  Shelden,  61  Mich.  311, 
28  N.  W.  115.  The  owner  of  the  land  is  the  firm  ;  the  individual  partners  have  no 
beneficial  interest  in  the  land.  As  in  the  case  of  personal  property,  the  interest  of  a 
])artner  in  the  partnership  real  estate  is  only  to  a  distributive  share  upon  a  final 
accounting  and  settlement.  Railsback  v.  Lovejoj',  116  111.  442,  6  N.  E.  504;  Bowen 
V.  Billings,  13  Neb.  439,  14  N.  W.  152  ;  Du  Bree  v.  Albert,  100  Pa.  483.  So  where 
one  partner  sells  his  interest  in  the  partnership  to  a  stranger,  who  is  admitted  to  the 
firm  by  parol,  he  has  the  same  interest  in  the  partnership  real  estate  as  the  other  part- 
ners ;  his  assignor  retains  only  a  naked  legal  title.  Marsh  v.  Davis,  33  Kas.  326,  6 
Pac.  612  ;  Collner  v   Greig,  137  Pa.  606,  20  Atl.  938. 

The  nature  of  the  firm's  interest  in  real  estate  is  strikingly  shown  by  the  case  of 
Henry  v.  Anderson,  77  Ind.  361.  In  that  case  it  apjieared  that  one  partner  made  a 
deed  of  land  owned  by  him  to  the  firm,  but  retained  the  deed.  It  was  objected  that 
the  deed  was  inoperative  because  he  was  both  grantor  and  grantee  ;  but  it  was  held 
valid.  His  entire  title  was  divested,  and  vested  in  the  firm  ;  and  the  deed  was 
sufficiently  delivered. 

Since  a  partner  has  no  individual  interest  in  the  land  he  cannot  ask  for  partition. 
Pennybacker  v.  Leary,  65  la.  220,  21  N.  W.  575;  Kru.schke  v.  Stefan,  (Wis.)  53 
N.  W.  679.  And  a  partner  who  does  not  hold  a  share  of  the  legal  title  is  not  a  ne- 
cessary party  to  a  suit  for  partition,  brought  by  one  with  whom  the  partnership  is  a 
tenant  in  common.     Railsback  v.  Lovejoy,  116  111.  442,  6  N.  E.  504. 

But  the  partners  may  agree  to  withdraw  partnershij)  land  from  the  common  stock 
and  make  it  the  individual  property  of  one  or  both  partners  ;  and  if  this  is  done  in 
good  faith  the  partnership  creditors  cannot  object.  Shafer's  Appeal,  106  Pa.  49  ; 
Beckwith  v.  Manton,  12  R.  I.  442,  Kendall  v.  Hackworth,  66  Tex.  499.  It  may  he 
done  by  parol,  since  it  is  not  technically  a  conveyance  of  the  legal  title,  but  a  ]iartition 
by  joint  tenants.     Murrell  v.  Mandlebaum  (Tex.)  19  S.  W   880. 

As  in  case  of  personal  property,  so  in  the  case  of  real  estate,  a  partner  cannot 
claim  a  homestead  or  other  exemption  from  attachment  or  levy  out  of  the  partnership 
real  estate.  Short  v.  McGruder,  22  F.  R.  46;  Levy  v.  Williams,  79  Ala,  171; 
Trowbridge  v.  Cross,  117  111.  109,  7  N.  E.  347  ;  Van  Staden  v  Kline,  64  la.  180,  20 
N.  W.  3  ;  Drake  v.  Moore,  66  la.  58,  23  N.  W.  263  ;  Hoyt  v.  Hoyt,  69  la.  174,  28 
N.   W.   500  (against  partner  after  payment  of   firm   creditors)  ;  Lindley  v.  Davis,  6 


§  265.]      OF  THE  REAL  ESTATE  OF  A  PARTNERSHIP.         351 

may  be  conveyed  to  all  the  partners  as  tenants  in  common,  and 
this  perhaps  is  the  usual  and  the  best  way  ;  (^)  or  to  one  or  more 

(;/)   Dyer  v.  Clark,  5  Met.  562  :  Howard  ute,   deeds   to  the  partners,  by  their  in= 

V.   Triest,  5  Met.    582.     See  Colluiiib  v.  dividual  names,    create   at   law,    in   such 

Read,  24    N.   Y.   505  ;    and   as   in    many  States,  an  estate  in  common. 
States  joint  tenancy  is  abolished  by  stat- 

Mont.  453,  13  Pac.  118  ;  Spiro  v.  Paxton,  3  Lea,  75  ;  Chalfant  v.  Grant,  3  Lea,  118. 
Contra,  Hunnicutt  v.  Summey,  63  Ga.  586  ;  Blanuhard  v.  Paschal,  6S  Ga.  32  (by 
interpretation  of  Constitution).  In  South  Dakota  the  lirm  may  claim  an  exemption, 
which  thereupon  enures  (as  individual,  not  as  firm  property)  to  the  pairners  in  pro- 
portion to  their  shares.  Betts  v.  Letcher,  (S.  D.)  46  N.  W,  193.  In  South  Carolina 
it  is  held  that  individual  paitners  may  claim  an  exemption,  but  only  when  there  is  a 
surplus  of  assets  over  liabilities,  since  then  the  partners  have  an  individual  interest  in 
the  land.  Ex  parte  Karish,  32  S.  C.  437,  11  S.  E.  298,  explaining  Moyer  v.  Drum- 
mond,  32  S.  C.  165,  10  S.  E.  952. 

If  the  real  estate  has  been  so  treated  by  the  partners  acting  in  good  faith,  as  to 
have  become  the  individual  jnoperty  of  one  partner,  he  may  claim  exemption  out  of  it. 
Lindley  v.  Davis,  7  Mont.  206,  14  Pac.  717;  Wiesenfeld  v.  Stevens,  15  S.  C.  554; 
Swearingeu  /•.  Bassett,  65  Tex.  267.  As  by  sale  to  one  partner  of  all  the  interest  of 
the  other.  Levy  v.  Williams,  79  Ala.  171.  Of  course  such  a  withdiawal  of  tlie 
property  fi'om  the  tirm  assets  is  inetlectual  as  against  a  prior  attaching  creditor. 
Lindley  v.  Davis,  6  Mont.  453,  13  Pac.  118. 

Since  a  partnership  cannot  hold  the  legal  title  to  lajid,  a  deed  to  a  firm  by  name 
does  not  convey  the  legal  title  to  the  tirm.  But  a  firm  may  by  its  name  make  a  valid 
contract ;  and  a  deed  to  a  firm  by  name  operates  as  a  valid  contract  to  convey,  and 
gives  the  firm  an  equitable  title.  Blanchard  v.  Floyd,  93  Ala.  53,  9  So.  418; 
Percifull  v.  Piatt,  36  Ark.  456  ;  Tidd  v.  Rines,  26  Minn.  201,  2  N.  W.  497  ;  New 
Vienna  Bank  v.  John.son,  47  Oh.  St.  306,  24  N.  E.  503  ;  Kelley  v.  Bourne,  15  Ore. 
476,  16  Pac.  40  ;  Sherry  v.  Gilmore,  58  Wis.  324,  17  N.  W.  252. 

However  the  deed  is  made,  it  should  (in  the  absence  of  agreement  to  take  title  in 
the  name  of  one  jiartner)  mention  the  firm,  in  order  that  there  may  be  notice  of  the 
fact  that  it  is  firm  land  ;  and  either  partner  may  insist  on  this  being  done.  Davis  v. 
Davis,  60  Miss.  615;  Traphageu  v.  Burt,  67  N.  Y.  30;  Kruschke  v.  Stefan,  (Wis.) 
53  N.  W.  679  (semhle). 

When  a  deeil  of  land  runs  to  the  firm  by  name,  it  is  held  in  some  jurisdictions  that 
all  the  partners,  whether  named  or  not,  become  at  law  tenants  in  common,  in  trust  for 
the  firm.  Slaughter  v.  Doe,  67  Ala.  494  ;  Brunson  v.  Morgan,  76  Ala.  593  ;  Southern 
Cotton  Oil  Co.  V.  Henshaw,  89  Ala.  448,  7  So.  760  ;  Powers  v.  Robinson,  90  Ala. 
225,  8  So.  10  ;  Printup  v.  Turner,  65  Ga.  71  ;  Allen  v.  Whetstone,  35  La.  Ann.  846; 
Smith  V.  Sinnott,  44  La.  Ann.  51,  10  So.  413.  In  such  a  case  where  one  of  the  part- 
ners dies  before  the  convey;ince,  the  survivor  and  the  gi-antor  are  tenants  in  common 
of  the  legal  title;  and  the  heir  of  the  deceased  partner  may  go  into  e(|uity  and  get 
a  conveyance  from  the  giantor.     Blanchard  v.  Floyd,  93  Ala.  53,  9  So.  418. 

In  other  jurisdictions  it  is  held  that  if  the  name  of  any  of  the  partners  is  contained 
in  the  firm  name,  they  take  tiie  legal  title.  Percifull  v.  Piatt,  36  Ark.  456  ;  Gille  v. 
Hunt,  35  Minn.  357,  29  N.  W.  2  (but  .see  Tidd  v.  Pines,  26  Minn.  201,  2  N.  W.  497). 
But  if  the  firm  name  contains  the  name  of  none  of  the  partners,  the  deed  is  inojier- 
ative  at  law,  and  the  grantor  named  retains  the  legal  title  in  trust  for  tlu^  firm. 
Percifull  v.  Piatt,  36  Ark.  456  ;  New  Vienna  Bank  v.  John.son,  47  Oh.  St.  306,  24 
N.  E.  503  ;  Kelley  v.  Bourne,  15  Ore.  476,  16  Pac.  40  (semhle). 

Where  land  is  conveyed  to  the  partners  individually,  but  is  bought  for  the  firm,  it 
is  firm  land.  Spalding  v.  Wilson,  80  Ky.  589  ;  May  i\  New  Orleans  &  ('.  1!.  R.,  44 
La,  Ann.  444,  10  So.  769  ;  Ross  v.  Henderson,  77   N.  C.   170  ;  Norwalk   Nat.    Hank 


352  THE   LAW   OF   PAUTNEUSHIP.  [CH.    XI. 

ol'  the  partners,  in  trust  for  the  whole  partnership,  and  this  is  not 
uncoiuniun;  (//)  or  to  a  strang-er,  under  a  similar  trust,  and  this 
is  sometimes  although  not  often  done.  (0  Nor  is  it  necessary 
that  the  trust  should  be  e.xpressed  ;  for,  however  proper  and 
oxiK'dient  this  is,  yet,  if  the  trust  be  wholly  omitted  and  have  no 
existence  on  record,  the  law  will  sometimes,  (j)  and  equity  always, 

(/()  Coster  r.  Chukc,  3  Edw.  Cli.  428 ;  execution  of  .a  private  creditor.       This  it 

McOiiire  i".  IJiiuisey,  9  Ark.  418.  does    in    jiursuance   of  a   rule   sometimes 

(;■)  Per  Gilchrist,   C.   J.,  in  Jarvis  v.  asserted  in   equity,   that  upon  such  levy 

Brooks,    27    N.    H.    37,    67  ;    Moreau   v.  only  the  separate  interest  of  the  debtor  can 

Satlarans,  3  Sneed,  600  ;  per  Story,  J.,  in  be  sold  ;  and  it  gives  effect  to  this  rule  by 

Ho.\ie  V.  Can;  1  Sumner,  173,   182.  rendering  tiie  slieriff  liable   in    trover  or 

(;■)  The  interference  of  a  common-law  tresi)ass  if  he  sell  more  than  this  ;  or  by 
court  in  behalf  of  the  cestui  que  trust  bene-  su-s^iending  judgment  to  await  the  result  of 
ficially  interested  in  the  partnership  real  a  i)en(ling  suit  in  equity,  as  in  Peck  v. 
estate,  is  ordinarily  only  indirect  and  to  a  Fisher,  7  Cush.  386  ;  or  in  some  such  in- 
limited  extent ;  as  in  the  case  of  a  levy  on  direct  mode.     For  a  stay  of  sale,  resort 

V.  Sawyer,  38  Oh.  St.  339  ;  Page  v.  Thomas,  43  Oh.  St.  38,  1  N.  E.  79.  But  see 
contra,  Holt's  Appeal,  98  Pa.  257. 

Where  the  title  to  land  is  in  the  name  of  one  partner,  but  the  land  really  belongs 
to  the  firm,  it  is  treated  as  the  real  estate  of  the  firm  ;  it  is  commonly  said  that  there 
is  a  resulting  trust  for  the  firm,  liiddle  v.  "Whitehill,  135  U.  S.  621  ;  Rice  v. 
Pennypacker,  5  Houst.  279  ;  Paige  v.  Paige,  71  la.  318,  32  N.  W.  360  ;  Pepper  v. 
Thomas,  85  Ky.  539,  4  S.  W.  297  (semble)  ;  Collins  v.  Decker,  70  Me.  23  ;  Harris 
V.  Harris,  153  Mass.  439,  26  N.  E.  1117  ;  Way  v.  Stebbins,  47  Mich.  296,  11  N.  W. 
UK) ;  Davis  v.  Davis,  60  Miss.  615  ;  Bowen  v.  Billings,  13  Neb.  439,  14  N.  W.  152  ; 
Smith  V.  Jones,  18  Neb.  481,  25  N.  W.  624  ;  Messer  v.  Messer,  59  N.  H.  375  ; 
McCully  V.  JlcCully,  78  Va.  159  ;  Diggs  v.  Brown,  78  Ya.  292;  Case  v.  Seger,  4 
Wash.  St.  492,  30  Pac.  646.  And  so  where  a  partner  contributes  land  to  a  partner- 
ship, but  makes  no  conveyance,  he  holds  the  title  in  trust  for  the  firm.  Wiegand  v. 
Copeland,  14  F.  R.  118  ;  Batty  v.  Adams  Co.,  16  Neb.  44,  20  N.  W.  15.  Where  the 
legal  title  stands  in  the  name  of  the  partners,  and  the  firm  sells  the  land  and  receives 
the  consideration,  but  one  partner  does  not  join  in  the  deed,  he  is  a  trustee  for  the 
purchaser,  and  may  be  compelled  to  convey.  Brunson  v.  Morgan,  84  Ala.  598, 
4  So.  589. 

The  mere  fact  that  Land  is  bought  with  money  of  the  firm  does  not  necessarily 
make  it  firm  property.  It  nuist  also  be  bought  for  firm  purposes.  If  bought  with 
firm  money,  but  for  individual  purposes,  it  is  the  property  of  the  partners  individually. 
Ames  V.  Ames,  37  F.  R.  30  {semble)  ;  Rice  v.  Pennypacker,  5  Houst.  279  ;  Alkire  v. 
Kahle,  123  111.  496,  17  N.  E.  693;  Chandler  v.  Jessup,  (Ind.)  31  N.  E.  1109; 
Providence  v.  Bullock,  14  R.  I.  353.  On  the  other  hand,  the  mere  fact  that  land  is 
used  by  the  firm  does  not  make  it  j>artnership  property.  It  may  remain  the  property 
of  one  partner  (or  conceivably  of  all  the  partners)  though  the  use  of  it  is  allowed  the 
firm.  Hatchett  v.  Blanton,  72  Ala.  423  :  Goepper  v.  Kinsinger,  39  Oh.  St.  429. 
Whether  the  laud  becomes  partnership  land  is  a  question  of  intention,  to  be  deter- 
mined by  the  circumstances,  and  the  concnnen(!e  of  payment  and  use  by  the  firm 
is  usually  conclusive.  Ames  v.  Ames,  37  F.  R.  30  ;  Rice  v.  Pennypacker,  5  Houst. 
279  ;  Goepper  v.  Kinsinger,  39  Oh.  St.  429.  When  two  tenants  in  common  own 
land,  and  cany  on  a  partnership  business  which  ie  ancillary  to  the  land,  —  quarrying 
stone,  for  instance,  or  farming, — the  land  still  remains  the  land  of  the  individual 
partners.  Steward  v.  Blakeway,  L.  R.  4  Ch.  603;  Ratcliffe  v.  Mason,  (Ky.)  17 
S.  W.  438  ;    Berry  v.   Folkes,  60   Miss.  576. 


§  266.]  OF    THE    REAL    ESTATE    OF    A    PARTNERSHIP.  353 

supply  this  want,  and  treat  the  ownership  as  a  distinct  trust,  if 
only  the  trust  exist  and  is  capable  of  proof,  and  the  land  be  in 
fact  and  substance  partnership  property.  We  consider  it  an 
established  rule  in  equity,  that  any  party  holding  the  legal  title 
to  land,  however  it  may  have  come  to  him,  will  be  held  as  trustee 
for  the  partnership,  if  it  be  certain  that  the  land  was  in  fact  a 
part  of  their  joint  property  as  partners,  (k)  But  although  it  be 
held  in  the  joint  name  of  two  or  more  persons,  if  there  be  no 
proof  that  it  was  purchased  with  partnership  funds  for  partner- 
ship {)urposcs,  it  will  be  considered  as  held  by  them  as  joint- 
tenants,  or  tenants  in  common  ;  and  if  they  are  copartners  in 
the  ownership  of  the  land,  the  partnership  as  to  that  will  be  t-er- 
minated  by  a  sale  of  the  hintl.  excepting  so  far  as  the  proceeds 
are  needed  for  the  debts  of  the  partnership,  (kk) 

§  266.  Elements  necessary  to  make  Land  Partnership  Property. 
—  We  consider  that  the  thrt'C  elements  we  have  above  stated 
must  unite,  in  order  to  make  the  real  estate  necessarily  partner- 
ship property.  (Z)  For  if  it  be  not  purchased  for  partnership 
purposes,  and  even  if  it  be  paid  for  by  partnership  funds,  and 
is  in  fact  appropriated  to  the  purposes  of  the  partnership,  it  is 
very  possible  that  one  partner  is  the  owner  of  it,  and  is  to  be 
charged  with  its  value  on  the  books,  and  credited  with  fair  com- 
pensation for  its  use.  Such  a  fact  may  be  proved  ;  but  it  will  not 
be  presumed,  (w)  So,  if  not  paid  for  l)y  partnership  funds,  then 
it  is  probably  his  property  who  does  pay  for  it,  whatever  use  he 
permits  to  be  made  of  it.  (w)  And  if  not  appropriated  to  the 
purposes  of  the  partnership,  however  purchased  and  paid  for,  it 

must  be  had  to  chancery  to  obtain  an  in-  intention.       Psr  Story,    J.,   in    Hoxie    v. 

junction.     And  in  most  other  cases,  pro-  Carr,  1  Sumner,  183  ;  also,  see  Fall  River 

tection  for  this  trust  must  be  sought  in  Whaling  Co.   v.   Borden,    10    Cush.    462. 

equity.  Rut  this  intention  may,  so  far  as  all  claim- 

(k)  Such  a  trust  is  necessarily  implied  ants,  except  bona  fide  purchasers  without 

in  favor  of  the  partnership  where  the  prop-  notice,  are  concerned,  be  held  sufficiently 

erty  has  been  made  partnership  property  established,  if  the  purchase  is  made  with 

under    the    limitations    above  ;    that    is,  partnership  funds,  even  without  intended 

bought  with  partnership  funds  for  part-  or  actual  use  for  partnership  purposes,  un- 

nership  purposes,  and  employed  for  such  less  an  express  agreement  appears  vesting 

purposes.     See  Dyer  v.  Clark,  5  ilet.  562  ;  the  beneficial  as  well  as  the  legal  interest 

Pugh   V.   Currie,    5   Ala.    446  ;  Morris   v.  in    the   gi'antee   or  grantees  in  the  deed. 

Barrett,   3  Younge  &  J.    384;    Owens. v.  Smith   v.   Smith,   5   Yes.   189;    Hunt    v. 

Collins,  23  Ala.  837  ;  [Hatchett  v.   Blan-  Benson,  2  Humph.   459. 
ton,  72  Ala.  423.]     The  doctrine  rests  on  (?/i)  Smith    v.     Smith,    5    Yes.    189; 

the  broad  foundation  of  a  resulting  trust.  Hunt  v.   Benson,   2  Humph.   459. 

(kk)  Thompson    v.   Bowman,   6   Wall.  [n)  Marvin  v.  Trumbull,  Wright,  386  ; 

316.  Owens  v.  Collins,  23  Ala.  837  ;  Wheatley 

{/)  Whether  real  property  shall  become  -y.  Calhoun,  12  Leigh,  264. 
partnership  stock  or  not  is  a  question  of 

23 


354 


THE   LAW   OF   PARTNERSHIP. 


[CH.  XI. 


is  ])0ssil)le  that  the  firm,  perhaps  chang-hig  their  intention,  from 
the  unfitness  of  the  estate  for  their  use  or  for  any  other  reason, 
had  agreed  that  it  should  be  his  alone  who  uses  it,  and  that  he 
should  jiay  the  firm  for  it  in  some  way.  (o)  Indeed,  it  might  be 
said,  that  even  if  real  estate  be  purchased  for,  used  for,  and  paid 
for  by  the  firm,  it  may  still  be  shown  not  to  be  partnership  pro})- 
erty.  This  is  not  impossible  ;  but  the  strongest  proof  would  be 
required  of  a  thing  in  its  nature  so  improbable. 

§  267.  Question  one  of  Intention.  —  This  is  one  of  those  ques- 
tions which  must  be  determined  altogether  from  the  intention  of 
the  parties.  It  is  impossible  for  a  partnership,  as  such,  to  hold 
the  legal  title  of  real  estate.  Only  a  person  can  do  this ;  and  a 
corporation,  only  because  it  is  a  person  in  law  ;  but  this  a  j»art- 
nership  is  not.  On  the  other  hand,  a  partnership  may  own,  in 
equity,  real  estate,  without  the  least  reference  to  the  legal  title, 
it  being  of  no  importance  who  holds  it  or  how  he  came  by  it, 
excepting  so  far  as  these  facts  express  or  reveal  the  intention  of 
the  partnership,  (p  )     If  by  that  intention  the  property  is  treated 


((/)  See  Fall  River  Whaling  Co.  v. 
Borden,  10  Cush.  458.  For  cases  where 
laud  was  bought  for  special  purposes,  see, 
where  the  estate  was  bought  for  the  pur- 
pose of  supplying  earth  under  a  contract, 
Moreau  v.  Salfarans,  3  Sneed,  595  ;  to 
build  a  furnace  on,  Ridgway's  Appeal,  15 
Pa.  177  ;  for  glass-works,  McDermot  v. 
Laurence,  7  S.  &  R.  438  ;  to  build  a  hotel 
on,  Brownlee  v.  Allen,  21  Mo.  123;  for 
stores  for  merchants.  Dyer  v.  Clark,  5 
ilet.  562  ;  for  other  purposes,  Mattock  v. 
jSIattock,  5  Ind.  403  ;  Roberts  v.  McCarty, 
9  Ind.  16  ;  Evans  i'.  Gibson,  29  Mo.  223  ; 
Green  v.  Green,  1  Ohio,  244  ;  Buckley  v. 
Buckley,  11  Barb.  43;  public-houses  and 
lands  l)ought  by  brewers,  Phillips  v.  Phil- 
lips, 1  Myhie  &  K.  649  ;  Morris  v.  Barrett, 
3  Younge  &  J.  384.  If  necessar}',  and  so 
far  as  is  necessary,  real  estate  purchased 
with  partnership  funds  for  partnership 
business  will  be  treated  as  personalty. 
Hiscock  V.  Philips,  49  N.  Y.  97  ;  Pearce 
V.  Covert,  39  Wis.  252  ;  Scruggs  v.  Blair, 
44  Miss.  406  ;  Heartt  v.  Rankin,  41  Iowa, 
35 ;  Shearer  v.  Shearer,  98  Mass.  107 ; 
Drewry  v.  Montgomery,  28  Ark.  256  ; 
Little  V.  Snedecor,  52  Ala.  167  ;  Bank  of 
Louisville  v.  Hale,  8  Bush  (Ky.),  672; 
Manek  v.  Manck,  54  111.  281  ;  King  v. 
Weeks,  70  N.  C.  372  ;  Lime  Rock  Bank 
V.  Phetteplace,  8  R.  1.  56  ;  Nat.  Bank  v. 


Sprague,  20  N.  J.  Eq.  13.  Real  estate 
will  be  treated  as  partnership  jiroperty, 
though  situated  in  a  State  where  by  stat- 
ute provision  it  is  not.  Tillotson  v.  Tillot- 
sou,  34  Conn.  335.  A  mill  belonging  to 
one  partner,  and  credited  to  him  in  the 
partnership  accounts  at  a  certain  value, 
becomes  partnership  property ;  and  any 
rise  in  its  value  becomes  ]>artnership  assets. 
Ashton  V.  Robinson,  L.  R.  20  Eq.  25.  See 
also  Waterer  v.  Waterer,  L.  R.  15  Eq.  402  ; 
Hogle  V.  Lowe,  12  Nev.  286.  If  the  real 
estate  be  not  purchased  for  the  partnership 
business,  though  purchased  with  the  part- 
nership funds,  it  will  be  held  by  the  re- 
spective partners  as  tenants. in  common. 
Russell  V.  Miller,  26  Mich.  1  ;  Price  v. 
Hicks,  12  Fla.  365.  Nor  is  real  estate 
not  purchased  with  partnership  funds, 
though  used  for  partnership  purposes, 
partnership  property,  unless  there  is  evi- 
dence beyond  the  use,  under  an  agreement, 
that  there  is  an  intention  to  make  it  part- 
nership property.  Alexander  v.  Kimbro, 
49  Miss.  529;  Frank  v.  Branch,  16  Conn. 
261.  [Hatchett  v.  Blanton,  72  Ala.  423.] 
ip)  In  Markham  v.  Merritt,  7  How. 
(Miss.)  487,  it  was  said  obiter  by  Sharkey, 
C.  J.,  that  taking  a  deed  as  tenants  in 
common  might  be  held  a  partition  of  the 
joint  fund  ;  but  see,  per  Story,  J.,  in 
Hoxie  V.  Carr,  1  Sumner,   188,  that  that 


§  269.]      OF  THE  REAL  ESTATE  OF  A  PARTNERSHIP.         355 

by  them  and  considered  by  them  as  partnership  property,  whether 
tlie  intention  be  expressly  declared  and  agreed  by  the  partners,  or 
only  inferred  from  circumstances  which  do  not  admit  of  any 
other  equally  reasonable  and  satisfactory  explanation,  then  it  will 
be  treated  as  |)artncrship  property. 

§  268.  Partnership  Real  Estate  at  Law.  —  In  some  of  OUT 
States,  courts  of  law  sit  also  as  courts  of  equity ;  in  some  they 
are  authorized  to  some  extent  to  apply  the  rules  of  equity,  while 
sitting  as  courts  of  law ;  and  in  some  they  have,  from  a  kind  of 
necessity,  taken  to  themselves  this  power,  and  applied  equity 
principles  to  such  questions  as  those  we  have  to  consider.  At  the 
same  time,  the  distinction  is  obvious  and  certain  between  the 
principles  of  law  and  their  operation,  and  the  principles  of  equity 
and  their  operation.  And  this  distinction  in  some  form  or  other 
is  usually  preserved,  even  by  courts  that  administer  both  princi- 
ples.    We  shall  speak  of  them  as  entirely  distinct. 

In  England,  the  legal  title  to  real  estate  in  respect  to  transfer 
and  conveyance  is  entirely  distinct  from  that  of  personal  estate. 
In  respect  to  inheritance,  it  is  also  different  both  in  form  and  in 
substance  ;  in  respect  to  devises,  it  is  different,  but  less  so,  prac- 
tically, than  in  reference  to  the  other  two.  In  this  country,  the 
law  of  real  estate  is  even  more  distinct  from  that  of  personal 
than  in  England,  in  respect  to  conveyance,  owing  to  our  excellent 
and  universal  system  of  record  :  but  in  regard  to  inheritance,  the 
difference  is  formal  only ;  the  same  persons,  in  nearly  all  in- 
stances, taking  realty  who  would  take  personalty,  though  by  a 
different  title  and  process,  {q) 

§  269.  Legal  Title  governed  by  Record.  —  We  sliould  infer, 
therefore,  that  here  as  well  as  there  the  law  would  pay  the  utmost 
regard  to  title  by  deed  and  record.  And  this  is  always  so.  Thus, 
no  partner  or  partners  can  convey  any  interest  or  title  in  or  to 
real  estate,  not  held  of  record  in  their  names,  although  it  is  part- 

circumstauce  was  as  evidence  of  intention,  personal   property  ;   and   so  whether  the 

per  se,   very  slight,    and   never  decisive,  complainant   acquired  the  property  abso- 

See    Wilson    v.    Hunter,    14    Wis.    683  ;  lutely  as  personal,  or  only  a  life-interest 

where  one  of  the  partners  who  had  not  the  therein,  as  tenant  by  curtesy  ;  and  it  was 

legal  title  mortgaged  laud,  and  it  was  held  held,  that  the  conversion  of  real  property 

good  against  subsequent  mortgagees,  with  into  personal  was  equitable  only  ;  but  the 

notice.     And   see  Howell   v.    Howell,  15  precise  question  was  not  definitely  decided. 

Wis.   55.  Per  Sharkey,  C.  J.,  in  Markham  I'.  Merritt, 

(q)  In  Davis  f.  Christian,  15  Gratt.  11,  7   How.   (Miss.)   437.      See   Bradbury  v. 

a  bill  was  filed  for  a  share  accrued  to  the  Barnes,  19  Cal.  120,  as  to  the  right  of  one 

complainant  as  husband  of  the  daughter  of  partner  to  buy  another's   interest  in  the 

a  partner  deceased,  and  one  question  was,  real  estate  of  the  partnership, 
whether  she   took  such   share  as  real   or 


356  THE    LAW    OF    PARTNERSHIP.  [CH.    XI, 

ncrship  property  beyond  all  question,  (r)  And  in  all  actions  at 
law,  no  person  can  appear  and  rest  upon  his  title,  as  plaintiff  or 
defendant,  if  the  title  by  deed  on  which  he  rests  is  in  some  one 
else,  (s)  And  this  is  true  of  title  by  inheritance  also.  We 
apprehend  that  some  of  our  courts  might  find  a  way  to  dispose 
of  this  title  at  law,  as  it  would  be  done  in  equity  ;  but  it  would 
be  difficult  to  do  this,  and  wherever  equity  powers  could  be  exer- 
cised, it  would  be  unnecessary.  We  should  say,  therefore,  that 
at  law  the  real  estate  of  a  partnership  would  pass  to  the  legal 
heir  by  inheritance  ;  that  is,  to  the  legal  heir  or  heirs  of  him  or 
them  in  whom  vyas  the  legal  title :  (0  and  that  it  would  also  pass 
by  devise  of  the  legal  holder,  although  here  courts  of  law  might 
perhaps  take  a  wider  liberty  than  in  the  case  of  inheritance. 

Hence,  too,  at  law,  the  general  rule,  as  to  the  rights  and  lia- 
bilities of  dormant  partners,  is  said  not  to  apply  to  })artnerships 
for  the  purchase  and  sale  of  land.  Thus,  if  two  are  partners  for 
such  a  purpose,  one  of  whom  is  silent  and  miknown,  and  the 
other,  in  whose  name  the  lands  are  taken  and  transferred,  alone 
becomes  indebted  for  the  price,  it  is  said  that  the  secret  ])artner 
cannot  be  sued  for  the  price,  on  proof  of  his  partnership,  and 
that  the  purchase  was  made  and  the  debt  incurred  for  the  part- 
nership, (y) 

But  we  have  some  doubt  whether  these  decisions  do  not  rest 
upon  a  recognition  of  a  difference  between  land  and  personalty 
which  would  not  now  be  made.  The  reasons  which  compel  courts 
of  law  to  regard  the  legal  title  to  land  by  deed  do  not  apply, 
or  certainly  not  with  the  same  force,  to  courts  of  equity.  Nor 
.do  we  know  any  among  the  reasons  which  are  held  sufficient  in 
such  a  case  to  liind  a  secret  partner  when  discovered,  in  an 
ordinary  case  of  partnership,  which  do  not  apply  quite  as  well  to  a 
case  where  land  was  a  part  of  the  partnership  property,  (w) 


(r)  Jackson   v.  Stanford,    19   Ga.    14,  Met.  562  ;    Burn.side  v.  Merrick,   4  Met. 

where  one  partner,  holding  under  a  con-  537  ;  Dilworth  v.  Mayfield,  36  Miss.   40  ; 

veyance  to  the  j)artners  by  their  individual  Andrews  i'.  Brown,  21  Ala.  437  ;  Davis  v. 

names,    attempted   to   convey   the   whole  Christian,  15  Gratt.  11. 
property,   and   the   conveyance   was   held  (v)  Pitts  v,  Waugh,  4  Mass.  424  ;  cited 

valid,  only  as  to  his  moiety.     See  Whit-  and  followed  in  Gray  v.   Palmer,    9  Cal. 

man  v.  Boston  &  Maine  R.   R.,  3  Allen,  616. 
133.  {w)  Though  the  case  of  Pitts  v.  Waugh 

(s)  Story,  J.,  in  Hoxie  i;.  Carr,  1  Sum-  is    usually    considered    sound,    as    being 

ner,  173,  177,  178  ;  Benfield  v.  Solomons,  merely  at  law,  —  see  Fall  River  Whaling 

9  Ves.  76  ;  Harris  v.  Pollard,  3  P.  Wnis.  Co.  v.  Borden,  10  Cush.  485,  —  yet,  so  far 

348.  as  it  was  rested  by  the  court  on  the  ground 

(t)  Pngh  i'.  Currie,  5  Ala.  446  ;  Lang  of  an  impossibility  to  have  a  partnership 

V.  Waring,  25  Ala.  625  ;  Dyer  v.  Clark,  5  dealing  in  land,  —  such  partnerships  being 


§  270.]  OF    THE    REAL    ESTATE    OF    A    PARTXERSHIP.  357 

From  the  regard  which  is  necessarily  paid  to  the  legal  title,  it 
follows,  as  we  have  said,  that  no  partner  can  convey  any  real 
estate,  or  any  interest  in  it,  but  he  in  whose  name  it  stands. 
Even  equity  cannot  dispense  with  this  rule.  By  the  American  law 
and  practice  all  title  to  land  must  be  traced  along  an  unbroken 
chain  of  record.  At  every  step,  it  must  be  legal  title ;  passing, 
by  legal  conveyance,  from  him  who  has  it  to  one  capable  of 
taking  it. 

§  270.    Partnership   Real   Estate  regarded  as  Personalty  in  Equity. 

—  On  this  point,  tlie  conflict  of  authorities  I'enders  it  dithcult  to 
lay  down  a  positive  and  certain  rule.  We  think,  however,  that 
there  is  a  difference  between  the  practice  of  the  English  equity 
courts  and  our  own ;  and  this  difference  can  be  defined  and 
explained,  and  the  decided  tendency,  if  not  the  established 
rule,  of  the  courts  of  each  country,  be  ascertained. 

The  older  authorities  in  England  are  opposed  to  any  recog- 
nition of  real  property  as  a  ))art  of  the  partnership  stock,  and 
the  later  have  yielded  to  the  pressing  necessity  for  this  acknowl- 
edgment, slowly  and  imperfectly.  It  was  not  until  quite  recently 
that  it  has  been  full  and  complete ;  and  now  it  is  carried  further 
in  England  than  it  is  here.  We  suppose  the  rule  of  those  courts 
to  be  well  expressed  thus  :  "  All  property,  whatever  be  its  nature, 
purchased  with  partnership  capital  for  the  purposes  of  partner- 
ship trade,  is  and  continues  to  be  partnership  capital,  and  has, 
to  every  intent,  the  quality  of  personal  estate."  (x)  These  last 
two  clauses  are,  it  will  be  noticed,  quite  distinct.  It  is  one  thing 
to  say  that  such  real  estate  shall  be  considered,  in  every  respect, 
partnership  property,  and  another  thing  to  add  that  it  has  to 
every  intent  the  quality  of  personal  estate.     It  is  the  first  thing 

now  universally  admitted  at  common  law  property."     But  the  cases  of  Randall  v. 

—  it  must  be  considered  overruled  by  the  Randall,  7  Sim.  271,  and  Cookson  v.  Cook- 
current  of  later  authority  ;  and  the  rule,  son,  8  Sim.  529,  from  which  these  con- 
that  a  dormant  or  secret  partner  of  a  land  elusions  were  drawn,  would  seem  to  be 
company  cannot  be  charged,  would  seem  overruled  by  Essex  v.  Essex,  20  Beav.  442, 
now  to  rest  upon  feeble  reasons.  and  Darby  v.  Darby,  3  Drewry,  495.     See 

{x)  Mr.  Bisset,  in  his  treatise  on  the  Bell  v.  Phyn,  7  Ves.  453,  and  Eiple}'  v. 
Law  of  Partnership,  after  a  review  of  all  Waterworth,  7  Ves.  425.  In  the  latter 
the  cases  up  to  his  time  (1847),  concludes,  case,  the  whole  law  on  this  point  was 
among  other  things,  that  "  real  estate,  pur-  elaborately  considered,  and  the  Vice-Chan- 
chased  with  partnership  property,  but  not  cellor  held,  after  reviewing  all  the  authori- 
for  partnership  purposes,  is  not  converted  ties,  that  all  real  estate  which  was  added 
into  personalty  ;  and  that,  though  partners  to  the  partnership  stock,  in  whatever  way 
purchase  with  partnership  funds  the  equity  acquired,  becomes  converted  absolutely 
of  redemption  of  mortgages  devised  to  into  personal  property.  See  Bonner  v. 
them,  the  equity  of  redemption  follows  the  Campbell,  48  Pa.  286. 
mortgage,  and  does  not  become  partnership 


358  THE    LAW    OF    PARTNERSHIP.  [CH.    XI. 

only,   we   suppose,    which   the   American   courts   say ;    and    the 
English  courts  say  that,  and  then  add  the  latter. 

§  271.  English  Rule.  —  There  are  two  reasons  for  this  English 
rule.  One  is,  that  the  reluctance  to  admit  real  estate  as  by  any 
j)ossibility  part  of  the  i)artnership  capital  arose  from  the  feeling 
that  only  jjersonal  property  could  be  thus  held  ;  and  thei'efore, 
wiien  it  became  obvious  that  real  estate  must  be  acknowledged 
as  part  of  the  partnership  property,  it  seemed  as  if  this  was  in 
fact  calling  it  personal  property.  The  other  reason  is  more  sub- 
stantial, and  probably  more  opei'ative.  The  law  of  inheritance 
is  such,  in  England,  that  where  a  partner  intended  that  his  real 
estate  should  be  partnership  stock,  and  so  treated  in  all  respects, 
injustice  would  be  done  by  treating  it  so  until  the  partnership 
account  was  settled  and  tei'minated,  and  then  restoring  to  it  its 
character  of  real  estate.  For  then  the  heir  would  take  it,  and 
all  the  next  of  kin  would  lose  it:  one  child  would  take  all,  and 
the  rest  none.  If  the  father  had  sold  the  land,  and  put  the 
money  into  trade,  all  would  have  shared  it.  And  if  he  had  put 
his  land  into  trade,  and  it  must  be  considered  that  he  in  this  way 
made  it  personal  estate  so  far  as  his  partners  and  the  creditors 
of  the  firm  were  concerned,  it  would  seem  reasonable  that  he 
should  be  considered  as  having  intended  to  impart  to  the  real 
estate  the  character  of  personalty  in  all  respects,  and  just  to 
carry  this  intention  into  effect,  {y)  Hence,  it  seems  to  be  the 
English  rule,  and  is  so  stated  in  American  cases  which  refer  to 
it,  that  the  real  estate  of  a  partnership  does  not  go  to  the  heir 
of  a  deceased  partner  or  partners  beneficially  interested  in  it, 
but  to  his  personal  representatives.  (2)  The  following  distinc- 
tion might  possibly  be  taken  :  Supposing  three  partners,  one  of 
whom  has  the  legal  title  to  real  estate  which  is  partnership 
property,  and  he  dies.  His  heir  would  be  held  as  trustee  for 
two-thirds  of  it  (one-third  to  each  partner),  but  the  other  third 
he  would  hold  as  his  own.  Whereas,  in  the  same  case,  if  one  of 
the  other  partners  who  was  thus  beneficially,  but  not  by  legal 
title,  interested  in  one-third,  had  died,  the  partner  holding  the 

(y)  See  per  Sharkey,  C-  J.,  in  Mark-  before  the  more  recent  cases  of  Essex  v. 

ham  i>.   Merritt,   7  How.   (Miss.)  437.  Esse.K,  and  Darby  w.  Darby,  overruling  the 

(2)  This  is  the  conclusion  of  Walworth,  cases  which  gave  rise  to  the  doubt.     See 

Ch.,  in  Buchan   y.  Sumner,  2  Barb.  Ch.  ante,  note  (x)  ;  Callumb  v.  Read,  24  N.  Y. 

199,  200  ;  of  Story,  J.,  in  Hoxie  v.  Carr,  505.     So  see  the  same  conclusion  in  Duh- 

1  Sumn.  173,  184  ;  and  Shaw,  C.  J.,  in  ring  v.  Duhring,  20  Mo.   174.     Compare, 

Dyer   v.    Clark,    5    Met.    562,    578  ;    and  with    these    English    cases,    the    case    of 

though  this  was  questioned  in  Pnickley  i-.  Steward  v.  Blakeway,  L.  Fi.   6  Eq.  479. 
Buckley,   11   Barb.   73-76,  yet  that  was 


§  272.]      OF  THE  REAL  ESTATE  OF  A  PARTNERSHIP.  359 

title,  or  his  heir,  would  be  held  as  trustee,  not  for  the  heir  of 
that  deceased  partner,  who  had  only  an  etiuitable  title,  but  for 
his  personal  representatives.  We  apprehend,  however,  that  such 
a  distinction  would  be  regarded  as  theoretical  only,  if  admitted 
at  all ;  and  that  the  English  rule,  for  the  reasons  we  have  stated, 
would  give  to  such  real  estate  the  character  and  qualities  of  per- 
sonal ))roperty,  as  to  all  persons  and  under  all  circumstances. 

§  272.  American  Rule.  — In  this  country,  the  rule  is  otherwise. 
Neither  of  the  reasons  above  stated  apply  to  us.  There  is  not, 
and  we  know  no  reason  why  there  should  be,  any  reluctance  to 
recognize  as  partnership  property  any  real  estate  which  the 
owners  wish  should  be  so  considered.  And  when  it  has  ful- 
filled all  its  functions  as  personal  property,  in  respect  of  the 
partnership,  the  partners,  and  the  creditors,  and  is  no  longer 
wanted  for  these,  it  may  now  become,  in  their  hands  who  have 
the  legal  title,  real  estate,  and  subject  to  all  incidents  as  such  ; 
because  the  same  persons  with  us  take  the  personalty  and  inhej-it 
the  realty,  and  it  will  be  much  sim[)ler  and  easier  for  them  to 
take  at  once  as  realty  that  which  is  realty.  The  following,  then, 
is  the  American  rule  :  Real  estate,  purchased  and  held  as  part- 
nership property,  is  so  treated  in  equity,  and  subjected  to  all 
the  incidents  of  partnership  property.  If  there  be  death,  the  sur- 
viving partner,  whether  he  hold  the  whole  title,  or  hold  it  in 
part,  or  hold  none  of  it,  if  he  be  a  creditor  of  the  partnership, 
has  the  same  rights  against  the  real  estate,  and  only  the  same, 
which  any  other  creditor  has.  (a)  But  this  real  estate  goes  to 
pay  the  debts  of  the  partnership,  and  only  after  they  are  paid 
does  it,  or  what  is  left  of  it,  become  the  property  of  the  partners, 
or  their  representatives,  free  from  all  claims  ;  and  then  it  is 
divided  between  them  just  as  so  much  money  capital  would  be. 
But  it  then  becomes  at  once  real  estate ;  or,  rather,  all  the  inci- 
dents and  qualities  of  real  estate  revive.^     This  rule  goes  upon 

(a)  Delaney   v.    Hutchesou,    2    Rand,  property  as  to  creditors  ;  and,  in  distribu- 

183  ;  Gray  v.  Palmer,  9  Cal.  616;  Roberts  tioii,  private  and  partnership  creditors  are 

V.  McCarty,  9  Ind.  16.     Abbott's  Appeal,  paid  pari  passu.     Appeal  of  Second  Nat. 

50  Pa.  234.     In  Pennsylvania,  if  the  part-  Bank,    83    Pa.    203.       See    also   Ebbert's 

ners  take  a  deed  of  real  estate  as  tenants  Appeal,   70  Pa.  79. 
iu  common,  this  fixes  the  character  of  the 

1  It  seems  to  be  well  established  in  this  country,  in  accordance  with  the  doctrine 
stated  in  the  text,  that  real  estate  owned  by  a  partnership  is  converted  into  personalty 
only  for  the  purpose  of  settling  the  partnership  affairs,  by  paying  the  debts  and  adjust- 
ing the  accounts  of  the  partners.  Riddle  i'.  Whitehill,  135  U.  S.  621  ;  Iii  re  Codding, 
9  F.  K.  849  ;  Abernathy  v.  iloses,  73  Ala.  381  ;  Strong  v.  Lord,  107  111.  25  ;  Harris 
17.  Harris,  153  Mass.  439,  26  X.  E.  1117  ;  Foster's  Appeal,  74  Pa.  391.  An  agreement 
between  the  partners  may,  however,  show  that  the  land  has  been  equitably  converted 


3G0  THE    LAW    OF    PARTNERSHIP.  [CH.    XI 

the  ground  of  a  trust  imposed  upon  all  who  hold  the  legal  title, 

intopi'i-soiialty.  Thus  where  it  was  agreed  that  upon  the  death  of  a  partner  a  valua- 
tion of  his  share  shouhl  be  made,  and  the  survivor  upon  paying  the  amount  shouKl  take 
all  the  assets,  it  was  held  that  the  parc'hase-money  tiius  jiaid  by  the  survivor  should  b& 
distributed  as  personal  estate.  Maddouk  v.  Astbury,  32  N.  J.  Eq.  181.  So  where  it 
was  provided  by  the  articles  that  the  firm  shouhi  not  be  dissolved  by  death,  but  should 
continue,  the  interest  of  a  deceased  paitner  is  personalty  for  j>urposes  of  distribution. 
Leaf's  Appeal,  105  Pa.  505.  A  peculiar  doctrine  prevails  in  Kentucky.  The  general 
rule  is  the  same  that  jjrevails  elsewhere  ;  the  land  is  converted  into  pei'sonalcy  only  for 
the  purposes  of  the  i)artnership.  Lowe  v.  Lowe,  13  Bush,  688.  But  an  agreement  to 
convert  the  land  into  personalty  i.s  implied  when  land  is  bought  for  the  incidental  pur- 
poses of  the  partnership.  Cornwall  v.  Cornwall,  6  Bush,  3Gy.  The  question  whether 
the  purchase  is  incidental,  and  so  the  land  is  converted,  or  is  for  the  purpose  of  dealing 
with  the  laud  as  real  estate,  is  to  be  determined  according  to  the  intention  of  the  part- 
ners at  the  time  of  the  purchase,  not  according  to  the  use  actually  made  of  the  land. 
Holmes  v.  Self,  79  Ky.  297  ;  Flanagan  v.  Shuck,  82  Ky.  617. 

Where  the  object  of  a  farming  partnership  was  to  buy  land,  carry  on  farming  opera- 
tions till  the  land  was  paid  for,  and  then  own  the  land  in  common,  it  was  said  that 
the  land  was  not  converted  into  personalty  even  for  the  purpose  of  paying  creditors. 
Berry  v.  Folkes,  60  Miss.  576.  A  more  exact  statement  of  the  case  would  probably  be 
that  the  land  was  never  the  property  of  the  partnership.  The  puri)ose  of  the  jiartner- 
ship  was  merely  to  cultivate  the  land,  and  the  use  only  of  the  land  was  contributed. 
See  (Ditc,  §  265,  note  ad  Jin. 

How  far  the  English  doctrine  differs  from  the  .\mericau  is  not  clear.  The  interest 
of  a  deceased  partner  in  real  estate  of  a  partnership  is  recognized  as  personalty  in  so  far 
that  a  probate  dut}',  which  is  payable  only  on  personal  projjert}',  is  due  uj)on  it, 
Attorney-General  v.  Hubbuck,  13  Q.  B.  D.  275  (C.  A.).  And  where  land  was  con- 
veyed to  two  partners,  for  the  partnership,  as  joint  tenants,  it  was  held  that  there  was 
no  survivorship.  Davies  v.  Games,  12  Ch.  D.  813.  But  on  the  other  hand,  a  devise 
to  charity  of  an  interest  in  a  partnership,  a  large  part  of  whose  assets  is  land,  is  within 
the  mortmain  acts  ;  being  a  charge  upon  land,  if  not  strictly  an  interest  in  it.  Ash- 
worth  I'.  Munn,  15  Ch.  D.  363  (C.  A.).  And  it  has  even  been  intimated  that  the  sale 
of  an  interest  in  a  partnership  formed  to  deal  in  lands  is  the  sale  of  an  interest  in  lands, 
and  within  the  Statute  of  Frauds.     Gray  v.  Smith,  43  Ch.  D.  208  (C.  A.). 

The  whole  discussion,  whichever  view  is  adopted,  seems  to  i>roceed  upon  a  mistaken 
theory.  Land  of  a  partnership  is  not  in  truth  converted  into  personalty  either  for  one 
purpose  or  for  all  purposes.  So  far  as  the  partnership  is  concerned,  it  is  })artnership 
laud,  and  is  treated  as  land.  Thus,  it  may  be  taxed  to  the  firm  as  land,  Hubbard  v. 
"Winsor,  15  Mich.  146  ;  and  if  a  judgment  is  obtained  against  the  firm,  it  becomes  a 
judgment  lien  on  the  land.  In  re  Codding,  9  F.  E.  849  ;  Lauller  v.  Cavett,  87  Pa. 
479  ;  Pitts  v.  Spotts,  86  Va.  71,  9  S.  E.  501. 

AVhen  the  affairs  of  the  partnership  are  undergoing  settlement,  the  laud  is  among 
the  assets  of  tlie  partnership,  to  be  disposed  of  first  in  payment  of  the  debts.  If  any  is 
left,  it  is  to  be  devoted,  like  the  personalty,  to  repaying  the  capital  and  advances  of  the 
partners  ;  and  neither  i)artner  can  claim  it  till  these  matters  are  adjusted.  "Wiegand  v. 
Copeland,  14  F.  R.  118;  Mendenhall  v.  Benbow,  84  N.  C.  646;  Betts  v.  Letcher 
(S.  Dak.)  46  X.  W.  193  ;  Lane  v.  Jones,  9  Lea,  627  ;  Diggs  v.  Brown,  78  Va.  292.  If 
any  land  remains  after  this,  it  is  to  be  divided  among  the  partners,  like  the  remaining 
personal t}\  If  the  land  has  been  sold,  but  a  part  of  the  proceeds  remain,  it  is  to  be 
divided  in  the  same  way.     Powers  v.  Robinson,  90  Ala.  225,  8  So.   10. 

As  to  the  individual  partners,  they,  as  we  have  seen,  have  no  interest  in  the  land, 
or  in  any  specific  property.  Their  only  right  is  a  claim  against  the  partnership  for  a 
distributive  share  of  a  final  balance  ;  and  this  claim  is  of  course  personalty.  If  any 
land  remains  after  the  debts  are  paid,  it  is  still  necessary  to  adjust  the  accounts  of  the 


§  272.]  OF   THE   REAL    ESTATE    OF    A    PARTNERSHIP.  361 

in  behalf  of  all  partnership  objects ;  and  that  trust  once  dis- 
charged, the  residue  resumes  its  former  character.  (^>) 

(b)  Dyer  v.  Clark,  5  Met.  562  ;  Bum-  81  Pa.  377,  Pierce  v.  Covert,  39  Wis.  252; 
side  V.  Merrick,  4  Met  537  ;  Howard  v.  [Brewer  v.  Browne,  68  Ala.  210  ;  Esjjy  v. 
Priest,  5  Met.  582;  Peck  v.  Fisher,  7  Coiner,  76  Ala.  501.]  But  in  Pierce  v. 
Cash.  386  ;  Rice  v.  Barnard,  20  Vt.  479 ;  Trigg,  10  Leigh,  406,  it  was  held,  by 
Goodburn  v.  Stevens,  5  Gill,  1  ;  Galbraith  Tucker,  J.,  that  the  purchase  of  real  prop- 
V.  Gedge,  16  B.  Men.  631  ;  Buckley  v.  erty  witii  ])artnershii)  funds  and  for  part- 
Buckley,  11  Barb.  43  ;  Holland  v.  Fuller,  nershij)  i)urpo.ses,  converted  it  absolutely 
13  Ind.  195,  199;  Mattock  v.  Mattock,  into  ])ersonalty.  The  court  say:  "It 
5  Ind.  403;  Buchan  v.  Sumner,  2  Barb,  ought  to  replace  the  fund  witlidrawn  from 
Ch.  165;  Boyers  v.  Elliott,  7  Hunipli.  tlie  personal  estate.  By  jilacing  it  asstock 
204  ;  Tillinghast  v.  Champlin,  4  R.  I.  173  ;  in  the  partnership,  the  deceased  evinced  a 
Lancaster  Bank  v.  Myiey,  12  Pa.  544  ;  design  to  treat  it  as  personalty,  and  it 
Sumner  v.  Hani])son,  8  Ohio,  358  ;  Greene  ought  to  go  accordingly.  The  representa- 
V.  Greene,  1  Ohio,  244  ;  Coster  v.  Clarke,  tives  of  the  deceased  can  claim  it  only  a^ 
3  Edw.  Ch.  428  ;  Lang  v.  Waring,  25  Ala.  stock  ;  and  as  stock  in  trade  it  is,  ex  vi 
625  ;  Jones  v.  Neale,  2  Pat.  &  H.  339  ;  termini,  personal.  And,  accordingly,  the 
Hanir  V.  Howard,  3  Jones  Eq.  440  ;  Collins  widow's  dower  was  denied  to  her  thereout, 
V.  Warren,  29  Mo.  236  ;  Wesson  v.  Wash-  although  the  partnership  was  solvunt." 
burn  Iron  Co.,  13  Allen,  95  ;  Shearer  v.  The  court  were  not  unanimous  in  this 
Shearer,  98  Mass.  107;  Foster  v.  Barnes,  opinion.    No  other  American  decision  ha.s, 

partners  with  the  firm,  and  the  land  i.s  therefore  not  yet  individual  i)roperty.  And 
even  after  these  accounts  have  all  been  settled,  and  land  belonging  to  the  tirni  remains 
in  the  form  of  ])rotits  to  be  divided,  the  partners  would,  strictly  speaking,  have  no  indi- 
vidual property  in  the  land  before  an  actual  division.  But  if  they  already  own  the 
legal  title  to  the  land  in  common,  the  formality  of  a  division  is  unnecessary,  and  the 
partners  would  be  held  to  own  the  land  individually.  A  partner  might  therefore  get 
individual  title  to  partnership  land  in  one  of  two  ways  ;  first,  by  an  actual  setting  out 
and  conveyance  of  a  portion  of  the  land  to  him,  by  way  of  distribution  of  the  profits  or 
otherwise  ;  second,  by  the  fact  that  land  wdiich  is  proper  for  distribution  among  the 
partners  is  already  legally  theirs  in  the  proportion  to  which  on  distribution  they  are 
entitled.  It  is  needless  to  say  that  when  bind  comes  in  this  way  to  a  partner,  it  comes 
as  real  estate  and  not  as  personalty.     See  Ruckman  v.  Decker,  23  N.  J.  Eq.  283. 

The  same  is  true  if  in  consequence  of  the  death  of  a  partner  his  distributive  share  is 
handed  over  to  his  representatives.  If  the  survivor  chooses  to  distribute  the  assets  of 
the  firm  in  the  shape  of  land,  it  goes  to  the  proper  representatives  of  the  deceased  part- 
ner as  real  estate,  with  all  the  incidents  of  real  estate  ;  if,  on  the  other  hand,  no  land 
remains  after  settling  the  affairs  of  the  partnership,  the  balance,  when  paid  over,  is 
received  by  the  representatives  of  the  deceased  as  personalty.  Until  the  balance  is  thus 
jiaid  over,  the  representatives  of  the  deceased  have  no  interest  in  the  specific  property. 
Roulston  V.  Washington,  79  Ala.  529.  See  Little  v.  McPherson,  76  Ala.  552  (personal 
jiroperty).  But  since  the  surviving  partner  when  dealing  with  the  partnership  land  is 
dealing  with  equitable  rights,  and  may  require  the  assistance  of  a  court,  it  would  seem 
proi)er  that  he  should  first  exhaust  the  personal  assets  before  dealing  with  the  land. 
If  that  is  true,  land  of  a  partnership  dissolved  by  death  would  go  to  the  representatives 
of  the  deceased  as  real  estate,  unless  the  personalty  was  insufficient  to  pay  the  debts, 
including  the  claims  of  the  survivor.  It  would  follow  that  the  share  of  the  deceased, 
in  whatever  form  paid  over,  should  be  regarded  as  real  estate  for  the  purpose  of  dis- 
tributing the  estate  of  the  deceased,  up  to  the  value  of  the  deceased  partner's  share  in 
the  partnership  lands  supposing  them  to  be  owned  in  common.  It  seems  that  tiie  duty 
of  the  survivor  is  thus  to  exhaust  the  personal  assets  before  coming  upon  the  realty. 
Walling  V.  Burgess,  122  Ind.  299,  22  N.  E.  419  ;  post,  §  273,  n.  (A).  But  see  contra, 
Godfrey  v.  White,  43  Mich.  171,  5  N.  W.  243. 


362 


THE    LAW    OP    PARTNERSHIP. 


[CH,    XL 


§  273.  Dower  in  Partnership  Real  Estate. — The  English  rule 
would  seem  to  cut  this  off.  (c)  But  in  this  country  it  is  quite  well 
settled  that  while  dower  yields  to  the  claims  of  partnership  cred- 
itors, whether  they  are  of  the  firm  or  strangers,  and  therefore  can- 
not be  granted  unti\  all  the  partnership  debts  are  paid  or  secured, 
yet,  when  this  is  accomplished,  as  the  land  is  treated  in  the  same 
way  as  if  it  had  never  entered  into  partnership  pro[)crty,  dower 
revives,  {d)  But  the  widow  should  be  made  a  party  to  any  bill 
for  an  account  or  for  a  sale  of  the  real  property  to  pay  debts,  (e) 
Otherwise,  the  purchaser  might  be  liable  to  the  widow's  claim  for 
dower.  (/)  ^ 


it  is  believed,  iiiaintaiiied  this  doctrine  ; 
and  the  hiter  cases  in  Virginia,  Davis  v. 
Christian,  15  Gratt.  11,  and  Jones  t;.  Neale, 
2  Pat.  &  H.  339,  treat  the  point  as  doubt- 
ful, a  decision  thereon  being  unnecessary. 
See  ante,  §  268,  note  [q).  On  the  other 
hand,  dicta  occur  going  to  sustain  an  abso- 
lute conversion  in  the  case  of  a  purchase  of 
land,  under  a  stipulation  for  resale,  made 
either  at  the  time,  or  agreed  upon  in  the 
partnershifP  articles.  Ludlow  v.  Cooper,  4 
Ohio  St.  1  ;  Buck  v.  Winn,  11  B.  Mon. 
320  ;  Divine  v.  Mitchuni,  4  B.  Mon.  488  ; 
Galbraith  v.  Gedge,  16  B.  Mon.  631,  635  ; 
Thayer  v.  Lane,  Walk.  Ch.  200  ;  but  in 
none  of  these  cases  is  the  point  decided. 
See  Dewey  v.  Dewey,  35  Vt.  555.  As  to 
what  joinder  of  interest  is  necessary  to 
make  a  partnership  in  lands,  see  White  v. 
Fitzgerald,  19  Wis.  480. 

(c)  Houghton  V.  Houghton,  11  Sim. 
491  ;  Morris  v.  Kearsley,  2  Younge  &;  C. 
139. 

((/)  Dyer  v.  Clark,  5  Met.  562  ;  Howard 
V.  Priest,  5  Met.  582  ;  Coster  v.  Clarke,  3 
Edw.  Ch.  238  ;  Galbraith  v.  Gedge,  16  B. 
Mon.  631  ;  Goodburn  v.  Stevens,  5  Gill,  1  ; 
Smith  V.  Jackson,  2  Edw.  Ch.  28.  Thus, 
if  the  firm  become  insolvent,  the  widow 
loses  dower.  Greene  v.  Greene,  1  Ohio, 
244  ;  Duhring  v.  Duhring,  20  Mo.  174. 
There  is  no  dower  in  the  real  estate  of  a 
partnership,  till  the  adjustment  of  part- 
nership accounts  ;  and  any  sale,  whether 
by  mortgage,  or  on  execution,  or  by  decree 
of    court,    will   bar   dower.      Simpson    v. 


Leach.  86  111.  286;  Uhler  v.  Semple,  20 
N.  J.  Eq.  288  ;  Willett  v.  Brown,  65  Mo. 
138.  On  the  other  hand,  if  the  i^roperty 
passes  out  of  the  partnership  to  a  stranger, 
as  he  is  not  i)nvy  to  the  trust,  but  holds 
the  estate  discharged  thereof,  the  widow 
can  claim  dower  of  the  vendee,  as  the  holder 
of  the  legal  estate  ;  nor  can  he  avail  him- 
self of  the  fact  that  the  land  was  partner- 
ship property,  as  the  trust  is  wholly  gone. 
Markham  v.  Merritt,  7  How.  (Miss.)  437. 
In  Tennessee,  it  is  held,  that,  in  conse- 
quence of  the  act  abolishing  joint  tenancy, 
Stat.  1784,  ch.  22,  land  of  the  jiartnership, 
bought  with  its  funds  and  used  for  its  pur- 
poses, unless  within  the  exception  in  fa\'or 
of  "useful  trade,"  &c.,  will  have  every 
attribute  of  real  property,  and  descend  to 
the  heir,  and  not  go  to  the  personal  rejjre- 
sentatives.  McAllister  v.  Montgomery,  3 
Hayw.  94  ;  Yeatman  r.  Woods,  6  Yeig. 
20  ;  Piper  w.  Smith,  1  Head,  93.  In  Vir- 
ginia, on  the  other  hand,  it  was  held,  in 
Pierce  v.  Trigg,  10  Leigh,  406,  that  real 
estate  which  became  stock  was  entirely  con- 
verted into  personalty,  and  the  widow  could 
take  no  dower.  But  this  decision  seems 
questioned  in  Davis  v.  Christian,  15  Gratt. 
11. 

(e)  Pugh  V.  Currie,  5  Ala.  446. 

(/)  Thus,  in  Collins  v.  Warren,  29 
Mo.  236,  as  this  was  not  done,  the  sur- 
vivor was  not  allowed  to  recover  from  the 
widow,  in  an  action  of  ejectment,  more 
than  an  undivided  moiety  ot  the  real 
estate. 


^  In  accordance  with  the  principles  already  stated,  a  widow  can  of  course  have  no 
dower  in  the  land  which,  because  of  the  unsettled  atiairs  of  the  firm,  still  remains  part- 
nership land.     //(  re  Ran.som,  17  F.  R.  331  ;  Paige  v.  Paige,  71  la.  318,   32  N,   W. 


§  274.]  OF   THE    REAL    ESTATE    OF    A    PARTNERSHIP.  363 

§  274.  Inheritance  of  Partnership  Real  Estate. — The  heir  always 
takes  the  real  estate  in  oi'der  to  suj)purt  the  legal  title,  and  is 
then  held  as  trustee  for  all  those  purposes  to  which  the  land 
must  be  devoted  in  order  to  make  it  effectually  partnership  prop- 
erty ;  {g)  having,  however,  the  right  to  require  that  the  real  property 
shall  not  be  sold  to  pay  debts  until  all  the  personal  property  is 
exhausted.  (A)  When  these  are  all  fuliilled,  he  then  holds  it 
discharged  from  claim,  precisely  as  if  it  had  never  been  other- 
wise. (J)  If  land  be  conveyed  to  partners,  in  fact  as  partnership 
property,  but  in  form  to  them  as  tenants  in  common,  and  one 
dies,  his  heir  becomes  tenant  in  common  with  the  other  part- 
ners, (y)  Here,  as  before,  he  holds  as  trustee  for  the  partnership 
until  this  trust  is  discharged,  and  then  for  himself.  And  it  is 
said  in  England,  that,  in  such  a  case,  if  the  iieir  has  a  beneficial  as 
well  as  legal  interest,  dower  would  be  allowed. (/c)  Here  it  cer- 
tainly would  be  as  soon  as  the  estate  were  cleared  from  all  liabil- 
ity for  the  debts  of  the  partnership.  ^ 

(r/)  See  ante,  §  264,  note  (t) ;  §  269,  v.  Currie,  5  Ala.  446  ;  Lang  v.  Waring,  25 
note  (0.  Ala.  625  ;  Andrews  v.  Brown,  21  Ala.  437. 

(A)   Laugv.  Waring,  25  Ala.  625.     So  (i)  Dyer   v.   Clark,    5  Met.    562.     See 

the  heirs  must  be  parties  when  a  sale  is     also  preceding  note,  and  cases  cited, 
feoiight  for  i)aynieut  of  firm  debts.     Pugli  {j)   See  preceding  notes. 

(k)  See  a«<e,  notes  (/i),  (i). 

360  ;  Hamilton  v.  Halpin,  68  Miss.  99,  8  So.  739  ;  Pierce  v.  Trigg,  10  Leigh,  406  ; 
Parrish  v.  Parrish,  88  Va.  529,  14  S.  E.  325  ;  Martin  v.  Smith,  25  W.  Va.  579.  And 
where  the  land  is  sold  to  pay  firm  debts,  the  widow  cannot  claim  dower  against  the  pur- 
chaser. Willet  V.  Brown,  65  Mo.  138.  See,  however.  Clay  v.  Field,  34  F.  R.  375.  In 
Bowman  v.  Bailey,  20  S.  C.  550,  it  was  held  that  the  widow  of  a  partner  might  claim 
dower  against  a  purchaser  from  the  firm,  the  firm  creditors  not  being  interested  in  the 
controversy. 

Where  the  debts  of  the  firm  are  all  paid,  and  a  balance  remains  in  the  shape  of  land, 
the  widow  has  dower.  Brewer  v.  Browne,  68  Ala.  210 ;  Lenow  v.  Fones,  48  Ark.  557, 
4  S.  W.  56  ;  Strong  v.  Lord,  107  111.  25.  It  has  been  held  that  where  the  real  estate 
of  one  partner  was  used  and  improved  b}^  the  firm,  the  widow  has  no  claim  to  dower  in 
the  improvements,  for  they  are  personalty  of  the  firm.  Grissom  v.  Moore,  106  Ind. 
296,  6  N.  E.  629. 

1  There  is  no  survivorship  of  the  partnership  real  estate  at  law  ;  the  legal  title  goes 
to  the  heir  of  the  deceased  partner.  Abernathy  v.  iloses,  73  Ala.  381  ;  Southern  Cotton 
Oil  Co.  V.  Henshaw,  89  Ala.  448,  7  So.  760  ;  Percifull  v.  Piatt,  36  Ark.  456  ;  Baker  v. 
.Mid<llebrooks,  81  Ga.  491,  8  S.  E.  320  ;  Cari:er  v.  Flexner  (Kr.)  17  S.  W\  851.  Though 
there  is  survivorship  of  the  title  of  a  leaseliold  interest,  owned  by  the  firm,  since  that  is 
personalty.  Oram  v.  Rothermel,  98  Pa.  300.  The  heir,  however,  takes  the  title  in 
trust  for  the  firm.  Logan  v.  Greenlaw,  25  F.  R.  299  ;  Clay  v.  Field,  34  F.  R.  375  ; 
Merritt  v.  Dickey,  38  ilich.  41  ;  Willet  v.  Brown,  65  Mo.   138. 

Since  the  surviving  partner  has  the  right  of  disposing  of  the  assets  to  pay  the  debts 
and  settle  the  accounts  of  the  firm,  he  alone  may  make  a  valid  conveyance  of  the  jiart- 
n.Mship  land.  Although  he  cannot  convey  the  legal  title,  he  disposes  of  the  entire 
ei[uitable  interest  ;  and  the  purchaser  may  have  a  conve3'aiice  from  the  heir  of  the 
deceased  partner  by  filing  a  bill  in  equity.     The  state  of  the  legal  title  to  the  land  is 


364  THE   LAW   OF   PARTNERSHIP.  [CH.    XL 

11"  lands  are  conveyed  to  partners  in  fact  as  partnership  property, 
but  in  form  as  joint  tenants,  equity  will  not  permit  any  snrvivor- 
ship,  but  will  treat  it  as  if  the  grantees  had  held  it  as  tenants  in 
common.  (Z) 

§  275.  Devised  Lands,  whether  different.  —  There  Seems  to  be 
some  disposition  in  Euuhiud  to  mai^e  some  distinction  between 
lands  bouaht  by  partnership  funds  for  partnership  purposes,  and 
those  which  are  devUed  to  j)artners  for  the  same  purpose.  (j)i) 
We  doubt,  however,  whether  it  would  be  carried  out  and  fully  ap- 
plied in  England.  If  a  father,  for  example,  having  two  sons  who 
were  partners,  devised  to  them  lands  either  as  tenants  in  common 
or  as  joint  tenants,  but  certainly  as  partners  and  for  partnership 
I)ui-poses,  we  think  equity  would  use  the  legal  title  for  partnership 
j)ur})oses  in  the  same  manner  as  if  it  had  been  bought  by  the  part- 
ners and  paid  for  by  money  bequeathed  to  them.  We  are  quite 
confident  such  would  be  the  rule  in  this  country,  (ii)  It  has  been 
held  in  England,  where  mortgages  were  devised  to  partners  and 

(/)  This  e(iiiitable  iuterference  is  more  have   declared   the   same   equitable    rule. 

usual  in   England  than  in  this   country,  Delaney    v.    Hutcheson,    2    Kand.     183  ; 

Broom   v.   Broom,   3    Mylne   &   K.   443  ;  Thayer'  v.  Lane,  Walk.  Ch.  200  ;  Dyer  r. 

Morris  v.  Kearsley,  2  Younge  &  C.  139  ;  Clark,  5  Met.  562  ;  Sumner  v.  Hampson, 

Houghton    V.    Houghton,    11    Sim.    491;  8  Ohio,  328  ;  Duhriug  y.  Duhring,  20  Mo. 

Fereday  v.  Wightwick,  1    Russ.  &  M.  45  ;  174  ;  Evans  v.  Gibson,  29   J\Io.  236  ;  Car- 

as  the  statutes  of  most  of  the  United  States  lisle  y.  Mulhern,  19   Mo.  56  ;    [Davies  v. 

have  changed  joint  tenancies  into  what  are  Games,  12  Ch.    D.   813]. 
practically  tenancies  in  common,  by  abol-  (m)  Phillips  v.   Phillips,   as  stated  in 

ishing  the  right  of  survivorship.     See  1  Bisset  on  Part.    50. 

"Washburn  on   Real  Property,  408,  where  (?i)  Dyer  v.  Clark,  5  Met.  562  ;   Burn- 

the  several  State  statutes  are  referred  to  at  side  v.  Merrick,  4  Met.   537  ;  Howard  v. 

length.      The  American    courts  generally  Priest,   5   Met.  582. 

immaterial.  The  power  of  the  survivor  is  just  as  great  if  the  entire  legal  title  was  in 
the  deceased,  in  trust  for  the  firm.  Shanks  v.  Klein,  104  U.  S.  18  ;  Allen  v.  Withrow, 
110  U.  S.  119  ;  Espy  v.  Comer,  80  Ala.  333  ;  Davis  v.  Smith,  82  Ala.  198,  2  So.  897  ; 
Br^en  v.  Richardson,  6  Col.  605  ;  Van  Staden  v.  Kline,  64  la.  180,  20  N.  W.  3;  Riley 
V.  Carter,  (Md.)  25  Atl.  667  ;  Hanson  v.  Metcalf,  46  Minn.  25,  48  N.  W.  441  ;  Mat- 
thews f.  Hunter,  67  Mo.  293;  Easton  v.  Courtwright,  84  Mo.  27.  Consequently  a 
creditors'  bill  against  the  survivor  need  not  make  the  heir  a  part)'.  Logan  v.  Green- 
law, 25  F.  R.  299.  Nov  is  he  a  necessary  party  to  a  bill  for  an  account  between  the 
executor  of  the  deceased  partner  and  the  survivor.  Van  Aken  v.  Clark,  82  la.  256,  48 
N.  W.  73.  But  if  one  of  the  objects  of  the  bill  is  to  secure  a  conveyance  of  the  legal 
title,  the  heir  is  of  course  a  necessary  part}'.     Abernathy  v.  Moses,  73  Ala.  381. 

Since  the  power  of  the  surviving  partner  over  the  land  is  a  result  of  the  equity  of 
the  firm,  he  can  convey  no  interest  in  the  land  by  a  proceeding  which  is  not  approved 
by  a  court  of  equity ;  as  by  making  a  mortgage  which  operates  as  a  preference  to  a 
creditor.  Espy  v.  Comer,  80  .Ala.  333.  So  by  mortgaging  to  secure  his  individual 
debts.     Brown  v.   Watson,  66  Mich.   223,  33  N.  W.  493. 

After  the  partnership  affairs  have  been  settled,  and  real  estate  remains,  the  heir  of 
the  deceased  partner  takes  it  and  not  his  executor.  Martin  v.  Morris,  G2  Wis.  418,  22 
N.  W,  525.     But  see  In  re  Ransom,  17  F.  R,  331. 


§  276.]  OP    THE    REAL    ESTATE    OF    A    PARTNERSHIP.  365 

they  bought  the  equities  of  redemption,  thus  completing  title  in 
themselves,  the  land  was  not  partnership  property,  nor  to  be  treated 
as  personal  property.  The  case  was  perhaps  well  decided  on  its 
tacts,  (o)  But  we  believe  no  rule  exists  in  England,  and  certainly 
none  in  this  country,  that  real  estate  so  acquired  should  not  be 
considered  partnership  property,  if  it  was  intended  so  to  be,  and 
was  so  treated,  by  the  parties  interested. 

§  276.  Right  of  Creditors  of  the  Firm  to  its  Real  Estate.  —  This 
right  whenever  it  arises,  as  will  be  inferred  from  what  has  been 
said,  is  the  same  as  it  is  to  the  personal  estate  of  the  partnership. 
But  it  must  be  worked  out  by  the  power  of  equity  to  hold  the 
legal  owner  as  trustee  for  those  who  are  beneficially  interested. 
A  question  of  some  importance,  at  least  in  this  country,  arises,  as 
to  when  the  creditors'  right  to  real  estate  may  be  enforced.  It  is 
this  :  Have  the  creditors  of  a  firm,  in  equity,  under  all  circum- 
stances the  same  right  to  the  real  estate  that  they  have  to  the  per- 
sonal estate  of  the  firm  ;  or  have  they  only  a  right  to  resort  to 
the  real  estate  if  the  personal  estate  prove  to  be  insufficient  to  pay 
the  debts  ?  The  difference  might  be  a  very  important  one  in  this 
country,  so  far  at  least  as  dower  is  concerned.  It  might,  indeed, 
be  for  the  interest  of  the  heir  to  have  the  land  of  a  partnership 
appropriated  in  the  first  place  to  pay  the  debts.  If  the  firm  were 
insolvent  it  would  made  no  difference,  (p)  If  not,  the  heirs  would 
lose  the  land,  but  would  save  from  the  surplus  of  personal  just  as 
much  as  they  would  lose  in  the  land,  and  would  take  it  free  from 
the  encumbrance  of  dower.  But,  in  such  a  case,  a  court  of  equity 
applied  a  similar  rule  to  that  which  obtains  in  the  settlement  of  an 
estate  of  a  deceased  person,  (r/)  The  personal  estate  is  applied  to 
the  payment  of  debts  in  the  first  place  ;  if  that  be  exhausted  and 
insufficient,  then  so  much  of  the  real  estate  is  so  applied  as  may  be 
necessary.     And  so  it  is  in  case  of  partnership  ;  and  therefore  the 

(o)    Phillips  V.  Phillips,  Bisset  on  Part:,  before  the  private  creditors  can  take  the 

50.     This  case  has  not  been  questioned  in  jM-operty,  or  any  part  of  it,  by  foreclosure, 

any  decision  that  we  are  aware  of,   and  is  Conant  v.  Frary,  49  Ind.  530. 
recognized  by  Mr.  Lindley,  Law  of  Part.  (q)  The  doctrine  of  marshalling  assets 

pp.  553,  554,  though,  it  seems,  with  some  will  always  be  applied  in  cases  where  the 

hesitation  ;  and  it  is  certainly  against  the  aid  of  equity  is  claimed  to  reach  a  fund,  by 

broad  rules  given  by  him  as  the  result  of  one  who  has  recouise  to  two  funds  in  tiie 

the  EnglLsh  authorities.     [See  EaiLsbach  v.  same  right;  that  is,  the  creditor  will   be 

Lovejoy,  116  111.  442,  6  N.  E.  504].  compelled  to  resort  to  that  fund  which  lie 

(p)   But  see,  in  Lang  I'.  Waring,  25  Ala.  alone   has    recourse    to,    and   exhaust   it, 

625,  that  the  heirs  are  not  cut  off  from  all  before  he  can   subject   the   other  to   his 

defence,  even  by  insolvency  of  the  firm,  demand.     Adams'  Eq.  271,  274,  and  cases 

Where   a   partner   mortgages   partnership  cited  ;    Bardwell   v.   Perry,   19  Vt.   292  ; 

real  estate  to  secure  his  individual  debts,  and,   generally,   cases  cited   ante,    §  256, 

the  partnership  creditors  must  first  be  paid  note  {u). 


366  THE    LAW    OF    PARTNERSHIP.  [CH.    XI 

whole  real  estate  of  a  partnership,  if  none  of  it  were  wanted  for 
payment  of  debts  or  partners'  shares,  would  be  as  unaffected  in 
equity  as  at  law  ;  and,  if  part  of  it  were  so  wanted,  that  part  only 
would  be  treated  as  personal  property,  leaving  the  residue  un- 
touched. (/•)' 

§  277.  Right  and  Power  of  the  Partners  as  to  the  Real  Estate. 
—  This  seems  to  be,  in  equity,  entire  and  complete,  so  far  as  the 
payment  of  debt  goes  ;  and,  after  that  payment,  so  far  as  the 
adjustment  of  the  mutual  claims  or  balances  of  the  partners  is 

(r)   In  case  of  dissolution  by  the  death  Currie,  5  Ala.  446  ;  Davis  r.  Cliiistian,  15 

of  a  partner  holding  title  to  the  firm's  real  Gratt.  11;   Duhring  v.  Duhring,   20  Mo, 

estate,  neither  the  survivor  nor  the  part-  174;    Carlisle   v.    Miilhern,   19    Mo.    56; 

uership  creditors  can  claim  the  aid  of  a  Richardson    v.    Wyatt,    2    Desaus.    471  ; 

court  of  equity  to  compel  the  widow  and  Dillon   v.  Brown,  11    Gray,   179.     In  the 

heirs  to  release  their  rights,  until  the  ])er-  cases  where  an  apparent  right  has   been 

sonal  as.sets  are  exhausted.     Lang  v.  War-  given  to  the  survivor  to  call  upon  the  heir 

ing,  25  Ala.    625,  correcting  Andrews  v.  peremptorily  to  convey,  it  will  always,  we 

Brown,  21  Ala.  437.     As  to  the  right  of  think,  be  found  that  the  land  was  needed 

partnership  creditors,  when  the  real  assets  to  pay  the  debts  of  the  firm.     Pugh  v. 

are  reijuisite  to  a  full  satisfaction  of  their  Currie,  5  Ala.  446  ;  Sumner  v.  Hampson, 

debts,  to  call  upon  the  heirs  and  widow  to  8  Oitio,  328.     And  the  case  of  Andrews  v. 

convey  and  release  their  rights,  through  Brown,  21  Ala.  437,  which  seemed  to  dis- 

the  medium  of  assent  to  a  sale  by  the  sur-  regard    this   rule,    was  overruled   on    this 

vivor,   see  Sumner  v.  Hampson,  8   Oliio,  point  by  Lang  v.  Waring,   25  Ala.   625. 
328;    Lang   v.    Waring,  supra;    Pugh  v. 

1  The  firm  creditors  may  come  upon  the  land  of  the  partnership  ;  and  they  have 
priority  over  the  separate  creditors  of  a  partner,  even  if  the  land  is  in  the  name  of  that 
partner  only.  Neither  the  partner  himself  nor  his  creditors  have  any  right  to  the  land 
as  against  the  firm  creditors.  Wiegand  v.  Copeland,  14  F.  R.  118  ;  Ames  v.  Ames,  37 
F.  K.  30  ;  Paige  v.  Paige,  71  la.  318,  32  N".  W.  360  ;  Mallory  v.  Russell,  71  la.  63,  32 
N.  W.  102  ;  Smith  v.  Jones,  18  Neb.  481,  25  N  W.  624  ;  Messer  v.  Messer,  59  N.  H. 
375  ;  Ross  v.  Henderson,  77  N.  C.  170  ;  Page  v.  Thomas,  43  Oh.  St.  38,  1  N.  E.  79  ; 
Clialfant  v.  Grant,  3  Lea,  118  ;  Diggs  v.  Brown,  78  Va.  292  ;  Hardy  v.  Norfolk  M'f'g 
Co.,  80  Va.  404.  So  a  mortgage  of  the  land  by  the  partner  in  whose  name  it  stands, 
to  secure  a  pre-existing  individual  debt,  is  postponed  to  a  later  accruing  firm  claim. 
Norwalk  Nat.  Bank  v.  Sawyer,  38  Oil.  St.  339.  The  creditors  may  maintain  a  bill  in 
equity  to  reach  the  land  and  have  it  applied  to  their  debts  ;  and  this  is  their  appro- 
priate remedy.  Wiegand  v.  Copeland,  14  F.  R.  118  ;  Ames  v.  Ames,  37  F.  R.  30; 
Golden  State  &  M.  Iron  Works  v.  Davidson,  73  Cal.  389,  15  Pac.  20.  And  where  a 
partner  in  whose  name  it  stands  sells  partnership  land  and  invests  the  proceeds  in  other 
land,  the  creditors  may  reach  and  apply  to  their  debts  the  newly  purchased  land. 
Chalfant  v.   Grant,   3   Lea,    118. 

A  transfer  by  one  partner  of  his  legal  title  to  the  partnership  land  does  not  affect 
the  right  of  the  firm  creditors  to  secure  payment  out  of  the  land.  Conant  v.  Frary,  49 
Ind.  530  ;  Hiscock  v.  Phelps,  49  X.  Y.  97  ;  Greenwood  v.  Marvin,  111  N.  Y.  423,  19 
N.  E.  228  ;  Lewis  v.  Anderson,  20  Ohio  St.  281  ;  Norwalk  Nat.  Bank  v.  Sawyer,  38 
Ohio  St.  339;  Jones  v.  Smith,  31  S.  C.  527,  10  S.  E.  340  ;  Cunningham  v.  Ward,  30 
W.  Va.  572,  5  S.  E.  646.  For  this  reason  such  a  transfer  cannot  be  in  fraud  of  credi- 
tors, and  they  have  no  right  to  coiii])lain  of  it  or  to  have  it  enjoined.  Jones  v.  Smith, 
31  S.  C.  527,  10  S.  E.  340  ;  Cunningham  v.  Ward,  30  W.  Va.  572,  5  S.  E.  646. 


§  277.]  OF   THE   REAL   ESTATE    OF   A    PARTNERSHIP.  367 

concerned,  (s)  But  there  is  a  limitation  as  to  the  power  of  a 
partner  over  this  real  estate,  which  is  this  :  No  partner  and  no 
proportion  of  the  partners,  can  sell  or  transfer  tlie  real  estate  of 
the  firm — outright  for  money,  or  by  way  of  mortgage  to  secure 
a  debt,  or  to  assignees  in  trust  for  debts  —  without  the  consent 
and  authority  of  the  other  partners.  The  first  point — that  he 
who  happens  to  have  the  legal  title  cannot  sell  the  real  estate  with- 
out the  consent  and  authority  of  the  rest,  so  as  to  give  title  to  a 
grantee  having  notice — is  evidently  the  law.  And  if  he  make 
a  mortgage  to  secure  a  debt,  or  an  assignment  in  trust  for  credit- 
ors, by  which  the  legal  title  would  pass,  equity  will  not  sustain 
the  transaction,  even  supposing  it  free  from  the  taint  of  fraud,  (t) 
It  would  seem,  therefore,  that  the  power  of  a  partner  over  the 
real  estate  of  the  firm  is  less  than  that  over  the  personal  estate. 
He  may  contract  debts  and  make  contracts  which  will  indirectly 
reach  the  realty,  because  this  must  finally  be  subject  to  the  debts 
of  the  firm.  But  he  cannot  directly  convey  or  appropriate  it, 
excepting  so  far  as  he  has  the  legal  title  in  himself ;  and  then  a 
purchaser  with  knowledge,  or  the  means  of  knowledge,  takes  the 
land  subject  to  all  the  equities  of  the  partners,  (u)  ^    And,  by  the 

(s)  Dihvorth  v.  Jlayfield,  36  Mo.   40  ;  (')  Hanff  v.  Howard,  3  Jones  Eq.  440  ; 

Andrews  v.  Brown,  21  Ala.  437  ;  Lang  v.  Baldwin  v.  .Johnson,  Saxt.  Ch.  441. 
Waring,  2.5   Ala.  625  ;    Pngh  v.  Carrie,  5  (u)   Forde  v.  Herron,  4  Munf.  316  ;  per 

Ala.    446;    Davis  v.  Christian,  15  Gratt.  Walworth,  Chancellor,  in  Buchan  r.  Sum- 

11  ;  Shearer  v.  Paiue,  12  Allen,  289.  ner,  2  Barb.  Ch.  175,  198. 

1  A  partner  has  no  power  to  convey  the  real  estate  of  the  firm.  Piatt  v.  Oliver, 
3  McLean,  27  ;  Anderson  v.  Tompkins,  1  Brock.  456  ;  Brunson  v.  Morgan,  76  Ala. 
593;  Tapley  v.  Batterfield,  1  Met.  515;  Berry  v.  Folkes,  60  Miss.  576;  Coles  w. 
Coles,  1.5  Johns.  159.  And  he  therefore  cannot  mortgage  the  real  estate,  even  to 
secure  a  firm  debt.  Printup  v.  Turner,  65  Ga.  71.  Nor  can  he  make  a  binding  agree- 
ment to  convey  land  to  an  employee  in  lieu  of  wages.  Berry  v.  Folkes,  60  Miss.  576. 
There  must  generally  be  a  special  authority,  delegated  to  one  partner,  to  give  validity 
even  to  an  executory  contract  for  the  sale  of  land  employed  in  the  partnership  business. 
Lawrence  v.  Taylor,  5  Hill,  107.  But  where  a  partnership  is  formed  to  deal  in  land 
one  partner  may  make  a  valid  contract  for  the  sale  of  land,  since  that  is  the  regular 
course  of  the  business.  Thompson  v.  Bowman,  6  Wall.  316  ;  Rovelsky  v.  Brown,  92 
Ala.  522,  9  So.  182  ;  Chester  v.  Dickerson,  54  N.  Y.  1. 

If  a  partner  attempts  to  convey  the  real  estate  of  the  firm,  his  deed  is  good  as 
against  himself  only  ;  it  passes  such  part  of  the  land  as  may  finally  come  to  him  upon 
distribution.     Elliott  v.  Dycke,  78  Ala.  150  ;  Printup  v.  Turner,  65  Ga.  71. 

If  the  other  partners  consent,  however,  the  deed  of  a  single  partner  is  effective  to 
convey  partnership  land.  Sullivan  v.  Smith,  15  Neb.  476,  19  N.  W.  620  ;  Stroman  v. 
Yarn,  19  S.  C.  307  ;  Salinas  v.  Bennett,  33  S.  C.  285,  11  S.  E.  968  ;  Frost  v. 
Wolf,  77  Tex.  455,  14  S.  W.  440  ;  Kumery  v.  McCulloch,  54  Wis.  565,  12  N.  W.  65. 
Such  assent  or  authority  may  appear  by  express  contract ;  as  where  the  articles  of  an 
association  to  deal  in  lands  provide  that  deeds  shall  be  executed  by  the  president  and 
secretary.      Batty  v.  Adams  Co.,  16  Neb.   44,  20  N.  W.   15.     Or  the  authority  may 


368  THE    LAW    OF    PARTNERSHIP.  [CH,    XL 

same  principle,  it  is  held,  in  England,  that  the  contracts  of  a 
partner  about  the  land  of  the  firm —  as  for  its  sale,  for  example 
—  have  no  force,  unless  they  are  made  with  the  consent  and  by 
the  authority  of  the  firm.  If  this  were  shown,  however,  although 
not  in  such  a  way  as  to  give  any  interest  or  right  or  remedy  at 
law,  equity  would  undoubtedly  enforce  the  contract,  if  it  were 
itself  legal. 

A  different  question  arises  when  a  partner  docs  not  undertake 
to  dispose  of  the  property  or  interest  of  the  firm  in  the  real 
estate,  but  sells  his  own  interest  in  it  to  a  stranger.  This  it  has 
been  held  he  may  do,  and  that  the  sale  is  valid  as  against  his 
copartners,  although  it  would  not  be  valid  as  against  the  creditors 
of  the  firm,  (im) 

A  sale  of  partnership  real  estate  by  order  of  court,  to  pay  the 
debts  of  a  deceased  partner,  conveys  only  his  interest  as  partner, 
although  the  whole  legal  title  was  in  the  deceased,  {mm) 

§  278.  Conveyances  of  Partnership  Land  to  Strangers.  —  We 
have  repeatedly  remarked  that  the  law  respects  and  upholds  the 
legal  title  to  land  by  deed  and  record.  Nor  will  equity  disregard 
or  supersede  this  in  relation  to  innocent  purchasers.  Thus,  if 
land  which  certainly  belongs  to  a  partnership  is  held  in  the  name 
of  one  partner,  and  he  conveys  it  for  value  to  a  person  who  has  no 
knowledge,  or  reasonal)le  means  of  knowlege,  that  it  belongs  to 
the  firm,  such  person,  we  have  seen,  will  hold  it  as  against  the 
firm.  ^     Of  this  there  can  be  no  doubt,  and  as  little  that  if  the 

(uu)  Treadwell   v.    Williams,  9  Bosw.  {uiiu}  M'Cormick's  Appeal,  57  Pa.  54. 

649. 

appear  from  circumstances  ;  as  where  a  firm  took  real  estate  in  settlement  of  a  debt, 
intending  to  sell  it  at  once,  and  title  was  taken  in  the  name  of  one  partner.  It  was 
held  that  he  had  authority  to  convey  it.  Paton  v.  Baker,  62  Li.  704,  15  N.  W.  586. 
So  where  the  deed  was  made  by  one  partner  in  the  jtresenoe  and  with  the  acquiescence 
of  the  others.  Ferguson  v.  Hanauer,  (Ark.)  19  S.  W.  749  ;  Greer  v.  Ferguson  (Ark.), 
19  S.  W.  966.  Wlieie  a  partner  absconded  with  all  the  available  ])ersonal  assets  of  the 
firm,  it  was  held  that  the  copartner  was  authorized  to  convey  the  real  estate  for 
the  benefit  of  creditors.     Sullivan  v.  Smith,  15  Neb.  476,  19  N.  W.  620. 

It  was  held  in  Smith  v.  Smith,  80  Cal.  323,  21  Pac.  4,  22  Pac.  186,  549,  that  one 
partner  may  maintain  an  action  to  eject  an  intruder  from  land  owned  by  the  partner- 
ship. 

^  There  is  no  doubt  that  a  conveyance  of  the  legal  title  to  a  purchaser  for  value  of 
partnership  land,  without  notice  of  the  partnership  claim,  gives  him  a  valid  title  as 
against  either  the  partners  or  the  firm  creditors.  McNeil  v.  Congregational  Society,  66 
Cal.  105  ;  JIcMillan  v.  Hadley,  78  Ind.  590  ;  Tarbell  v.  West,  86  N.  Y.  280  ;  Kepler 
V.  Erie  Dime  Savings  &  Loan  Co.,  101  Pa.  602.  So  an  innocent  mortgagee  of  the 
partner  who  holds  legal  title  is  protected.  Seeley  v.  Mitchell,  85  Ky.  508,  4  S.  W. 
190  ;  Pi-iest  v.  Chouteau,  85  Mo.  398.  The  proper  method  of  spreading  upon  the 
record  notice  of  the  firm's  right  to  laud  would  seem  to  be  to  put  the  land  in  the  names 


§  278.]  OF    THE    REAL    ESTATE    OF    A    PARTNERSHIP,  369 

trrimtee  knew,  or  had  sul'ficieut  means  of  kuowinu\  that  it  be- 
longed  to  the  firm,  his  title  will  be  annulled,  or  he  will  be  charged, 
as  trustee  for  tiie  (irni.  (^h)  It  is  a  much  more  difficult  question 
whether  such  inntjcent  [jurchaser  holds  the  property  as  against 
creditors.  In  the  absence  of  decisive  authority,  we  should  say, 
on  general  principles,  that  he  would.  If  a  partner  sells  a  part 
of  the  merchandise  of  his  firm,  fraudulently  against  the  firm  or 
its  creditors,  but  apparently  in  due  course  of  business,  so  as  to 
excite  no  suspicion,  and  give  no  notice  to  the  purchaser,  we  should 
say  that  the  purchaser  would  hold  it  both  as  against  the  firm  and 
their  creditors.  On  similar  grounds,  we  should  say  that  a  regular 
transfer  of  land,  for  value  to  an  innocent  stranger,  would  give 
him  title  against  the  firm  and  the  creditors  of  the  firm,  although 
the  firm  were  insolvent,  and  the  sale  fraudulent  on  the  part  of 
the  partner  selling. 

(v)  M'Dermot  v.  Laurence,   7  S.  &  R.  decision   was  sustained  by    the  court  in 

438  ;    Forde  v.    Herron,    4     Muuf.    316  ;  bank.     In    the    later   cases   of  Kramer  v. 

Walworth,    Chancellor,    Buchan  v.    Sum-  Arthurs,    7    Barr,    165,     and     Kidgway's 

ner,    2    Barb.     Ch.    198;    Tillinghast    v.  Appeal,  15  Pa.  177,  the  same  doctrine  was 

Champlin,    4   R.  I.  173,  209;    per  Sliaw,  recognized.  But  see  Moderwell  u.  MuUison, 

('.  J.,  in   Dyer  v.  Clark,  5  Met.  562,  580.  21    Pa.   257,  Coder  v.  Huling,  27  Pa.  84, 

Li  some  cases  in  Pennsylvania,  a  different  where  this  doctrine  seems  somewhat  quali- 

doctrine   prevails.     In   the   earliest   case,  fied.     Where,  as  is  geuemlly  the  case,  the 

M'Dermot  i\   Laurence,  Tilghmau,  C.  J.,  purchaser  is  a  creditor   of   one  partner,  it 

carefully  guarded  against  the  case  where  seems  held,  that  he  will  be  postponed  to 

the    ])urchaser   had    reasonable   means  of  the   demands   of  the  partnership,  —both 

knowledge ;    but   in   Hale   v.   Henrie,    2  creditors'  and  partners'  claims,  —  notwith- 

Watts,    145,    the    court,    Gibson,    C.    J.,  standing   the    recorded   title.      Edgar   v. 

absolutely  excluded  evidence  showing    a  Donnally,  2  Munf.  387  ;  Jarvis  v.  Brooks, 

clear  knowledge   of  the  partnership  equi-  27  N.  H.  36  ;  Hantf  u.  Howard,  3  Jones, 

ties,  holding  that  the  purchaser  need  only  Eq.  440  ;  Tillinghast  v.   Champliu,  4  R. 

rely   on   the    registered    title  ;    and    his  I.  173. 

of  A.  B.  and  C,  as  they  are  partners  iu  the  firm  of  A.  B.  &  Co.  A  conveyance  to 
three  in  certain  shares,  "such  being  their  interests  in  "  a  certain  firm,  has  been  held 
not  to  be  notice  that  the  land  was  partnership  land.  Van  Slyck  v.  Skinner,  41  Mich. 
186,  1  X.  W.  971.  It  would  seem  clear  that  even  though  there  is  no  notice  on  the 
records  of  the  claim  of  the  partnership,  a  creditor  of  an  individual  partner  in  whose 
name  the  land  stands  cannot  hold  the  land  against  firm  creditors.  Crooker  v.  Crooker, 
46  Me.  250  ;  Jarvis  v.  Brooks,  27  X.  H.  37.  The  rule  in  Pennsylvania  is,  however, 
contra,  Ridgway'  s  Appeal,  15  Pa.  177. 


24 


THE   LAW   OF   PARTNERSHIP.  [CH.    XIL 


CHAPTER  XII. 

OF   DISSOLUTION. 

§  279.  Duration  of  Partnership. — When  a  partnership  is  formed, 
the  partners  may  determine  at  their  pleasure  what  its  duration 
shall  be.  A  partnership,  having  once  begun,  will  be  persumed 
to  continue  until  there  is  some  evidence  of  its  termination,  (a ) 
And,  even  after  a  dissolution,  the  partnership,  or  at  least  a  kind  of 
community  of  interest,  of  power,  and  of  liability,  continues,  as  we 
shall  see,  for  some  purposes,  and  for  so  long  a  time  as  is  necessary 
to  carry  those  ])urposes  into  effect.  In  general,  however,  we  may 
say  that  a  partnership  ends  by  its  dissolution.  And  we  will  now 
proceed  to  consider  the  subject  of  dissolution  of  partnership  ;  and, 
particularly,  how  many  ways  there  are  in  which  a  partnership  may 
be  dissolved,  and  what  are  the  effects  of  each  kind  of  dissolution. 

Dissolution  of  partnership  takes  place  in  seven  different  ways  : 
1.  By  the  provision  of  the  articles.  2.  By  the  will  of  all  the  jjart- 
ners.  3.  By  act  of  one  or  more  of  the  partners  alone.  4.  By  a 
change  in  the  partnership.  5.  By  the  death  of  a  partner,  6.  By 
decree  of  a  court  of  equity.     7.  By  bankruptcy. 

§  280.  Partnership  for  Term  of  Years. — Perhaps  there  is  no  one 
thing  more  frequently  provided  for  by  the  articles  than  the  dura- 
tion of  the  partnership.  Where  this  is  done  in  a  simple  form,  as 
by  the  mere  statement  that  "  this  partnership  shall  continue  for 
the  period  of  five  years  from  this  date,"  there  can  be  no  question 
about  its  meaning,  and  none  about  its  legal  obligation.  When  tiiat 
period  expires,  or  the  time  for  dissolution  arrives,  the  partnership 
dies,  of  course.  It  may  be  continued  by  agreement,  and  often  is ; 
but  this  is,  in  fact,  a  new  partnership.  And  the  old  articles  are 
of  use  only  as  evidence  to  assist  in  determining  its  terms ;  and 
they  will  be  decisive  on  this  point,  if  by  the  agreement  the  terms 
of  the  new  one  are  to  be  the  same  with  those  of  the  old.  The 
question  often  occurs,  however,  What  can  a  partner  do,  who  wishes 

(a)  Howe  i\  Thayer,  17  Pick.  91.  But  partners  ten  months  before  the  note  in 
in  Rogers  v.  Reed,  18  Me.  257,  the  court  suit  was  signed,  was  not  evidence  that 
held,    that   evidence   that    persons    were     they  were  so  at  that  time. 


§  281.]  OF    DISSOLUTION.  371 

to  terminate  such  a  partnership  before  the  agreed  period  arrives? 
And  we  have  already  seen  that  there  is  much  difficulty  in  determ- 
ining how  far  the  j)arties  are  bound  by  such  agreement  in 
practice.  No  doubt  exists  that  equity  may  decree  dissolution  for 
cause,  whatever  be  the  agreement,  or  may  I'cfuse  such  a  degree, 
and  even  enjoin  a  continuance  of  the  partnersiiip.  And  we  shall 
presently  see  that  certain  acts,  which  would  seem  to  be  always  m 
the  power  of  a  partner,  as  a  transfer  of  his  interest,  or  his  insol- 
vency, or  retirement  in  any  way,  generally  dissolve  the  partner- 
ship. And  the  question  has  arisen,  whether  equity  will  ever 
compel  parties  to  remain  in  this  relation,  after  it  has  become  cei'ta in 
that  there  is  no  longer  mutual  confidence  or  regard  or  desire  for 
continuing  the  connection.  This  question  we  have  already  touched 
upon  ;  {b)  iind  it  is  perhaps  impossible  to  give  even  a  general  rule 
on  the  subject,  unless  we  venture  to  state  this  to  be  one  :  That 
equity  will  not  in  such  case  decree  a  continuance  of  the  partner- 
ship because  the  agreed  period  has  not  expired,  unless,  in  the  first 
place,  a  decided  wrong  and  injury  would  be  inflicted  by  the  present 
dissolution  ;  and,  secondly,  it  is  practicable  for  the  court  to  insist 
upon  such  a  continuance  as  will  in  fact  prevent  the  threatened 
miscliief,  without  doing  other  harm,  (c) 

§  281.  Time  of  Dissolution  Conditional. — The  provision  in  the 
articles  on  this  subject  may  not  be  so  simple  as  above  suggested. 
It  may  be  that  the  partnership  shall  continue  until  certain  cir- 
cumstances occur,  or  until  one  partner  or  the  other  does  certain 
things.  In  such  a  case,  there  is  no  dissolution  by  the  articles 
until  the  circumstances  occur,  or  the  act  be  done.  Difficult  ques- 
tions of  fact  may  arise  under  such  a  clause  ;  but.  so  far  as  a  ques- 
tion of  law  can  come  from  it,  it  must  be  governed  by  the  ordinary 
principles  of  contracts  on  a  condition.  (cZ) 


(b)  See  ante,  §§  163,  207.  And  see  Beaver  v.  Lewis,  14  Ark.  138  ;  Mann  v. 
post,      309,  note  (c).  Connell,  1  Whart.  388  ;  Whitton  v.  Smith, 

(c)  Chavauy  v.  Van  Somnier,  cited  I  1  Freem.  Ch.  (Miss.)  231  ;  Blake  v.  Dor- 
Swanst.  512,  note,  and  3  Wooddes.  Lect.  gan,  1  Greene  (Iowa),  5-10;  Garretson  v. 
416,  note;  Barring  v.  Dix,  1  Cox,  213;  Weaver,  3  Edw.  Ch.  385;  Kennedy  v. 
Smith  V.  Jeyes,  4  Beav.  503  ;  Harrison  v.  Kennedy,  3  Dana,  239  ;  Gowan  v.  Jeffries, 
Tennant,  21  Beav.  482  ;  In.  re  Electric  2  Ashm.  296.  As  to  seasonable  time,  see 
Telegraph  Co.  of  Ireland,  22  Beav.  471  ;  Wheeler  v.  Van  Wart,  2Jur.  252;  Reade 
Waters  v.  Taylor,  2  Ves.  &  B.  229  ;  Skin-  v.  Bentley,  3  Kay  &  J.  271,  4  Kay  &  J.  65  ; 
ner  v.  Dayton,  19  Johns.  538  ;  Peacock  v.  Potter  v.  Gray,  1  R.  I.  430.  As  to  the 
Peacock,  16  Ves.  56  ;  Crawshay  n.  Maule,  grounds  on  which  equity  will  decree  a  dis- 
1  Swanst.  495 ;  Pearpoint  v.  Graham,  4  solution,  see  Meaher  v.  Cox,  37  Ala. 
Wash.  C.  C.  234  ;  Cape  Sable  Co.'s  Case,  201. 

3  Bland,  674  ;  Monroe  v.  Conner,  15  Me.  (d)  See   2   Pars.  Contr.  (5th   ed)  525- 

180  ;  Howell  v.    Harvey,     5    Ark.    281  ;  527. 


372  THE    LAW    OF    PARTNERSHIP.  [CH.    XII, 

§  282.  Time  of  Dissolution  impHed. — The  articles  may  Olllit  all 
reference  to  the  terminatiuu  ot  the  partnership  ;  and  sometimes 
the  agreemcnls  as  to  the  partnership  are  only  oral,  {e^  and  some- 
times the  partners  expressly  agree  simply  to  be  partners,  leav- 
ing all  tiie  rest  to  their  mutual  but  silent  understanding,  or  to 
time  and  the  operation  of  law.  (/)  In  these  cases,  it  may  be  a 
question  whether  the  facts  and  circumstances  do  not  imply  or  raise 
a  presunii)tion  of  law  that  there  was  some  agreement  for  a  definite 
term.  This  (piestion  has  been  not  unfrequently  mooted,  and  some- 
times it  seems  to  have  been  decided  on  doubtful  principles.  We 
certainly  should  not  deny  that  there  may  be  such  inferences  or  im- 
plications ;  but  they  should  not  readily  be  admitted.^ 

If,  for  exam})le,  a  partnership,  needing  land  or  a  store  for  its 
business,  hired  one,  paying  the  rent  from  partnership  funds,  and 
using  it  for  partnership  purposes,  so  as  to  leave  no  doubt  that  it  is 
partnership  property,  could  it  be  said  that  the  lease  implies  au 
agreement  that  the  partnership  shall  continue  until  the  lease  ex- 
pires ?  We  think  not ;  and  the  best  authorities  lead  to  this  con- 
clusion. (.^)  As  a  matter  of  actual  prol)ability,  such  a  lease  is 
very  slight  evidence  of  any  such  intention.  They  may  have  taken 
it  for  many  years,  because  they  could  not  get  it  otherwise,  and 
■were  willing  to  take  the  risk  of  disposing  of  it  when  they  should 
dissolve ;  or  they  may  have  taken  it  in  order  to  be  sure,  at  all 
events,  of  the  premises  as  long  as  they  might  want  them.  Other 
suppositions  might  be  made .  so  many,  indeed,  that  we  think  the 
lease  while  standing  alone  would  not  amount,  even  if  wholly  un- 
ex])lained,  to  prima  facie  evidence,  either  in  fact  or  in  law,  of  any 
understanding  that  the  partnership  siiould  last  as  long  as  the  lease 
run. 

So,  too,  if  the  partnership  entered  into  long  and  continuing  con- 
tracts of  business,  or  engaged  in  some  transaction  which  could  not 
be  closed  for  a  considerable  period  without  great  loss,  we  should 
say,  that  nothing  of  this  kind  would  be  very  strong  evidence  of  a 

(e)  Ante,  §  6.  298,    307  ;    Alcock    v.    Taylor,    Tamlyn, 

(/)  Ante,  §  159.  506  ;  Jeffeiys  v.  Smith,  1  Jac.   &  W.  301. 

(g)  Crawshay  v.  Maule,  1  Swanst.  495  ;  See    Marshall   v.   Marshall,    cited   2    Bfll 

Featherstouhaugh    v.    Fenwick,    17    Ves.  Comin.  641,  n.  3,  and  633,  n.  1. 

^  Where  it  was  provided  in  the  articles  of  partnership  between  A  &  B,  that  if  A 
survived  he  might  get  all  the  assets  upon  payment  of  a  certain  sum  to  B's  representa- 
tives, and  if  B  survived  he  should  have  all  the  assets  without  payment,  it  was  held 
not  to  be  a  partnership  at  will,  but  for  the  term  of  their  joint  lives.  Dobbins  v.  Tatem, 
(N.  J.  Eq.)  25  Atl.  544.  For  an  agreement  in  which  the  circumstances  were  deemed 
(with  perhaps  too  little  consi<leration)  sufficient  to  show  that  the  partnership  was  not  at 
will,  see  Ball  v.  Britton,  58  Tex.  57. 


§  283.]  OF   DISSOLUTION.  373 

definite  understanding  or  agreement  for  continuance.  (A)  There 
may  be  many  ways  of  transferring  or  cancelling  such  contracts,  or 
bringing  such  transactions  to  a  close,  or  even  of  continuing  them 
after  the  partnership  has  closed.  We  should  admit  that  all  cir- 
cumstances of  this  kind  might  be  admissible  and  useful  evidence 
in  connection  with  the  general  course  of  the  business,  the  usage 
relating  to  it,  and  all  those  facts  which,  looking  to  the  future,  im- 
ply an  intention  in  regard  to  it.  But,  so  far  as  a  general  princij)le 
can  be  given  for  this  class  of  questions,  it  must,  we  think,  be  this  : 
That  equity  would  not  decide  on  such  grounds  that  the  partners 
had  mutually  agreed  to  continue  as  partners  for  a  certain  period  ; 
unless  no  other  theory  so  well  satisfied  and  explained  all  the  facts 
of  the  case,  and  a  permission  to  either  partner  to  dissolve  at  pleas- 
ure would  work  great  mischief.  Then,  perhaps,  equity  might 
prefer  to  decide  that  the  parties  had  agreed  to  remain  together, 
and  therefore  should  not  part,  rather  than  to  say  that  one  of  them 
should  not  exercise  his  right  to  dissolve  the  firm,  because  he  would 
thereby  inflict  an  injury.  {I.)  But  if  one  of  several  partnei's  agrees 
with  a  stranger  for  a  sub-partnership,  it  is  not  to  be  implied, 
merely  from  the  absence  of  any  agreement  to  the  contrary,  that 
the  duration  of  the  sub-partnership  is  to  be  coextensive  with  the 
original  partnership,  (j) 

§  283.  Partnership  for  Temporary  Purpose.  —  Partnerships  are 
sometimes  formed  for  a  single  advcntui'c  or  enterprise.  Then, 
they  terminate  when  that  enterprise  is  brought  to  a  close ;  (^)  for 
the  articles  of  agreement  which  limit  the  partnership  to  that 
adventure  imply  that  it  ceases  when  that  ceases ;  but,  for  the  pur- 
pose of  winding  up  those  affairs,  it  continues  until  all  past  trans- 
actions are  closed.  (/)  But  such  a  partnership  may  continue,  by 
express  agreement,  or  by  the  partners  going  on  to  act  as  partners 
in  other  transactions ;  and  this  would  not  be  considered  as  a  new 

(A)  Featherstonhaugh  y.  Fenwick,  17  until  an  act  of  Pailiaraent  should  he  had. 
Ves.  298,  307.  But  see  Potter  v.  Gray,  1  The  Vice-Chancellor  said  :  "  It  is  my 
R.  I.  430.  The  mere  fact  that  a  firm  has  opinion  that  they  could  not  dissolve  until 
incurred  debts,  and  charged  its  assets  for  July,  1838  ;  and,  if  so,  then,  as  in  an 
their  payment,  is  no  evidence  of  an  agree-  ordinary  partnership,  they  could  not  do  it 
nientthat  the  firm  shall  continue  until  its  without  notice."  This  point  is  not  men- 
debts  are  paid.  See  King  ;;  The  Accumu-  tioned  in  the  report  of  the  case  in  9  Sim. 
lative  Assurance  Co.,  3  C.  B.  n.  s.  151.  193.      See  Reade  v.  Bentley,  3  Kay  &   J. 

{i)  In  Wheeler  v.   Van    Wart,  2   Jur.  271,   4   Kay  &  J.  65  ;  Potter  v.   Gray,    1 

252,  the  deed  of  settlement  constituting  a  R.  I.  430. 

company  contained  no  clause  limiting  the  {j  )  Frost  v.  Moulton,  21  Beav.  596. 

duration  of  the  partnership  ;  but   it  pro-  {k)  Pothier,  Contrat  de  Soc.  Xo.  140- 

vided    that    certain    persons    should    be  143. 
appointed   directors  until  July,  1838,  or  (/)  Petrikin  v.  Collier,  1  Barr,  247. 


374  THE    LAW    OF    PARTNERSHIP.  [CH.    XII. 

and  distinct  partnership,  but  as  a  continuation  of  the  original  one, 
and  a  continuation  of  the  original  terms,  unless  new  parties  came 
in,  or  it  could  be  shown,  or  inferred  from  circumstances,  that  the 
terms  were  varied. 

So,  too,  if  the  partnership  were  formed  for  dealing  with  a  sub- 
ject-matter certain  to  expire  at  a  certain  time,  or  even  to  expire 
at  any  time,  it  must  be  understood  as  providing  that  the  partner- 
ship shall  then  expire,  xis,  if  for  traffic  with  a  certain  patent  or 
copyright,  which  had  a  definite  number  of  years  to  run.  We 
apprehend,  that,  if  such  patent  or  copyright  were  renewed  under 
the  general  law,  the  partnership  would  still  continue.  But,  if  it 
were  renewed  only  by  special  statute  or  grant,  a  continuance  of 
the  partnership  would  require  a  new  agreement,  (m) 

§  284.  Dissolution  by  Will  of  all  the  Partners.  —  It  is  obvious 
and  certain  that  the  contract  of  partnership  is  rescindable  by  all 
who  are  parties  to  it,  at  their  own  pleasure,  (w)^  But  a  majority 
of  the  partners  may  not  exclude  one  of  the  partners  from  the 
firm  without  sufficient  cause.  It  has  been  held  not  a  sufficient 
cause,  that  he  paid  into  the  capital  a  part  only  of  what  he  agreed 
to  contribute,  if  that  part  had  been  accepted,  and  used  in  the  busi- 
ness of  the  firm.  (w>i) 

A  technical  distinction,  still  mentioned  in  our  text-books,  that, 
if  the  contract  of  copartnership  is  under  seal,  it  cannot  be  revoked 
and  cancelled  excepting  under  seal,  has  never  had  any  force  in 
equity  ;  and  we  do  not  suppose  that  it  would  now  have  any  prac- 
tical effect  in  law.  (o) 

(in)  See  Wheeler  v.  Van  Wart,  9  Sim.  dissolution,  a  written  notice  was  put  in, 

193,  2  Jur.  252  ;  Reade  v.  Bentley,  4  Kay  signed  by  all   the  parties,    which   stated 

&  J.  656,  3  Kay  &  J.  271.  that  they  had  dissolved  the  partnership. 

[n)  See    Master     v.     Kirton,     3     Ves.  Lord  EUenborough  said  it  might  be  veiy 

274.  deserving  of  attention,  whether  a  partner- 

(nn)    Hartman    v.    Woehr,   -3    Green  ship  created  by  deed  could  be  dissolved  by 

(N.  J.),  383.  anything  short  of  a   deed;    but  here,  as 

(o)  This    point  was  raised   in   Waith-  against  the  party,  who  signed  the  notice, 

man  v.  Miles,  1  Stark.  181.    The  partner-  the   partnership  must   be  taken  to  have 

ship    deed  was   under  seal.     To  prove   a  been  dissolved  by  competent  means.  Same 

1  Dissolution  hy  Mutual  Consent.  —  By  unanimous  consent  of  the  partners ,  a 
partnership  may  be  dissolved  at  any  time,  though  the  term  has  not  expired.  Bank  of 
Montreal  v.  Page,  98  111.  109.  So  where  all  the  partners  join  in  an  assignment  of  tlie 
assets  for  the  benefit  of  creditors,  it  operates  as  a  dissolution.  AVells  v.  Ellis,  68  Cal. 
243,  9  Pac.  80  ;  but  see  Williston  v.  Camp,  9  Mont.  88,  22  Pac.  501.  So  the  firm  is 
dissolved  by  a  refusal  of  all  the  partners  to  proceed  with  the  business.  Ligare  v.  Pea- 
cock, 109  111.  94.  And  the  same  is  true  where  the  partners  wind  up  the  business  and 
divide  all  the  assets  among  themselves.  Piichardson  i-.  Gregory,  126  111.  166,  IS  N.  E. 
777  ;  Kennedy  v.  Porter,  109  X.  Y.  526,  17  N.  E.  426. 


§   286.]  OF   DISSOLUTION,  375 

Not  only  would  any  express  reniincialion  have  this  effect,  but  a 
general  consent  of  the  terminatitMi  of  the  partnership  would  be 
inferred  from  conduct  or  circumstances  not  otherwise  explicable ; 
as,  by  a  tacit  renunciation  and  sto})ping  of  business,  settlement  of 
the  debts  and  acc(junts,  converting  of  the  projiei'ty  into  money,  or 
division  of  it  among  the  i)artncrs,  sale  of  the  good-will,  or  the 
like.  (/>) 

§  285.  Dissolution  by  Incorporation.  —  It  has  been  questioned 
whether  the  incorporation  »f  the  partners,  lor  a  similar  business, 
would  amount  to  a  dissolution  by  consent.  This  has  not  unfre- 
quently  occurred  in  this  countiy,  where  successful  manufacturers 
or  mechanics  have  found  their  business  so  enlarged  that  it  was 
more  convenient  to  transact  it  under  the  forms  of  a  corporation. 
Via  should  say  that  this  fact  alone  would  not  necessarily  be  the 
dissolution  of  the  partnershij).  But  it  never  would  stand  alone. 
The  corporation  would  always  have  some  defined  relation  to  the 
former  partnershijt.  Either  it  would  be  a  substitute,  taking  all 
its  business  and  all  its  property,  leaving  it  nothing  to  hold,  noth- 
ing to  do,  and  nothing  to  be  ;  in  which  case  it  would  be  clear  that 
the  partnership  had  died  out ;  or  else  some  portion  of  the  business 
and  the  stock  would  be  left  for  the  firm,  and  some  use  made  of  it ; 
and  then  it  would  remain  for  these  purjtoscs.  (cy)^ 

§  286.    Effect  of  Dissolution  on  the  Interests  or  Rights  of  Partners. 

Some  general   results  follow   a   dissolution  of   j)artnersliij»,  or 

some  general  principles  apply  to  dissolution,  which  are  especially 
pertinent  to  dissolution  by  articles  or  by  consent,  and  we  will 
present  them  in  a  general  form  now  ;  reserving  the  modifications 

case  not   reported  so  fully,  4  Camp.  373.  11  Hare,  325  ;  Pereus  v.  Johnson,  3  Sm. 

In    Hutchinson   v.  Whitiiehl,  Hayes,  '/8,  &  G.  419. 

it  was  provided  that  the  partnership  should  (7)  See    Goddard    v.    Pratt,    16    Pick, 

be  dissolved  only  by  deed.     It  was  held  412;    The  Cape  Sable  Company's  Case,  3 

that  an  award  under  a  oubmission,   both  Bland,  674.     There  is  no  doubt  that  after 

under  seal,  dissolving  the  partnership,  was  the  incorporation  the  members  of  the  firm 

valid.      The  action  of  covenant  lies  for  a  are  liable  for  all  debts  previously  incurred., 

wrongful  dissolution.     Addams  0.  Tutton,  Haslett  v.  Wotherspoon,  2  Rich.  Eq.  395. 

39  Pa.  447.  But   if  the  new  corporation  assumes  all 

(p)  For  cases   bearing  on    such    ques-  debts  and  liabilities  of  the  old   firm,  and 

tions,   see  Heath  v.  Sansom,  4   B.  &  Ad.  the  creditors  assent  thereto,  they  cannot 

175  ;    Jetferys    v.    Smith,    3    Euss.    158  ;  on  the  failure  of  the  corporation  hold  the 

Johnson  v.  Evans,  7  M.  &  G.  240;  Haber-  former   members  of  the  firm.      Whitwell 

shon    V.  Blurton,    1    De   Gex    &   S.    121  ;  v.  Warner,  20  Vt.  425. 
Aspinall  v.  The  London  &  N.  W.  R.  Co., 

1  Where  it  was  provided  in  the  articles  that  the  firm  should  be  incorporated  as  soon 
as  might  be,  the  partnership  was  held  to  be  dissolved  as  soon  as  the  corporation  was 
formed.     Hennessy  v.  Griggs,  1  N.  Dak.  52,  44  N.  W.  1010. 


376  THE   LAW   OP   PARTNERSHIP.  [CH.  XII. 

in  tliem  caused  by  particular  methods  of  dissolution,  until  we 
sjiccially  consider  those  methods. 

In  the  first  place,  a  mere  dissolution  has  no  effect  whatever  on 
the  property  of  the  partners,  or  their  interest  in  the  joint  stock  or 
joint  rights,  or  their  power  over  old  or  existing  debts  due  to  them 
or  due  from  them  ;  excepting  always  that  they  have  all  entirely 
lost  the  power  of  acting  for  each  other,  or  binding  each  other,  any 
further  than  all  joint  debtors  or  joint  creditors  may  do.  Thus,  if 
we  suj)pose  a  dissolution  by  articles  or  consent,  and  no  s])ecial 
agreement  as  to  the  powers  or  acts  of  the  several  partners,  each 
one  has  a  perfect  right  to  require,  and  through  equity  compel, 
a  final  settlement  and  adjustment  of  all  questions  and  all  prop- 
erty ;  (r)  and  each  one  has  the  same  power  as  to  this,  and  all  the 
details  connected  with  it,  as  any  other.  So,  too,  each  partner  has 
as  much  right  to  any  particular  thing  or  things  as  any  other  ; 
and  all  the  others  have  as  much  right  as  he  has.  (s)i 

As  all  are  liable  for  the  debts,  so  any  one  may  make  a  payment 
of  any  or  all  the  debts,  and  charge  such  payment  to  the  partner- 
ship, without  any  express  authority  for  this.  (^)  Even  if  he  uses 
property  to  pay  the  debt  in  a  way  that  is  fraudulent  or  injurious 
to  his  former  partners,  and  must,  therefore,  respond  to  them  in 
account  or  as  damages  for  the  act ;  the  creditor  thus  paid,  pro- 
vided he  do  not  participate  in  the  wrong,  will  hold  his  payment, 
even  if  he  were  aware  of  the  dissolution,  (m) 

(r)  Ante,  %  206.  of    the' partnership,    and   has     the   same 

(s)   Munifonl  v.  McKay,  8  Wpnd.   440.  authority  to  deal  with  the  property  of  the 

See  Downs  v.  Jaekson,  33  111.  464,  on  the  partnership  for  partnership  purposes  as  he 

relative  mutual  liability  of  each  partner  had  during  the  continuance  of  the  partner- 

for  the  partnership  debts.      And  see  Rob-  ship.     Tliis  must  necessarily  be  so.     If  it 

bins  V.    Fuller,   24  N.  Y.  570 ;    Ward   v.  were  not,  at  the  instant  of  the  dissolution 

Tyler,  52  Pa.  393.      See,  on  the  relations  it  would   be   necessary  to   apply    to   this 

and  liabilities  of  partners  after  dissolution,  court  for  a  receiver  in  every  case,  although 

Chapman  v.  Thomas,  4  Keyes,  216.  the   ])artners  did   not   diH'er   on    any  one 

(/!)  Lyon   V.    Haines,  5  M.  &  G.  541  ;  item  in  the  account."    And  see  Darling  v. 

Smith  V.  Winter,  4  M.  &  W.  461  ;    But-  March,  22  Me.  184  ;    Eoots  v.  Welford,  4 

chart  V.  Dresser,  10  Hare,  453,  4  De  G.,  Munf.  215;  Woodford  v.  Downer,  13  Vt. 

M.  &   G.   542.     In  this  last  case,  it  was  522  ;  Union  Bank  v.  Hall,  1  Harper,  245  ; 

said  :     "Each  partner  has,  after  and  not-  Wood  v.  Braddick,  1  Taunt.  104. 
withstanding  the  dissolution,  full  author-  (u)  See   Butchart  v.  Dresser,  4  Russ. 

ity  to  receive  and  i)ay  money  on  account  430  ;  Lewis  v.  Reilly,  i  Q.  B.  349. 

^  Tf  after  dissolution  one  partner  makes  exclusive  use  of  the  assets,  he  must  account 
to  the  other  pai'tners  for  the  value  of  the  use.  Ligare  v.  Peacock,  109  111.  94.  So  if 
he  converts  the  as.sets  to  his  own  u.se  he  must  account  for  their  value.  King  v.  White, 
63  Vt.  158,  21  Atl.  535.  For  the  rule  in  case  of  dissolution  by  death,  see  post, 
§  346,  note. 


§  288.]  OF   DISSOLUTION.  877 

§  287.  Effect  of  Dissolution  on  Povrer  over  Firm  Debts.  — As  to 
the  debts  due  to  the  partnership,  any  one  partner  may  claim  and 
receive  them  for  the  partnership  ;  and  his  receipt  would  be  bind- 
ing on  the  partnership,  in  favor  of  an  innocent  debtor,  (w)  We 
should  apply  the  same  principle  to  any  method  of  payment. 
Thus,  if  the  partner  compromised  the  debt,  allowing  an  enormous 
discount  for  immediate  payment,  with  a  design  to  abscond  with 
the  money,  or  otherwise  defraud  the  other  partners,  we  should 
say,  as  matter  of  law,  that  an  entirely  innocent  debtor  would  still 
be  protected,  although  he  knew  of  the  dissolution,  (w)  But  we 
should  also  say,  that,  as  matter  of  fact,  any  such  circumstances 
would  strongly  aid  the  proof  of  dishonesty,  or  even  raise  a  pre- 
sumption of  it.  For  it  would  certainly  be  a  general  probability, 
that  a  debtor  of  a  partnership  which  he  knew  to  be  dissolved,  if 
he  found  one  of  tl>e  partners  so  anxious  to  settle  the  account  or 
anticipate  payment  as  to  consent  to  great  sacrifices,  would  infer 
that  mischief  might  be  intended,  and  at  least  be  sufficiently  warned 
to  put  him  upon  inquiry  as  to  the  honesty  and  validity  of  the  pro- 
posed transaction.  But,  we  repeat,  we  should  consider  this  a 
question  only  of  fact;  for  the  rule  of  law  must  be,  that  a  dissolu- 
tion without  especial  agreement  leaves  all  the  partners  on  equal 
ground,  and  gives  to  each  an  equal  power  of  settlement,  (x) 

Therefore  it  is  that  such  a  dissolution  is  rare.  Far  more  fre- 
quently provision  is  made,  either  in  the  original  articles  or  in  an 
agreement  at  the  time  of  dissolution,  as  to  the  manner  of  settle- 
ment;  that  is,  who  shall  collect  and  jiay  the  debts,  adjust  and  set- 
tle the  accounts,  and  (to  use  the  common  phrase)  wind  up  the 
concern.  And  such  an  agreement  certainly  affects  all  the  part- 
ners and  all  third  parties  who  have  notice  or  knowledge  of  it. 

§  288.  "Winding  up  the  Concern.  —  The  general  rule  we  take  to 
be  this :  The  concerns  of  the  partnership  must  be  wound  up  in 
some  way  and  by  some  persons.  The  partners  may  provide  for 
this  at  their  own  pleasure.  If  they  do  not  provide  for  it,  the  law 
provides  for  it  in  the  only  possible  way  ;  and  that  is  by  continu- 

(v)  See  cases  cited,  mite,  note  (/).   And  that  after  the  dissolution  of  a  firm,  one  or 

see  Elliott  v.  Brown,  3  ,S\vanst.   489,  n. ;  more  of  the  partners  may  make  a  com- 

Hawkins  v.  Hawkins,  4  Jur.  N.   s.  1044  ;  promise   with  any  creditor  of   the    firm, 

Benhara  v.  Gray,  5  C.  B.  138  ;  Waithman  which  compromise  shall  only  operate  to 

V.    Jliles,    4    Camp.     373 ;    Colnaghi    v.  discharge   the    debtor  making  the   same. 

Bluck,  8   C.  &  P.  464,  as  to  other  rights  But  such  compromise  shall  not   operate  to 

of  partners  after  dissolution.  prevent   the  other  copartners  from   calling 

(w)   Union    Bank    v.  Hall,    1    Harper,  on  the  partner  making  the  same  for  his 

245.      In    New   York,    it   is   enacted   by  ratable  portion  of  such  debt, 
statute    passed   April    18,   1838,    ch.  257,  (x)  See  cases  in  previous  notes. 


378  THE    LAW    OF    PARTNERSHIP.  [CH.    XII 

iiig  the  partnership,  with  its  incidents  of  interest,  power,  and 
obligiition,  for  the  puri)ose  of  thus  winding  up,  and  therefore  as 
far  as  is  necessary  for  thus  winding  up,  and  no  further,  {y)  And 
this  power  of  a  former  partner  has  been  held  to  pass  to  his  admin- 
istrator at  his  death,  {yy) 

It  follows  that  every  i)artner  has  full  authority  to  do  anything 
the  want  of  which  would  prevent  this  winding  up,  or  leave  it  in- 
complete ;  and  that  he  can  do  nothing  which  is  not  indispensable 
for  this  })urpose.  We  say  indis[»ensablc,  in  exclusion  of  what  is 
merely  convenient,  or  even  desirable  and  expedient,  unless  it  can 
be  considered  necessary  for  the  proper  settlement  of  the  affairs  of 
the  firm.  And  even  a  settlement  by  a  partner  after  dissolution, 
in  fraud  of  the  firm,  would  be  valid  in  favor  of  a  third  party  who 
was  wholly  innocent,  (^yyy^ 

§  289.  Settling  or  Liquidating  Partner.  —  If  the  partners  agree, 
as  they  generally  do,  that  one  or  more  of  them  shall  wind  up  the 
business,  while  the  others  have  nothing  to  do  with  it,  this  arrange- 
ment confines  the  power  to  those  thus  designated ;  but  does  not 
enlarge  this  power  in  them,  although  it  takes  it  away  from  the 
others.^  It  seems,  however,  to  be  well  settled,  that  an  authority 
given  to  one  partner  "  to  close  all  business  transactions  of  the  late 
firm  ;  "  (2)  "  to  settle  up  the  business  of  the  firm ; "  (a)  "  to  settle 

(y)  Ex  jMTtc  Williams,  11  Ves.  5  ;  Pea-  (yy)  Mutual  Institution   v.  Eusleii,  37 

cock  V.  Peacock,  16  Ves.  57  ;  Crawsliay  v.  Mo.  453. 

Collins,  15  Ves.  227,  2  Russ.  342  :  Wil-  {yyy)  Thrall  v.  Seward,  37  Vt.  573. 
son  V.  Greenwood,  1  Swanst.  480  ;  Craw-  (z)  Palmer  v.  Dodge,  4  Ohio  St.  21. 
shay  V.  Maule,  1  Swanst.  507  ;  Butchart  (a)  Parker  v.  Cousins,  2  Gratt.  372  ; 
V.  Dresser,  4  De  G.,  M.  k  G.  542  ;  Payne  Long  v.  Story,  10  Mo.  636  ;  Martin  r. 
V.  Hornby,  25  Beav.  280  ;  Chajipell  v.  Walton,  1  McCord,  16  ;  Parker  v.  Mac- 
Allen,  38  Miss.  213  ;  Thursby  v.  Lidger-  omber,  18  Pick.  505  ;  Fellows  v.  Wyman, 
wood,  69  N.  Y.  198.  33  N.  H.  351. 

1  Liquidating  Partners.  —  Upon  dissolution  it  is  competent  for  the  partners  to 
agree  on  one  partner  as  special  agent  for  winding  up  the  affairs  ;  one  who  thereafter 
deals  with  another  partner  in  liquidation  matters  with  notice  of  this  appointment  can 
get  no  benefit  thereby.  Hilton  v.  Vanderbilt,  82  N.  Y.  591.  No  express  agreement 
upon  one  partner  as  liquidating  partner  need  be  proved  ;  one  may  be  shown  to  be  the 
lii]uidating  partner  by  evidence  of  circumstances,  as  that  he  exercises  the  functions  of 
such  otiice  with  the  tacit  consent  of  the  other  partners.  Fulton  v.  Central  Bank,  92 
Pa.  112  ;  Siegfried  v.  Ludwig,  102  Pa.  547  ;  Campbell  v.  Floyd  (Pa.),  25  Atl.  1033. 
"When  neither  partner  is  created  a  liquidating  partner,  either  may  so  act.  Hawn  v. 
Land  &  Water  Co.,  74  Cal.  418,  16  Pac.  196. 

In  some  cases  of  dissolution,  one  partner  has  the  right  to  liquidate  without  special 
agreement  or  appointment.  Thus  upon  dissolution  by  bankruptcy  the  sole  solvent 
])artner  has  a  right  to  take  the  assets  and  settle  the  affairs  of  the  partnership.  Vetter- 
k'in  V.  Barnes,  6  F.  R.  693  ;  King  v.  Leighton,  100  N.  Y.  386,  3  N.  E.  594.  It  is, 
however,  a  right  which  he  may  waive,  as  by  permitting  the  assignee  of  the  bankrupt 
partner  to  administer  the  assets.     Vetterlein  v.  Barnes,  6  F.  R.  693. 


§  290.]  OF   DISSOLUTION.  379 

all  demands  in  favor  of  or  against  the  firm;"  (5)  "to  settle  busi- 
ness of  the  firm,  and  for  that  purpose  to  use  their  name ;"((?) 
"  to  settle  business  of  the  firm  and  sign  its  name  for  that  pur- 
pose ;"  (d)  "  to  use  the  name  of  the  firm  in  liquidation,  only  of 
past  business,"  (e)  —  confers  no  more  power  than  the  partner 
would  have  by  the  general  pi'inciples  of  the  law  of  partnership. 
In  one  case,  however,  the  court  were  of  the  opinion  that  the 
authority  given  to  use  the  partnership  name  conferred  a  greater 
power  than  would  have  otherwise  existed,  and  held  that  it  was  for 
the  jury  to  find,  from  the  course  of  trade,  and  the  usage  and  cus- 
tom of  merchants,  as  well  as  from  the  notice  itself,  whether  this 
power  extended  to  the  renewal  of  a  note  which  had  been  dis- 
counted at  a  bank  previous  to  the  dissolution.  (/)  When  one 
partner  takes  all  the  assets,  for  the  purpose  of  settlement,  equity 
may  require  him  to  indemnify  the  other  partners  against  the 
liabilities  of  the  firm,  (^ff)  If  a  partner,  under  such  an  authority, 
receives  a  note,  in  payment  of  a  debt  due  to  the  firm,  payable  to 
bearer,  it  seems  that  the  legal  title  to  such  note  will  vest  in  such 
partner  alone ;  and,  therefore,  he  will  be  able  to  give  a  good  title 
to  it  by  delivery.  {(/) 

§  290.  Power  of  Settling  Partner  to  Contract.  —  The  questions 
which  refer  to  this  rule  have  arisen  principally  where  any  former 
jiartner,  and  especially  where  a  pai'tner  authorized  by  the  rest  to 
settle  the  concern,  has  issued  new  paper,  or  indeed  entered  into 
any  new  contract.  This  may  be  not  only  honest,  but  in  the  high- 
est degree  advantageous,  to  all  concerned.  Thus,  a  creditor  may 
be  willing  to  renew  a  note  or  bill,  or  take  a  note  or  bill  for  a 
former  purchase  on  a  credit  which  has  expired ;  and,  unless  lie 
can  have  this  note  or  bill  in  the  name  of  the  firm,  he  insists  upon 
all  his  money,  which  can  neither  be  refused  nor  paid  without  dis- 
aster. It  is  an  unquestioned  principle  of  law,  that  after  a  dissolu- 
tion the  authority  of  a  former  partner  to  bind  the  others  is  gone, 

(b)  Lockwood  v.  Conistock,  4  Mc-  firm,  by  an  imlorsement  in  blank,  in  pay- 
Lean,  383.  ment  of   a   debt,  it  was  held,  that  such 

(c)  National  Bank  v.  Norton,  1  Hill,  note,  being  payable  to  bearer,  might  be 
572.  legally  transferred   to  a  third  person   by 

(fZ)  Hamilton  v.  Seaman,  1  Ind.  185.  another  partner,   who  was   authorized  to 

(e)  Martin  v.  Kirk,  2  Humph.  529.  settle  the  concerns  of  the  partnership.   On 

(/)  Alyers  v.  Huggins,  1  Strobh.  473.  a  settlement  of  partnership  affairs,  if  it  is 

(ff)  Cook  V.  Jenkins,  35  Ga.  113.  agreed   that   one    of    the   partners    shall 

ig)  See   the  language  of  Shaw,  C.  J.,  collect   a    note    and    accounts,     for    the 

in    Parker   v.    Maconiber,    18    Pick.   505,  benefit  of   both,  it  will  be  presumed  that 

where   the  individual  note  of  a  partner,  the  money,  as   fast   as   received,  shall    be 

made  after  the  dissolution  of  the  partner-  divided  between  the  parties.     Metcalf  v 

ship,  was  transferred  by  the  holder  to  the  Fonts,  27  111.  110. 


380  THE    LAW    OF    PARTNERSHIP.  [CH.    XII, 

except  as  to  the  settlement  of  the  estate  of  the  old  partnership ; 
and  it  is  usually  stated  that  he  has  no  power  to  make  any  new 
contracts.^  It  is  obvious,  however,  that  a  strict  construction  of 
this  rule  might  prevent  the  partner  whose  duty  it  is  to  settle  up 
the  estate  from  accomplishing  this  object  in  the  most  judicious 
manner.  So  far  as  the  question  is  still  an  open  one,  we  should 
consider  the  true  rule  to  be,  that  no  contract  can  be  made  by  one 
partner,  after  dissolution,  by  which  the  others  will  be  bound, 
unless  such  contract  is  necessary  for  settling  up  the  business  of 
the  concern  in  the  most  judicious  manner. 

§  291.  Other  Powers  of  Settling  Partner.  — The  duty  of  settling 
partners  is  similar  in  many  respects  to  that  of  trustees  and 
agents  ;  (/;)  and  they  should,  in  settling  up  the  affairs  of  the  old 
firm,  have  all  the  rights  which  agents  usually  have  by  the  usages 
of  the  l)usiness  in  which  the  old  firm  was  engaged.  In  the  lan- 
guage of  the  Supreme  Court  of  Maine,  "  The  dissolution  operates 
as  a  revocation  of  all  authority  for  making  new  contracts.  It 
does  not  revoke  the  authority  to  arrange,  liquidate,  settle,  and 
pay  those  before  created."  (i)  Thus,  in  a  case  where  a  bill  of 
exchange  was  drawn  in  blank  by  one  partner,  to  the  order  of  the 
firm,  and  indorsed  before  the  dissolution  of  the  firm,  it  was  held, 
that  it  might  after  that  event  be  filled  up  and  negotiated,  (j/' ) 
And,  after  dissolution,  one  partner  may  waive  demand  and  notice, 
this  being  considered  as  merely  a  modification  of  an  existing 
liability  ;( A:)  he  may  also,  it  has  been  held,  lawfully  assign  to  a 
creditor  of  the  firm  a  demand  due  to  the  partnershij)  ;  (/)  or 
acknowledge  in  the  partnership  name,  after  dissolution,  a  bal- 
ance due  from  the  partnership,  (m)  If  a  note  is  signed  by  a 
firm  payable  to  the  order  of  one  of  its  members,  this  person 
may  indorse  the  note  after  the  dissolution  of  the  firm,  so  as  to 
bind  it.  (n) 

(h)  Washburn  v.  Goodman,   17  Pick,  tlie   dissolution.     Cunningham  v.  Bragg, 

519.     See   Wilson    v.   Stilwell,    14  Ohio,  37  Ala.    436.     See  also  Gannett   v.   Cun- 

464  ;    Parker   v.   Phillips,    2  Cush.    175.  ningham,  34  Me.  56. 

See  also  Caldwell  v.   Stileman,  1  P»awle,  (j )  Usher   v.   Daunce}',   4    Camp.    97  ; 

212  ;  Beak  v.  Beak,  3  Swanst.  627.  Lewis  v.  Reilly,  1  Q.  B.  349.     See  Myers 

(i)  Darling    v.    March,    22    Me.    184.  v.  Standart,  li  Ohio  St.  29. 
But  the  power  to  give  a  note,  in  renewal  (/r)  Darling  v.  March,  22  Me.  184. 

of  one  given  before  dissolution,  is  denied  {I)   Milliken  v.  Lnring,  37  Me.  408. 

in  Lumberman's  Bank  v.   Pratt,  51  Me.  (m)  Ide  v.  Ingrahani,  5  Gray,  106. 

563.     The   same   rule   was  held   where  a  {n)  Temple  v.  Seaver,  11  Cush.  314. 

note  was  given  for  a  debt  created  before 

^  A  continuing  partner  can  make  no  new  contract  whi(di  shall  bind  the  firm.  Ante 
§  131  et  seq.;  Goodspeed  v.  Wiard  Plow  Co.,  45  Mich.  322;  Gardner  v.  Conn,  34  Oh. 
St.  187  ;  Batik  v.  Green,  40  Oh.  St.  431  ;  Lee  v.  Stowe,  57  Tex.  444. 


§  292.] 


OP    DISSOLUTION. 


381 


111  Pennsylvania,  the  courts  have  fully  adopted  the  principle 
that  as  to  past  transactions  the  partnership  continues  until 
they  are  settled.  Thus,  it  is  held  that  after  dissolution  a  partner 
may  borrow  money  to  pay  partnership  debts, (o)  and  may  renew 
the  notes  of  the  firm  ;  {]?)  or  give  notes  in  the  firm  name,  in  pay- 
ment of  fii'in  debts.  (7) 

§  292.  Power  to  deal  with  Negotiable  Paper.  —  There  are,  how- 
ever, other  authorities,  which  construe  the  rule  that  a  jortner 
cannot  make  a  new  contract  after  dissolution  very  strictly,  and 
hold  that  the  power  of  a  surviving  partner  not  only  does  not  extend 
to  the  giving  of  a  note,  (r)  or  accepting  of  a  bill,  (.s-)  in  the  firm 
name,  after  dissolution,  for  a  pre-existing  debt  of  the  firm,  even 
though  it  be  antedated  so  as  to  bear  date  before  the  dissolu- 
tion, (Q  but  also  that  he  cannot  renew  bills  or  notes  given  by  the 
partnership  before  dissolution,  so  as  to  bind  his  former  copart- 
ners, (m)  or  indorse  notes  given  to  the  firm  before  dissolution,  so 
as  to  vest  the  title  in  the  indorsee,  (v) 

Nor,  it  has  been  held,  can  he  indorse  notes  belonging  to  the 
firm  at  the  time  of  the  dissolution,  so  as  either  to  render  the 
other  partners  liable  on  his  indorsement,  or  to  pass  a  valid  title 
to  the  notes,  {iv')     It  has  even  been  doubted  whether  a  note  in- 


(0)  Estate  of  Davis  &  Desauque,  5 
Whait.  530. 

(p)  III.  ;  Brown  r.  Clark,  14  Pa.  469. 

(q)   liobinson  v.  Taylor,  4  Barr,  242. 

(/•)  Lockwood  V.  Conistock,  3  lleLean, 
383  ;  Bank  of  Port  Gibson  i'.  Baugh.  9 
Sm.  &  M.  290;  Hamilton  v.  Seaman,  1 
Inil.  185;  Perrin  v.  Keene,  19  Me.  355  ; 
Lusk  V.  Smith,  8  Barb.  570.  [See  ante, 
§  131.]  In  Mitchell  v.  Ostrom,  2  Hill, 
520,  the  note  in  suit  was  signeil,  "Late 
firm  M.,  J.,  E.,  &  Co."  The  settlement 
of  a  book  account,  by  a  note  on  time, 
given  in  the  name  of  the  firm,  by  the 
remaining  partner  authorized  to  liquidate, 
does  not  bind  the  retiring  jiartners.  They 
stand  to  the  remaining  partner  in  the  re- 
lation of  sureties;  and  the  latter  cannot 
bind  them  to  any  new  contracts,  im])0sing 
adilitional  burdens.  Smith  v.  Sheldon, 
35  Mich.  42. 

(s)  Tombeekbee  Bank  v.  Dumell,  5 
Mason,  56. 

(t)  Wrightson  v.  Pnllan,  1  Stark.  375  ; 
Lansing  v.  Gaine,  2  Johns.  300. 

in)  Palmer  v.  Dodge,  4  Ohio  St.  21  ; 
National  Bank  v.    Norton,    1   Hill,   572 ; 


Parker  v.  Cousins,  2  Gratt.  372  ;  ^Martin 
V.  Kirk,  2  Humph.  529;  Long  v.  Story, 
10  Mo.  636  ;  Stone  v.  Chaniberlin,  20 
Ga.  259.  In  Bank  of  South  Carolina  v. 
Humphreys,  1  McCord,  388,  the  firm  dur- 
ing the  continuance  of  the  partnership, 
had  written  a  letter  to  the  holder  of  a 
note  against  them,  requesting  permission 
to  renew  it,  until  the  expiration  of  a  cer- 
tain time,  during  which  time  a  renewal 
was  given  by  one  partner,  hut  subsequent 
to  the  dissolution.  It  was  held  that  the 
firm  was  not  bound.  See  Van  Valken- 
burgh  V.  Bradley,  2  Iowa,  108,  overrul- 
ing Kemp  V.  Coffin,  3  Greene  (la.),  190. 
And  see  Richardson  v.  Moies,  31  Mo.  430. 

{v)  Sanford  v.  Mickles,  4  Johns.  224  ; 
Fellows  V.  Wyman,  33  N.  H.  351.  See 
also  Geortner  v.  Trustees,  &c.,  2  Barb. 
625  ;  White  v.  Tudor,  24  Tex.  639  ; 
Cavitt  V.  James,  39  Tex.  189.  See  §  291, 
note  (n). 

(iv)  Abel  f.  Sutton,  4  E.sp.  108;  San- 
ford V.  Mickles,  4  Johns.  224  ;  Parker  v. 
Macomber,  18  Pick.  505  ;  Humphries  v. 
Chastain,  5  Ga.  166.  See  Fowle  v.  Har- 
rinicton,  1  Cush.  146. 


382  THE    LAW    OF    PARTNERSHIP.  [CH.    XII. 

dorscd  before  dissolution,  but  nofrotiated  afterwards,  will  bind  the 
firm  ;  (.r)  but,  if  negotiated  in  good  faith  for  the  purposes  for  which 
it  was  indorsed,  we  are  inclined  to  think  it  would,  although  the 
contrary  doctrine  has  been  held,  {y) 

§  293.  Settling  Partner  acting  with  Express  Authority.  —  One 
partner,  after  dissolution,  may,  of  course,  bind  his  copartner  by 
any  of  the  above  acts,  if  he  have  an  express  authority  for  that 
purpose.  And  such  authority  may  be  given  by  parol,  although 
the  terms  upon  which  the  i)artnership  was  dissolved  should  be  in 
writing.  Thus,  where  a  retired  partner  stated  that  he  left  the 
assets  and  securities  of  the  firm  in  the  hands  of  the  continuing 
})artner,  for  the  purpose  of  winding  up  the  concern,  and  that  he 
had  no  objection  to  his  using  the  partnership  name,  it  was  held 
that  the  jury  were  justified  in  finding  that  the  continuing  partner 
had  authority  to  indorse  promissory  notes  so  left  in  his  hands,  in 
the  partnership  name.  (2)  So  an  authority  by  parol  to  continu- 
ing partners  to  sell  a  negotiable  note  made  to  the  firm  before 
dissolution,  will  authorize  an  indorsement  of  such  note,  "  without 
recourse,"  in  the  name  of  the  firm,  (a)  This  authority  may  also 
be  given  by  implication ;  as  where  one  partner  receives  a  note  as 
his  portion  of  the  property  of  the  firm.  In  such  case,  he  may 
indorse  it  without  recourse;  (6)  but  without  authority,  either 
express  or  implied,  it  has  been  held  that  such  power  does  not 
exist,  (c)  So  it  has  been  said,  that  the  settling  partner's  transfer 
of  a  bond  would  be  good,  under  his  general  authority,  {d) 

§  294.  Po-wer  to  do  Acts  Necessary  for  Winding  up,  —  And  it 
is  certain,  as  has  been  already  said,  that  for  all  ordinary  transac- 
tions, the  power  of  each  partner  must  be  equal  to  that  of  any 
other  partner,  unless  the  power  of  acting  in  behalf  of  the  firm  is 
confined  by  agreement  to  one  ;  and  then  this  power  of  this  one 
must  be  complete  for  the  purpose  of  winding  up,  unless  expressly 
limited.  Therefore,  the  settling  partner  may  pay  and  receive 
payment,  (e)  may  sell  goods  consigned  to  the  firm  before  dissolu- 

{x)  Per    Lord    Kenyoii,    in    Abel    v.  in  which  judgment  had  heen  obtained  by 

Sutton,  4  Esp.  108.  all  the  partners  before  the  dissolution,  it 

((/)   In    Glasscock    v.   Smith,   25   Ala.  was  held,  that  the  remaining  partners  had 

474.     The  question  was  raised,  but   not  authority  under  that  power  to  give  to  the 

decided,  in  Mechanics'  Bank  v.  Hildreth,  defendant  a  note  for  the  payment  of  the 

9  Cush.  359.  sixpences,  under  the  Lords'  Act,  on  behalf 

(:)  Smith  v.  Winter,  4  M.  &  "VV.   454.  of  themselves  and  the  retiring  partner. 
In  Burton  v.  Issitt,  5  B.  &  Aid.  267,  by  a  (a)  Yale  v.  Eames,  1  Met.  486. 

deed  of  dissolution  of  partnership,  a  power  (h)  Waite  v.  Foster,  33  Me.  424. 

was  reserved  to  the  remaining  partners  to  (c)  Fellows  v.  Wyman,  33  N.  H.  351. 

use  the  name  of  the  retiring  jiartner  in  (d)  Morse  v.  Bellows,  6  N.  H.  568. 

the  prosecution  of  all  suits.     In  an  action  (e)  Butchart  v.  Dresser,  10  Hare,  453, 


§  295.]  OF  DISSOLUTION.  383 

tion,  (/)  and  may  compromise  debts  in  any  way  which  does  not 
indicate  fraud,  {g)  ^  So,  too,  he  may  midoubtedly  exchange 
goods,  but  always  for  the  purpose  of  winding  up  the  old  concern. 
He  has  power  to  draw  a  bill  upon  a  debtor  of  the  firm,  and,  on 
its  being  accepted,  to  sue  him  in  the  firm  name  ;  {h)  to  release  a 
debt  due  to  the  firm ;  {i)  to  pledge  shares  of  stock  which  the  firm 
had  contracted  to  buy,  but  had  not  paid  for,  to  raise  the  money 
to  pay  for  the  shares ;  (^  )  to  collect,  compound,  and  release  debts 
of  the  firm.  (Jc)  But,  anything  done  by  him,  however  innocent 
and  projjcr  in  itself,  would  not  be  within  the  scope  of  his  au- 
thority, if  it  was  done  for  the  purpose  of  continuing  the  business 
of  the  firm,  or  o])ening  it  anew,  instead  of  winding  it  up.  {I) 

It  may  be  doul)ted,  too,  whether  he  can,  without  especial 
authority,  buy  goods  so  as  to  bind  the  other  partners  for  the 
purchase.  It  is  not  uncommon,  in  practice,  for  a  settling  partner 
to  make  small  purchases,  in  order  to  complete  an  assortment  of 
goods  on  hand,  and  promote  the  sale  thereof.  If  he  does  this 
with  cash,  in  good  faith,  the  seller  certainly  holds  the  money, 
and  we  should  have  no  doubt  that  he  might  credit  himself  with 
such  payments  in  his  account.  But,  if  he  buys  on  credit,  we  do 
not  think  that  the  other  ))artners  would  be  held,  unless  they  dis- 
tinctly authorize  the  purchase. (m) 

§  "295.  Power  of  Court  of  Equity  over  Settlement.  —  All  the 
partners,  and  each  partner,  have  the  right  of  requiring  that  the 
settlement  should  be  made  with  reasonable  promptitude,  and  with 
entire  respect  for  the  rights  and  interests  of  each  one.  And,  of 
course,  no  partner  can  have  any  rights  inconsistent  with  these 
rights  of  his  copartners,  {n)  And  if  anything  is  done  which 
should  not  be  done,  or  left  undone  which  should  be  done,  a  court 

4  De  G.  M.  &  G.  542.     See  also  Paiker  i'.  (/.)  Huntington    v.    Potter,    32    Barb. 

Phillips,  2  Cush.  175,  178  ;  Washburn  v.  300. 

Goodman,    17    Pick.     519,    536  ;    Fereira  (J)  'Wilson    v.    Greenwood,   1    Swanst. 

V.    Sayres,    5    W.    &    S.     210 ;    Beak    v.  481  ;  Crawshay  v.  ilaule,  1  Swanst.  507  ; 

Beak,  3  Swanst.  627.  Ex  parte  Williams,  11  Ves.  3. 

(/)  Herberton   v.  Jepherson,  10  Barr,         (m)  See  Minnit  v.  Whinnery,  5  Bro.  P. 

124.  C.    489,  2  Bro.  P.  C.   (Dublin  ed. )  323, 

('/)  Bass  V.  Taylor,  34  Miss.  342.  16   A'in.    Abr.    244  ;  Vice   v.   Fleming,    1 

(h)  King  V.  Smith,  4  C.  «&  P.  108.  Younge    &  J.    227  ;   Ex  prn-te  Harris,    1 

(/)    Napier  v.   McLeod,   9  Wend.  120.  JIadd.  583. 

{j)  Hutchart  v.  Dresser,  10  Hare,  453,  {n)  See  Lees  v.  Laforest,  14  Beav.  2.')0  ; 

4  De  G.  M.  &  G.  542.     [But  one  partner  Cleggy.  Fishwick,  1  ilc.  &  G.  294  ;  Perens 

after  dissolution  cannot  usually  pledge  the  v-  .Tohnson,  3  Sm.  &  G.  419  ;  Clements  v. 

assets  even    to  pay  the    debts.      Roots  v.  Hall,  2  De  G.  &  J.  173. 
Mason  City  Salt  Co.,  27  W.  Ya.  483.] 

1  Buxton  V.  Edwards,  134  Ma.ss.  567  ;  Conrad  v.  Buck,  21  W.  Ya.  396. 


384  THE    LAW    OB^    PARTNERSHIP.  [CH.    XII. 

of  equity  will  intci't'ere.  There  is,  perhaps,  no  class  of  questions 
or  of  cases  in  which  equity  so  readily  or  so  usefully  exerts  its 
power  as  in  those  which  arise  under  dissolution  of  ])artnership. 
The  guiding  principle  in  its  action  is,  to  preserve  equally  the 
rights  of  all  parties,  (o)  Hence,  no  partner  can  make  any  use 
of  the  projjcrty  for  his  own  particular  benefit;  but  he  will  be  held 
chargeable  for  all  the  profits  and  advantages  which  may  accrue 
from  such  use,  either  as  trustee,  or  in  some  other  adequate 
way.  (^j))  And, as  a  general  rule,  each  partner  has  an  equal  right 
to  the  i)ossession  of  the  partnership  property.  If  the  firm  is  dis- 
solved, and  the  partners  cannot  agree  as  to  the  division  of  it,  a  court 
of  equity  will  appoint  a  receiver  to  collect  and  apply  the  effects,  {q) 
Nor  can  any  i)artner  claim  to  himself  any  especial  commission 
or  payment  for  his  services  in  settling,  unless  there  be  an  agree- 
ment to  that  effect ;  the  reason  which  forbids  this  after  dissolu- 
tion being  the  same  which  forbids  such  claim  for  services  in 
the  ordinary  partnership  business ;  namely,  the  entire  equality 
of  the  partners,  unless  they  agree  uj)on  some  inequality,  (r)  So 
too,  all  compositions  or  compromises  of  debts,  all  settlements, 
and  all  the  transactions  which  follow  dissolution,  must  be  for  the 
common  and  eipial  benefit  of  all  the  partners,  (.s) 

§  296.  Effect  of  Dissolution  upon  Third  Parties.  —  No  dissolu- 
tion of  any  kind  affects  the  rights  of  third  parties,  who  have  had 
dealings  with  the  partnership,  without  their  consent.  This  is  a 
universal  rule,  without  any  exception  whatever,  {t)     Undoubtedly, 

(o)  Bennett's  Case,  18  Beav.  339,  5  De  v.    Lashbrooke,    8    Dana,    219  ;    Paine   v. 

G.  M.  &  G.   284  ;  Benson  v.  Heathoin,   1  Thatcher,  25    "Wend.    450  ;    Andeison    r. 

Younge  &  C.   326  ;   York  &  North  Mid-  Taylor,  3  Led.  420  ;  Reyl>old  v.  Dodd,   1 

land  R.   Co.   v.    Hudson,   16    Beav.   485;  Harr.    (Del.)    401  ;    Newland    v.   Tate,    3 

Maxwell    v.    The    Port   Tennant   Co.,  24  Ired.  Eq.  232  ;  Phillips  v.  Turner,  2  Dev. 

Beav.     495 ;    Richardson    v.    Larpent,     2  &  B.    Eq.    123  ;  Donglierty  v.  Van  Nos- 

Younge  &  C.   507  ;  Harris  v.  The  North  trand,    1    Hoff.    Ch.    68  ;    Washburn    v. 

Devon  R.  Co.,  20  Beav.  384.  Goodman,    17   Pick.  519  ;  Hite    v.   Hite, 

{p)  Kclley  V.  Greeuleaf,  3  Story  C.  C.  1  B.  Mon.  179.    But  see  Bradley  v.  Cliaiii- 

9:5,    101  ;   Featherstonhnugh    v.   Fenwick,  berlin,  16  Vt.  613;  Wilby  v.  Phinney,  15 

17  Ves.  298;   Pothier,  Contr.  de  Soc.  ch.  Mass.  120. 

8,  §  4,  art.  150.     See  also  Leach  v.  Leach,  (,9)  See  Porter  v.  Wheeler,  37  Vt.  281  ; 

18  Pick.  68;  Dougherty  w.  Van  Nostrand,     Beak    v.   Beak,   2  Swanst.   627;    Page  v. 
1  Hoff.  Ch.  68,  70.  MeCrca,  1  Wend.   167  ;  Bracket  i'.  Wins- 

(7)  Terrell    v.   Goddard,    18   Ga.    664.  low,  17  Mass.  153;  Hainmatt  v.  Wyman, 

See  Stevens  v.  Yeatinan,  19  Md.  480.  9  Mass.  139;  Stevens  v.  Morse,  7  Me.  36. 

(r)  Caldwell  v.  Lieber,  7  Paige,  483  ;  (t)  Story   on    Part.    §    334  ;    Ault    v. 

Thornton  v.  Proctor,  1  Anst.  94  ;  Frank-  Goodrich,  4  Russ.  430.   Gow  on  Part.  ch. 

lin  V.  Robinson,  1  Johns.  Ch.   157,   165  ;  5,  §    2,    p.    240,    3d    edit.  ;    Blundell    v. 

Bradford  v.  Kiniberly,  3  Johns.  Ch.  431  ;  Winsor,    8    Sim.    613.     Dissolution    does 

Burden  v.  Burden,  1  Ves.  &  R.  170  ;  Lee  not  release  the  partnership  fiom  their  lia- 


§  297.]  OF   DISSOLUTION.  385 

the  jiartnei'S  may  agree  as  they  please  about  their  joint  property  and 
all  the  parts  of  it;  and  so  they  jnay  about  their  joint  obligations. 
And  all  such  agreements  are  valid,  so  far  as  they  do  not  affect 
the  rights  of  strangers  ;  but,  where  they  do,  they  are  wholly 
void.  Thus,  three  partners  may  agree  to-day  to  dissolve,  and  to 
divide  all  the  property  in  a  certain  way,  specifying  that  one  shall 
have  this,  another  that,  and  the  third  that  thing.  Or  they  make 
such  an  agreement  about  some  one  or  more  things,  and  not  about 
all.  And  these  agreements  determine  the  property  in  these 
things  effectually  as  to  the  partners  themselves.  But  they  are 
all  responsible  in  solido  for  the  debts  due  by  the  firm  ;  and  all 
the  joint  j)roperty  of  the  firm  is  just  as  liable  for  the  joint  debts, 
after  such  division  or  settlement  among  themselves,  as  it  was 
before,  (u) 

§  297.  Dealing  with  any  Partner  Protected.  —  So,  too,  it  is  very 
common  fur  the  })artners  to  agree  not  only  that  one  of  them  mai/ 
settle  and  wind  up  the  partnership  concern,  but  that  one  or  more 
shall  wind  it  up,  and  for  that  purpose  shall  have  in  full  property 
all  the  goods  or  funds  and  business,  or  a  certain  j)art  of  tliem, 
and  shall  pay  all  the  debts ;  and  this  he  undertakes  to  do.  Such 
an  agreement  is  so  far  binding  on  the  partners,  that,  if  either  of 
the  others  is  obliged  to  pay  a  debt  thus  assumed  by  a  partner,  the 
partner  paying  may  have  his  action  for  the  money  against  the 
partner  who  undertook  to  pay.  But,  so  far  as  the  creditors  are 
concerned,  all  the  partners  remain  just  as  responsible  to  all  the 
creditors,  after  such  an  agreement,  as  they  were  before,  (v) 
Thus,  an  agreement  between  the  partners,  that  one  of  them  shall 
settle  up  the  affairs  of  the  concern,  collect  and  pay  the  debts, 
and  the  like,  will  not  prevent  any  person  from  effectually  paying 
to  any  partner  a  debt  due  the  firm;  {iv)  even  though  the  debtor 
has  notice  of  the  arrangement,  (a:)  And  a  payment,  after  dis- 
solution, to  an  insolvent  partner,  has  been  held  to  be  good,  where 

bility  on  a  continuing  but  still  unexecuted  things   past,    the   partnership    continues, 

contract.     Dickson  v.  Indiana  Mfg.  Co.,  and  always  must  continue."     See  Smyth 

63  Ind.  9.  V.  Harrie,  31    111.   62.     And  see  a  some- 

(u)  Smith  V.  Jameson,  5   T.  R.  601  ;  what  peculiar  case  on  this  subject,  Mayer 

Dickenson  v.   Lockyer,  4  Ves.   36;  Cum-  v.    Clark,    40   Ala.    259;    and   Myers    v. 

niins    V.    Cummins,    8     I  red.     Eq.     723  ;  Smith,  15  Iowa,  181. 

Wood   V.  Braddick,    1   Taunt   104  ;  Hoby  (v)  Pee   Rodgers  v.   Maw,    4   Dowl.  & 

V.    Roebuck,   7    Tanut.    157  ;   Graham    v.  L.  66  ;  Smith  v.  Jameson,  5  T.  R.  601. 

Wichels,  1   Or.  &  M.    188.     In  Wood  v.  (w)  King  v.   Smith,  4  C.   &   P.    108  ; 

Braddick,    Heath,    J.,    says :    "When    a  Diitf    v.   East   India  Co.,    15   Ves.    198; 

l)artnership  is  dissolved,  it  is  not  dissolved  Coombs  v.  Boswell,  1  Dana,  473. 

with  regard  to  things  past,  but  only  with  (x)  Porter  v.  Taylor,  6  M.  &  S.  156. 
regard  to  things  future.     With  regard  to 

25 


386  THE   LAW    OF   PARTNERSHIP.  [CH.    XII. 

the  partner  was  insolvent  at  the  time  the  firm  was  formed,  and 
known  to  be  so  to  the  other  partners,  (y)  But  where  the  legal  or 
equitable  interest  in  a  partnership  has  been  transferred  to  an 
assignee,  a  debtor  who  should  ])ay  a  debt  to  either  of  the  part- 
ners, after  notice  of  such  assignment,  would  be  liable  to  the 
assignee.  (2)  And  a  payment  to  the  executor  of  a  deceased 
partner  is  not  good,  (a) 

§  298.  Consent  of  Creditor  to  Special  Arrangement.  —  Though 
these  agreements  between  the  partners  do  not  affect  the  creditors, 
without  their  consent,  yet  it  is  certain  that,  if,  in  any  case,  they 
do  consent,  and  for  sufficient  consideration,  they  become  parties 
to  the  agreement,  and  are  bound  by  it.  (ft)  The  question  whether 
they  have  assented,  and,  if  so,  whether  on  good  consideration, 
arises  sometimes  under  every  form  of  dissolution  ;  but  far  more 
frequently  where  there  is  a  change  among  the  members,  —  one  or 
more  going  out,  and  one  or  more  new  ones  coming  in.  And  then 
it  is  important  to  ascertain  who  are  the  debtors  or  the  creditors, 
under  an  obligation  which  existed  at  the  time  the  contract  was 
made;  that  is,  whether  a  retiring  partner  is  freed  from  this 
obligation,  or  whether  an  incoming  partner  lias  assumed  it.  "We 
shall  consider  the  principles  applicable  to  these  cases  more 
fully  when  we  treat  of  this  particular  form  of  dissolution  ;  at 
present,  remarking  only,  in  the  first  place,  that  the  consent  of  the 
creditors  to  an  arrangement  which  discharges  some  of  their  debt- 
ors, may  be  expressed  or  implied  from  circumstances  distinctly 
indicative  of  their  knowledge  of  the  transfer  or  change  of  the 
indebtedness,  and  of  their  concurrence  and  consent ;  and  in  the 
next  place,  that  this  concurrence  and  consent,  whether  expressed 
or  implied,  will  not  suffice  to  exonerate  the  partners  whom  it  is 
intended  to  discharge,  unless  there  be  a  valuable  consideration 
for  it.  Because,  as  every  creditor  has  the  liability  of  every  part- 
ner, he  only  lessens  his  security  by  taking  one  for  the  whole ; 
and  his  agreement  to  do  this  can  bind  him  no  more  than  any 
other  agreement  to  discharge  a  debt,  unless  he  gains  some  advan- 
tage by  it, —  which  may  be,  by  added  security,  better  terms  of 
payment,  more  favorable  business,  or  any  other  benefit,  —  or 
unless  those  whom  he  discharges  undergo,  at  his  instance  or 
request,  a  loss  by  reason  of  his  concurrence  and  consent,  by  pay- 


(7/)  Major  V.  Hawkes,  12  111.  298.  («)  "Wallace   v.   Fitzsimmons,   1   Dall. 

(2)  Gordon    v.    Freeman,    11    111.    14.  248. 
See  also  Pritchard  v.  Draper,  1  Russ.  &  (b)  Buller  J.,  in    Tatlock    v.   Harris, 

M.  191.  3T.  R.  180. 


§  299.]  OF   DISSOLUTION.  387 

iiig  something  to  him  who  undertakes  to  pay  the  debt,  or  in  some 
other  way  ))cnefitin<>-  him  at  their  own  cost,  (c) 

§  299.  Notice  of  Dissolution.  — Another  most  important  subject 
connected  with  dissohition  is  notice.  For,  on  the  same  principles 
which  hold  a  principal  bound  by  the  acts  of  his  general  agent 
whose  authority  he  had  revoked,  unless  he  has  given  sufficient 
notice  of  his  revocation,  any  person  who  deals  with  one  profess- 
ing to  act  for  himself  and  others  as  partners  in  a  certain  firm, 
and  believes  that  he  so  acts,  and  is  justified  in  that  belief,  either 
by  what  those  others  so  held  out  as  partners  have  done  or  have 
failed  to  do,  has  both  a  legal  and  a  moral  right  to  hold  them  as 
partners,  (ci)  This  is  true  of  every  dissolution,  excepting  that 
by  the  death  of  a  partner,  (g)  which  event  is  said  to  operate  an 
universal  notice,  or,  at  least,  to  render  a  notice  unnecessary.  But 
a  creditor,  having  knowledge  of  a  dissolution  of  a  copartnership 
when  he  gives  credit  to  it,  cannot  recover  from  members  who 
have  retired,  however  the  knowledge  was  communicated  to 
him.  (ee)  And  this  is  true  where  the  dissolution  is  by  the  death 
of  a  partner,  and  the  debt  is  contracted  with  one  having  knowl- 
edge of  the  death,  {eee}  The  chief  importance  of  this  require- 
ment of  notice,  and  the  principal  questions  arising  under  it, 
belong  to  cases  of  dissolution  by  change,  in  which  the  retiring 
partner  must  give  notice  of  his  retirement,  or  continue  to  be  held 
as  partner ;  and  we  shall  consider  when  notice  and  what  notice  is 
necessary,  more  fully,  when  we  treat  of  that  form  of  dissolu- 
tion. (/) 

(c)  See,  oil  these  questions,  Kirwan  v.  the  firm,  will  bind  the  firm  to  those  who, 

Kirwan,  2  Cr.    &  M.  617  ;  Thompson  f.  having    previously   dealt  with    the   firm, 

Percival,  5  B.  &  Ad.  925  :  Lodge  t".  Dicas,  have    had  no  notice    of   the    dissolution. 

3  B.  &  Aid.  611  ;  David  v.  EUice,  5  B.  &  Dickinson   v.   Dickinson,   25    Gratt.   321. 

C.  196,   1  C.  &  P.  369  ;  Thomas  v.  Shil-  See  also  Lovejoy  v.  Spofford,  93  U.  S.  430. 
libeer,  1  M.  &  W.   12-4  ;    Evans  v.  Drum-  (c)   Devaynes  v.  Noble,  Houlton's  Case, 

mond,  4  Esp.   89  ;  Reed  i\  White,  5  Esp.  1  Meriv.  616,  Johnes'  Case,  1  Meriv.  619, 

122  ;  Heath  v.  Percival,  1  P.  Wms.  682,  Brice's  Case,   1  Meriv.   620  ;    Webster  v. 

1   Str.    403  ;  Bedford  v.  Deakin,   2  B.   &  Webster,  3  Swanst.  490  ;    Blades  c.   Free, 

Aid.  110  ;  Featherstone  v.  Hunt,  1   B.   &  9B.  &  C.  167;  Smoutr.  Ilbery,  10  M.  &  W. 

C.    113;  Spenceley  v.  Greenwood,    IF.  1;  Carapanari  v.  Woodburn,  15  C.  B.  400. 

&   F.    297;    Robinson    v.    Wilkinson,    3  One  who  suffers  his  name  to  be  used  in  a 

Price,   538  ;    Gough   v.   Davies,    4    Price,  firm  after  his  retirement  is  responsible  to 

200  ;  Blew   v.  Wyatt,    5    C.    &   P.    397  ;  new  customers  as  well  as  old,  who  do  not 

Hart  V.  Alexander,  7  C.  &  P.  746  ;  Harris  have  actual  knowledge  of  the  change.  He 

V.  Farwell,  15  Beav.  31.  Krueger,  2  Low.  66  ;   and  is  estopped  to 

{d)  See  Vice  v.  Fleming,  1  Younge  &  J.  deny  his  responsibility,  Speer  v.  Bishop, 

227  ;    Willis     v.    Dyson,  1    Stark.    164  ;  24  Ohio  St.  598. 
Rooth  V.  Quill,   7  Price,  193  ;  Galwey  v.  (ee)  Davis  v.  Keyes,  38  N.  Y.  94. 

Mathew,    1    Camp.    402,   10    East,    264  ;  {eee)  Stanwood  v.  Owen,  14  Gray,  195. 

Pecker   v.    Hall,  14   Allen,   532.     A  new  (/)   See  Chamberlain  t».  Dow,  10  Mich, 

contract,  after  dissolution,  in  the  name  of  319.     [See  Post,  §  315  ct  seq.] 


388  THE    LAW    OF    PARTNERSHIP.  [CH.    XII. 

^  300.  Actions  and  Remedies  after  Dissolution.  —  As  the  fact  of 
dissolution  has  no  elt'ect  whatever  on  the  rights  of  third  persons, 
or  on  the  rights  of  the  firm  against  third  persons,  so  it  is  a  gen- 
eral rule,  that  actions  hy  and  against  the  firm  must  continue  to 
he  what  they  would  have  been  l)cfore  the  dissolution.  That  is, 
all  the  names  of  the  partners  must  be  used  in  an  action  brought 
by  the  settling  partner,  for  a  debt  due  to  the  firm  : '  and,  if  a 
debt  owed  by  the  firm  is  sued,  not  only  can  all  the  old  partners 
be  sued,  {g)  but  it  is  not  enough  to  make  the  settling  partner  sole 
defendant,  even  if  he  have  undertaken  to  pay  all  the  debts  of  the 
firm,  unless  it  is  intended  to  discharge  all  the  other  partners. 

A  dissolution  may  put  an  end  to  a  right  or  interest  held  by  a 
partnership,  if  it  be  held  on  condition  that  the  partnership  exists, 
or  if  it  be  of  such  a  nature  that  the  law  considers  it  as  existing 
only  while  the  partnership  exists ;  but  not  if  the  continued  exist- 
ence of  the  right  or  interest  is  independent  of  the  existence  of 
the  partnership.  Thus,  a  common  lease  to  a  firm,  from  a  stranger, 
is  a  property  which  survives  the  dissolution.  All  the  partners 
continue  to  be  bonnd  for  the  rent,  and  all  are  entitled  to  the 
beneficial  use  of,  or  interest  in,  the  lease.  But  if  it  is  stipulated 
that  it  be  held  during  the  partnership  only,  the  lease  is  terminated 
by  the  dissolution,  (i)  So,  a  lease  held  by  the  partners,  as  part- 
ners, from  one  of  them,  is  terminated  by  the  dissolution ;  and 
the  lessor  may  at  once  re-enter,  without  notice,  (j*') 

§  301.  What  Acts  Dissolve  a  Partnership  :  Outlawry.  —  Disso- 
lution of  partnership  may  occur  by  the  act  and  intent  of  some  of 
the  partners  only,  or  as  the  effect  of  some  act  or  condition  of 
theirs.  (Jc)  Without  now  speaking  of  these  acts  or  conditions, 
which  are  good  cause  for  a  decree  of  dissolution,  we  nmy  speak 
of    some  which,  of  themselves,  operate  a  dissolution.^     One  of 


(f/)  Dobbin  v.  Foster,  1  C.  &  K.  323.  Featlierstouhangh  v.  Fenwick,  17  Yes.  298; 

(i)  Waithnian  v.  Miles,  1  Stark.  181.  Crawshay  v.  Maule,  1  Swanst.  508  ;  Miles 

(j)  Colnaghi  v.  Bluck,  8  C.  &  P.  464.  v.  Thomas,  9  Sim.  606. 
(k)  Peacock  v.  Peacock,   16  Ves.  50  ; 


1  Atkinson  v.  Laing,  Dowl.  &  Pi.  N.  P.  16,  contra,  is  of  ver)'  doubtful  authority. 
'*  The  propriety  of  this  decision  is  more  than  questionable."     1  Lind.  Part.  286. 

2  There  are  certain  acts  or  events  which  dissolve  a  partnership  by  operation  of  law. 
Thus  the  marriage  of  a  female  partner,  Brown  v.  Chancellor,  61  Tex.  437  ;  post,  §  302. 
So  where  a  male  and  a  female  partner  intermarry.  Bassett  v.  Sliepardson,  52  Mich.  3, 
17  N.  W.  217.  Upon  the  declaration  or  outbreak  of  a  war,  partnership  with  an  enemy 
is  dissolved.  Leftwich  v.  Clinton,  4  Lans.  176.  Death  or  bankruptcy  of  a  partner 
dissolves  the  partnership  as  a  matter  of  law  (see  post,  §§  304,  342  ;  ch.  xv.).  And  for 
a  similar  reason  the  sale  on  execution  of  a  partner's  interest  in  the  firm  operates  as  a 


§  302.]  OF  DISSOLUTION.  38'J 

thcso,  at  common  law,  is  outlawry ;  and,  although  we  know 
nothing  of  this  here,  we  have  conviction  for  felony.  In  England, 
wiiere  attainder  forfeits  the  property  of  the  convict  to  the  king, 
who  cannot  be  a  tenant  in  common  with  a  subject,  it  not  only 
dissolves  the  partnership,  but  transfers  to  the  king  all  the  joint 
property  of  the  partnership.  That  effect  of  the  rule  exists  now 
in  England  only  in  theory,  if  it  ever  was  applied  to  a  case  of 
partnership.  In  this  country  we  know  nothing  of  it.  But  still, 
we  su))pose  that  a  conviction  for  felony  would  here  operate  a 
dissolution,  of  itself,  and  without  waiting  for  a  decree.  But  it 
may  be  open  to  question  whether  notice  is  necessary  in  this  case. 
If  a  convicted  partner  used  the  name  of  the  firm,  apparently  in 
its  business,  immediately  after  his  conviction,  we  should  say,  that 
it  would  bind  the  linn  to  a  party  wlio  had  no  knowledge  of  the 
felony,  and  no  especial  means  of  knowledge. 

§  802.  Marriage.  —  So,  on  the  marriage  of  a  female  partner,  the 
other  i)artner  may  dissolve  the  partnership  ;  for  all  the  rights, 
interests,  and  property  she  can  hold  as  partner,  pass  at  once  to 
the  husband,  by  the  common  law,  as  completely  by  marriage  as 
they  would  by  any  transfer ;  and  she  loses  all  power  of  binding 
herself  by  any  contract.  (Z) 

Her  husband  cannot  claim,  as  matter  of  right,  to  be  admitted 
as  partner;  and  if  he  becomes  so  by  agreement,  it  is  a  new  part- 
nership. And  even  if,  by  some  valid  contract,  the  marriage 
leaves  her  property  under  her  control,  she  loses  by  marriage  the 
power  of  independent  personal  action  in  matters  of  business,  and 
this  would  sufhce  to  0])erate  a  dissolution.  But  if  any  peculiar 
agreements  or  trusts,  or  other  circumstances,  prevented  this  mar- 
riage from  operating  a  dissolution  of  itself,  a  court  of  equity 
would  deem  it  suthcient  cause  for  a  decree  of  dissolution,  in  al- 
most any  supposable  case.  (Z/) 

(I)  Nerot  V.  Buniand,  i  Ross.  247  ;  and  no    definite    period  ;    and    either    party, 

see  Browu  v.  Jewett,  18  X.  H.  230.  therefore,  might  at  an}'  moment  have  put 

(U)  Both  Watsou  and  Gow,  in  their  an  end  to  it  by  notice.  Miss  Nerot  mar- 
works  ou  partnei'ship,  say  tliis  question  ried  Mr.  Burnand,  without  consulting  her 
has  never  been  directly  decided  ;  but  in  brother  ;  or,  at  least,  without  his  assent. 
Xerot  V.  Burnand,  4  Russ.  260,  Lord  If  she  chose  so  to  change  her  situation  as 
Lyudhurst  said  :  "  When  did  the  partner-  to  make  Mr.  Nerot,  in  point  of  fact, —  if 
ship  terminate  ?     It  was  a  partnership  for  the  partnership  went  on, —  a  partner  with 

dissolution.  Post,  §  30-4  ;  Wilson  i'.  ^Yaugh,  101  Pa.  233  ;  Carter  v.  Roland, 
53  Tex.  540. 

The  insanity  of  a  partner  does  not  of  itself  operate  as  a  dissolution,  even  after  the 
partner  has  been  adjudged  insane  by  a  court.  Past,  §  361  ;  Besch  v.  Frolich,  1  PhiL 
172  ;    Raymond  v.  Vaughn,  128  111.  256,  21  N.  E.  566. 


390  THE    LAW    OF    PARTNERSHIP.  [CH.    XII. 

^  803.  Guardianship.  —  On  botli  of  these  priiieiples  combined, 
a  partner  who  passes  under  guardianship  for  any  reason  — 
whether  improper  conduct  or  weakness  of  inind  or  other  cause  — 
has,  in  the  first  place,  his  property  taken  out  of  his  hands,  and, 
in  the  next  place,  is  deprived  of  the  power  of  entering  into  valid 
mercantile  transactions ;  and,  therefore,  he  must  cease  to  be  a 
partner.  The  guardian,  entering  into  possession,  becomes  tenant 
in  common  with  the  other  partners,  and  has  a  right  to  an  account. 
But  it  would  seem  that  such  guardianshij)  dissolved  the  partner- 
ship of  itself.  If  not,  it  would  undoubtedly  be  deemed  good 
cause  for  a  dissolution  by  a  decree,  (wi) 

§  304.  Bankruptcy  or  Execution. —  Bankruptcy  or  insolvency 
is  of  such  magnitude  that  it  will  be  considered  in  a  chapter  by 
itself.  Here  we  will  only  say,  that  the  i-eason  why  bankruptcy  of 
the  firm,  or  of  a  partner,  necessarily  produces  a  dissolution  of 
the  jiartnership,  is,  that  it  operates  at  once  an  absolute  transfer  to 
assignees  of  the  property  of  the  whole  firm,  or  of  the  whole  in- 
terest of  the  bankrupt  partner  in  the  property  of  the  firm.  Hav- 
ing no  longer  any  ownership,  either  in  the  stock  or  in  the  profits, 
all  foundation  for  the  relation  of  partner  is  taken  away.  The 
very  same  reason  applies,  and  with  the  same  effect,  to  aiiy  cause 
or  act  which  takes  from  a  partner  all  this  ownership  or  interest. 
It  may  be  his  voluntary  and  absolute  transfer  for  a  considera- 
tion, or  his  transfer  by  way  of  mortgage ;  but  then  it  produces 
dissolution  only  when  the  mortgagee  takes  possession.  Strictly 
and  technically  speaking,  a  transfer  by  way  of  pledge  would  have 
this  effect  at  once,  because  possession  in  the  pledgee  is  essential 
to  the  nature  of  a  pledge.  Or  it  may  be  a  levy  of  execution 
upon  the  partner's  interest  and  subsequent  sale.  (/)     We  should 

Burnaiid,  Mr.  Nerot  had  a  right,  the  13;  Cod.,  lib.  4.  tit.  37,  b.  7;  Pothier, 
moment  he  received  notice  of  that  step,  Pand.  lib.  17,  tit.  2,  n.  67  ;  2  Bell's 
to  act  upon  it,  and  say,  '  Yoiu'  marriage  Comm.,  b.  7,  ch.  2,  pp.  634,  635  (5th 
has  put  fin  end  to  the  partnership.'  No  ed. );  Griswold  v.  Waddington,  16  Johns. 
delay  took  place  in  that  respect ;  for  the  438,  491  ;  Milne  v.  Bartlet,  3  Jur,  358. 
bill  was  filed  as  early  as  Hilary  Term,  (j)  In  Griswold  v.  Waddington,  16 
1820,  the  marriage  having  taken  place  Johns.  491,  Kent,  Ch.,  says  :  "  In  speak- 
towards  the  close  of  the  preceding  year,  ing  of  the  dissolution  of  partner.shii>s,  the 
I  agree,  therefore,  with  the  Vice-Chancel-  French  and  civil  law  writers  say,  that 
lor,  in  saying  that  the  partnership  was  partnerships  are  dissolved  by  a  change  of 
dissolved  on  the  16th  of  September,  1819."  the  condition  of  one  of  the  parties,  which 
There  is,  however,  some  room  for  doubting  disables  him  to  perform  his  part  of  the 
if  this  case  holds  anything  more  than  duty  ;  as  by  a  loss  of  liberty,  or  banish- 
that;  as  it  was  a  partnership  for  no  limited  ment,  or  bankruptcy,  or  a  judicial  pro- 
period,  either  party  could  j)ut  an  end  to  it  hibition  to  execute  his  business,  or  by 
by  notice.  confiscation  of  his  goods.  The  English 
(m)  Doniat,  b.  1,  tit.  8,  §  5,  arts.  12,  law  of  partnership   is   derived  from   the 


§  ^05.] 


OF    DISSOLUTION. 


391 


say,  however,  that  an  attachment  on  mesne  process  wouhl  not 
have  tliis  effect,  nor  any  further  process  until  actual  transfer,  if, 
in  the  mean  time,  the  partner  retains  possession,  (k^ 

§  305.  Assignment.  —  Whether  a  partner  has  or  has  not  a  right 
to  terminate  the  partnership  at  his  pleasure,  (w?)  it  is  certain  that 
an  assi<!;nmcnt  by  one  i)artner,  of  all  his  interest  in  the  joint 
])roperty,  to  the  other  partner  or  partners,  operates  at  once  the 
withdrawal  of  the  assignor  and  a  dissolution  of  the  firm.  For 
here  the  other  partners  assent  to  the  transfer,  by  their  acceptance 
of  it;  and,  therefore,  no  (picstion  could  be  raised  as  to  the  right 
of  the  assignor,  (w)  And  an  assignment  to  a  third  person  may 
have  the  same  effect,  (o) 


same  source  ;  and,  as  the  cases  arise,  the 
same  piinciples  are  applied.  The  jirin- 
ciple  here  is,  that  when  one  of  the  parties 
becomes  disabled  to  act,  or  when  the 
business  of  the  association  becomes  im- 
practicable, the  law,  as  well  as  common 
reason,  adjudf^es  the  partnership  to  be 
dissolved."  Fox  v.  Hanbury,  Cowp.  44.5  ; 
Skipt?.  Harwood,  2  Swanst.  58t) ;  William- 
sou  ?'.  Wilson,  1  Bland,  418  ;  Gowan  v. 
Jeffries,  2  Ashm.  305  ;  Moodj'  v.  Payne, 
2  Johns.  Ch.  548  ;  Button  v.  Morrison, 
17  Ves.  194,  206.  Morton,  J.,  in  deliver- 
ing the  opinion  of  the  court  in  Arnold  v. 
Brown,  24  Pick.  93,  limits  the  effect  as 
follows  :  "  The  insolvency  of  one  or  both 
l)artners,  we  think,  would  not  produce 
this  effect.  The  insolvency  of  one  might 
furnish  to  the  other  sufficient  ground  for 
declaring  a  dissolution.  But,  in  this  State, 
the  inability  to  pay  the  company  or  the 
private  debts  of  the  partners,  would  not, 
]icr  sc,  operate  as  a  dissolution.  In  Eng- 
land, bankruptcy,  and  in  some  of  our 
States  where  insolvent  laws  exist,  legal 
insolvency,  may  produce  a  dissolution. 
Wherever  the  one  or  the  other  opeiates  to 
vest  the  bankrupt's  or  insolvent's  property 
in  assignees  or  other  ministers  of  the  law, 
it  would  produce  that  effect.  Probably  a 
voluntary  assignment  by  a  partner  of  all 
his  property  would  do  the  same.  In  such 
cases,  the  partner,  being  divested  of  his 
pro{ierty,  and  rendered  unable  to  perform 
the  duties  ot  a  partner,  would,  of  course, 
cease  to  be  one  ;  and  his  assignees  coming 
in  as  tenants  in  common,  and  not  partners, 
the  partnership  would  be  dissolved."  On 
this,  see  Crispe  v.  Perritt,  Willes,  467,  1 


Atk.  133  ;  Hague  v.  Rolleston,  4  Burr. 
2174  ;  Smith  v.  Stokes,  1  East,  363  ; 
Smith  V.  Oriell,  1  East,  368  ;  Ex  parte 
Williams,  11  Ves.  5  ;  Wilson  v.  Green- 
wood, 1  Swanst.  482  ;  Harvey  v.  Crickett, 
5  M.  &  S.  336  ;  Barker  v.  Goodair,  11 
Ves.  78  ;  Marquand  v.  New  York  Manuf. 
Co.,  17  Johns.  529  ;  Waters  v.  Taylor,  2 
Ves.  &  B.  299.  In  Haborshon  v.  Blurton, 
1  De  G.  &  S.  121,  it  is  expressly  decided 
that  execution  and  assignment  of  the  in- 
terest of  one  of  the  i)artners  in  a  firm  dis- 
solves the  partnership.  And  see  Renton 
V.  Chaplain,  1  Stockt.  (N.  J.)  62.  So,  a 
sale  by  one  partner  of  all  his  interest  to 
his  copartner  works  a  dissolution  of  the 
partnership,  Rogers  v.  Nichols,  20  Tex. 
719 ;  or  sale  to  a  stranger  or  partner, 
Cochran  v.  Perry,  8  W.  &  S.  262  ;  Reece 
V.  Hoyt,  4  Ind.  169;  Marquand  v.  The 
New  York  Manuf.  Co.,  17  Johns.  525. 

[k)  On  questions  connected  with  the 
attachment  of  the  property  of  one  member 
of  a  partnership,  see  ante,  §  253  ;  Esta- 
brook  V.  Messersmith,  18  Wis.  545.  See 
post,      305. 

(m)  Equity  would  probably  restrain  to 
prevent  irreparable  mischief.  See  Chavany 
V.  Van  Somnier,  3  Woodd.  Lect.  416,  n., 
1  Swanst.  512,  n.;  Blisset  v.  Daniel,  10 
Hare,  493. 

(?(.)  Heath  v.  Sanson,  4  B.  &  Ad.  175  ; 
Cochran  v.  Perry,  8  W.  &  S    262. 

(rt)  Jefferys  v.  Smith,  3  Russ.  158  ; 
Mar([uand  v.  N.  Y.  Manuf.  Co.,  17  Johns. 
525  ;  Horton's  Appeal,  13  Pa.  67  ;  Con- 
well  V.  Sandidge,  5  Dana,  210  ;  Parkhurst 
V.  Kinsman,  1  Blatchf.  488.  See  Merrick 
V,  Braiuard,  38  Barb.  574.     In  Buford  v. 


392  THE   LAW   OF   PARTNERSHIP.  [CH.    XII, 

So  an  assignment,  in  good  faith,  by  a  partner,  of  all  the  joint 
property  in  trust,  for  the  payment  of  the  debts  of  the  firm,  which, 
as  we  have  seen,  may  be  valid,  would  seem  to  operate  a  dissolu- 
tion, (p')  And  so  would  a  sale  on  execution  and  levy  upon  the 
interest  of  an  insolvent  partner  in  the  joint  property.  (5-)  I]ut 
an  attachment  alone,  in  mesne  process,  only  giv^es  a  lien  to  llie 
creditor;  and  docs  not  transfer  to  him  the  property,  and,  there- 
fore, does  not  dissolve  the  partnership,  (r)  These  cases  of  as 
signmcnt  to  pay  debts,  and  sale  on  execution,  however,  belong 
rather  to  the  subject  of  dissolution  by  bankruptcy.  Let  us  con- 
sider here  what  right  a  partner  has  to  terminate  the  partnership 
at  his  own  will,  and  by  his  direct  action. 

§  306.  Partnerships  at  Will.  — While  the  courts  have  found  much 
difliculty  in  compelling  parties  to  remain  together,  when  a  ])art 
of  them  wish  for  a  separation,  it  has  never  been  said,  that  a  con- 
tract for  a  partnership,  for  a  time  certain,  is,  as  to  this  limitation, 
wholly  inoperative  in  law  or  in  equity.  On  the  other  hand,  it  is 
universally  agreed,  that  where  there  is  no  such  limitation, —  that 
is,  where  the  contract  is  not  for  a  certain  time,  —  it  is  always  in 
the  power  of  any  one  partner  to  dissolve  the  partnership,  at  his 
own  pleasure,  and  for  no  other  cause  than  that  pleasure,  (s)  ^ 

Neely,  2  Dev.    Eij.  481,  the  general  doc-  Cii.  62  ;  Joliiison  v.  Evans,  7  M.  &  G.  240. 

trine  was  assented  to  ;  but  as  the  assign-  A  ])uiehase  by  otlier  partners  of  tlie  share 

ment  in  that  case  was  as  security  for  a  so  sold,  must  be  made  under  circumstances 

debt,  and  it  was  agreed  by  all  parties  that  placing  it  beyond  susi>ici<)n  ;   otherwise, 

the  assignor  should  continue  in   business  the   sale   will   be  set  aside,   the  jiartners 

as  the  agent  of  the  assignee,  it  was  held  being  treated  as  the  trustees  of  Iho  other 

that   the   jjartnership  was   not   dissolved,  partner.      Perens  v.  Johnson,  3  Sm.  &  G. 

And,  if,  notwithstanding  such  assignment,  419. 

the  assignor  continues  to  act  as  a  partner,  [r)  Arnold  v.  Brown,  24  Pick.  38. 

and  transacts  business  as  before,  there  is  {s)   Peacock   v.   Peacock,    16   Ves.  49  ; 

no  dissolution.     Taft  v.  Buffum,  14  Pick.  Featherstonhaugh    v.   Fenwick,    17    Ves. 

322.  298,  307  ;    Alcock   v.  Taylor,    1   Tanilyn, 

ip)  See  Gordon  v.  Freeman,  11  111.  14.  506  ;  Cravvshay  v.  Maule,  1    Swanst.  495, 

(q)  Habershon  v.  Blnrton,  1  De  G.  &  508  ;  Ex  parte  Nokes,  1    Mont,   on  Part. 

S.  121  ;  Aspinall  v.  London  &  N.  W.  R.  114,    n.  ;    Skinner   v.    Tinker,    34   Barb. 

Co.,  11  Hare,  325  ;  Skip    v.    Harwood,  2  333. 
Swanst.  586  ;  Kenton  v.  Chaplain,  1  Stock. 

^  Diasohttion  hy  Act  of  a  SbigJe  ' Partner :  Partnership  at  JVill.  —  Where  no  time 
is  named  for  the  continuance  of  the  partnership,  it  is  a  partnership  at  will,  and  any 
partner  may  dissolve  it  at  any  time.  Blake  f.  Sweeting,  121  111.  67,  12  N.  E.  67  ; 
Fletcher  v.  Reed,  131  Mass.  312  ;  Walker  v.  Whipple,  58  Mich.  476,  25  N.  W.  472  ; 
McElvey  v.  Lewis,  76  N.  Y  373.  The  same  is  true  of  a  ])artnershii)  terminable 
on  sixty  days'  notice.  Swift  v.  Ward,  80  la.  700,  45  N.  W.  1044.  The  ordinary 
method  of  terminating  a  partnership  at  will  is  by  notice  to  each  member  of  the 
firm.  It  is  terminated  as  soon  as  the  notices  are  received,  without  the  necessity 
of  any  action  by  the  other  partners.  Green  v.  Waco  State  Bank,  78  Tex.  2.  The 
will  may  however  be  exercised  in  another  form  ;   the  sale  of  all  interests  of  a  part- 


§  306.]  OF   DISSOLUTION.  393 

Still  it  has  been  intimated  that  the  dissolution  must  be  in  good 
faith,  and  not  unreasonable  in  point  of  time  or  manner,  or  unne- 

ner  at  will  is  eijually  eiructual  to  terminate    the    partnership.     Blaker    v.  Sands,  29 
Kas.  551. 

It  has  sometimes  been  suggested  that  the  exercise  of  the  will  by  a  partner  is 
not  elfectual  to  dissolve  the  partnership  unless  it  is  bona  fide.  This  seems,  how- 
ever, not  to  be  sound.  A  notice,  though  given  inala  fide,  does,  it  would  seem, 
dissolve  a  i)artnership  at  will  (Swift  v.  Ward,  80  la.  700,  45  N.  W.  1044), 
though  it  might  perhaps  give  the  other  partners  a  claim  for  damages.  See  Fletcher 
V.  Reed,  131  Muss.  312;  Ball  v.  Britton,  58  Tex.  57.  Certainly  the  bona  fide 
exercise  of  the  right  to  dissolve  gives  the  other  partners  no  right  to  claim  damages. 
Fletcher  v.  Reed,  131  Mass.  312  ;  Walker  v.  Whipple,  58  Mich.  476,  25  N.  W. 
472.  For  partnerships  which  though  no  term  was  named  were  held  not  to  be  part- 
nersliips  at  will,  see  nnte,  §  282. 

The  exclusion  from  tiie  business  of  one  partner  by  his  copartner  is  of  course  an 
exercise  of  the  right  of  dissolution,  and  the  partnership  thereupon  ceases.  But 
though  the  excluded  partner  is  no  longer  interested  in  the  business,  the  other 
has  certainly  no  right  to  an  exclusive  use  of  the  firm  assets.  If  he  takes  possession 
of  them,  he  maj'  be  treated  as  a  constructive  trustee  ;  and  the  excluded  partner  may,  it 
would  seem,  get  the  value  of  his  share  of  the  assets,  together  with  the  profits  realized 
from  the  use  of  such  share.  Major  v.  Todd,  84  Alich.  85,  47  N.  W.  841  ;  Zim- 
merman V.  Chambers,   79  Wis.  20,   47    N.  W.  947. 

A  mining  partnership  is  peculiar,  in  that  tliere  is  no  dilectiis  personarum. 
Therefore  a  sale  of  his  interests  by  one  partner  does  not  dissolve  a  mining  partner- 
shi]);  the  purchaser  takes  the  seller's  place  in  the  firm.  Lamar  v.  Hale,  79  Va. 
147.  Therefore  the  right  to  dissolve  such  a  ))artnership,  when  tliere  is  no  fixed 
term,  passes  to  the  purchaser ;  and  he  may  dissolve  by  giving  notice.  Galigher  v. 
Loekhart,   11  Mont.  109,  27  Pac.  446. 

Dissolution  by  Act  of  a  Sing/e  Partner  :  Partnership  for  a  Term.  —  It  would 
seem  unreasonable  that  one  partner  should  have  the  power  by  any  act  of  his  to 
dissolve,  against  the  will  of  his  copartner,  a  partnership  for  a  term.  If,  for  instance, 
by  an  assignment  of  his  interest  in  a  partnership  to  a  stranger  either  partner  may 
force  a  dissolution,  every  partnership  becomes  practically  a  partnership  at  will. 
This  has  been  acknowledged  in  Michigan  to  be  true.  There  is  no  such  thing,  it 
is  there  said,  as  a  partnership  indissoluble  for  a  term.  It  wa.s  held  that  a  partner 
may  at  any  time  dissolve  a  partnership,  at  least  as  to  liability  to  third  persons 
upon  subsequent  contracts,  by  merely  giving  notice  to  them  of  a  refusal  to  con- 
tinue liable  as  a  partner.  Solomon  v.  Kirkwood,  55  Jlicli.  256,  21  X.  W.  336. 
And  it  is  ordinarily  said  that  the  assignment  of  a  partner  puts  an  end  to  the 
partnership.  McCall  v.  Moss.  112  111.  493  ;  Conrad  v.  Buck,  21  AV.  Va.  396.  It 
is  of  course  true  that  under  ordinary  circumstances  this  must  be  so,  since  the 
purchaser  may  file  a  bill  for  an  account ;  but  the  better  view  seems  to  be  that  his 
right  to  have  the  firm  wound  up  may  be  subject  to  modification  by  circumstances. 
Riddle  V.   Whitehill,   135  U.  S.  621. 

The  act  of  one  partner  may  certainly  be  such  as  to  give  his  copartner  a  right  to  consider 
the  partnership  at  an  end.  In  such  a  case  the  dissolution  is  not  properly  called  the  act 
of  a  single  partner,  but  of  all  the  partners.  Thus  where  one  partner  refuses  to  go 
on  with  the  business,  he  ceases  to  have  any  right  to  claim  an  interest  in  the 
business  ;  the  other  may  treat  it  as  a  dissolution.  Ligare  v.  Peacock,  109  111. 
94  ;  Miller  v.  Chambers,  73  la.  236,  34  N.  W!  830  ;  Henry  v.  Bassett,  75  Mo. 
89  (semble).  So  where  one  partner  embezzles  the  assets  and  runs  away,  his  copartnei-  may 
treat  the  partnership  as  dissolved.  Strong  v.  Stapp,  74  Cal.  280,  15  Pac.  835.  On  the 
same  principle,  although  the  assignment  by  one  partner  of  his  interest  should  be  held 
not  to  work  a  dissolution,  against  tlie  wi!l  of  his  copartners,  the  latter  wouM  unquestion- 


394  THE    LAW    OF    PARTNERSHIP.  [  JH.  XII 

cessarily  injurious  to  the  other  partners,  (ss)  In  order  to  effect 
a  dissohition  in  sucii  a  case,  it  is  necessary  for  the  partner  wishing 
to  dissolve  to  give  notice  to  the  other  partners,  (t) 

Where  a  partnership  for  a  limited  period  expires,  and  is  con- 
tinued by  an  agreement  which  does  not  provide  for  any  further 
limitation,  the  effect  of  the  original  limitation  is  wholly  exhausted, 
and  the  new  partnership  is  dissoluble  at  the  will  of  any  partner ; 
although  all  the  other  provisions  and  arrangements  are  continued 
over,  either  expressly  or  by  implication,  (i^)  It  may  be  said, 
however,  that  where  all  these  are  carried  over,  if  they  seem  dis- 
tinctly to  imply  that  the  partnership  must  needs  continue  for  a 
definite  period,  the  law  might  be  more  willing  to  imply  such  a 
bargain,  than  it  is,  as  we  have  seen,  from  a  mere  lease  for  a  time, 
or  from  similar  circumstances. 

§  307.  Power  of  Partner  to  Dissolve  by  Roman  Law. — The 
Roman  law,  as  stated  in  the  Digest  (tf)  and  as  explained  or 
exhibited  by  Domat,  (a;)  contains  principles  on  this  subject  which 
are  not  only  not  expressly  adopted  in  the  English  or  V^merican 
jurisprudence,  but  which  might  seem  to  be  opposed  to  the  highest 
and  clearest  authority.  It  may  be  inferred  from  Domat,  that 
every  partner  has  a  perfect  right  to  terminate  the  partnership 
when  he  will,  even  if  entered  into  for  a  time  certain.  He  must, 
however,  take  a  convenient  and  suitable  opportunity  and  method 
for  the  exercise  of  this  right ;  and  must  do  this  for  honest  pur- 
poses, and  with  due  regard  to  the  safety  and  advantage  of  the 
other  partners.  The  line  is  not  very  distinctly  drawn.  But  it 
seems  that  lie  may,  at  any  moment  and  for  any  cause,  dissolve 
the  partnership  so  as  to  renounce  or  lose  all  the  benefit  of  it ; 
but  that  he  would  not  be   permitted  to  free  himself  or  his  pro- 

(ss)  This   was    so    held    in   the    well-  the  old   covenants  are   infnsed    into  the 

considered  case  of    Howell  v.  Harvey,    5  new  series  of  transactions,  with  the  single 

Ark.  270.     [Sed  query  :  See  note  1.]  exception   of   the  covenant  for  duration  ; 

(t)  Eagle  I'.  Bucher,  6  Ohio  St.  29.^.  for  either  may  instantcr  dissolve  the  pro- 
See  also  Van  Sandau  v.  Moore,  1  Russ.  longed  partnership,  but  the  original 
46-t  ;  Wheeler  v.  Van  Wart,  9  Sim.  193.  stipulations    are     continued."      See    also 

(u)  Featherstonhaugh  v.  Fen  wick,   17  Gould  v.  Horner,  12   Barb.  601  ;    Bradley 

Ves.  298,  307  ;    Crawshay  v.  Collins,   15  v.   Chamberlin,    16   Vt.  613  ;  U.  S.  Bank 

Ves.  218.     In  Booth  r.    Parks,  1   Alolloy,  v.  Binney,  5   Mason,  176,  185.     See  post, 

465,  the    Lord  Chancllor  states  the  rule  §  310,  note  {d). 
thus  :  "  The  partners,  after  the  expiration  {!/;)  Dig.  lib.  17,  tit.  2,  1.  14. 

of   the    partnershij)  term,    continuing  to  (x)  1  Domat,  tit.  8,  §  5,  art.  1-8. 

carry  on  the  trade  without  a  new  deed,  all 

ably  have  the  right  to  treat  it  as  such.  It  would  seem  clear  that  the  assignment  of 
his  interest  by  one  partner  to  his  single  copartner  must  work  a  dissolution,  since  all  the 
partners  agree.  See  a7ite,  §  305,  note  (n)  ;  but  see  contra,  Waller  v.  Davis,  59  la.  103, 
12  N.  W.  798. 


§  309.]  OF   DISSOLUTION.  395 

perty  from  the  just  claims  of  the  other  partners,  which  may 
extend  so  far  as  to  rerpiire  that  the  partnershii)  shall  continue  for 
a  season.  He  cannot  therefore  seize  a  moment  to  dissolve  a  part- 
nership when  he  sees  the  opportunity  of  making  a  great  gain  by 
a  sei)aratc  transaction,  which  ought,  with  all  its  advantages,  to 
belong  to  the  firm.  And  if  he  does,  in  this  way  and  for  this  pur- 
pose, seek  to  dissolve  the  partnership,  the  court  would  declare 
the  dissolution  void,  or  ineffectual  for  the  time,  and  the  partner- 
ship to  continue  until  it  could  be  terminated  without  wrong  to 
anybody.  We  think  a  court  of  equity  would  ap})ly  similar  prin- 
ciples to  this  question.  (?/) 

§  808.  Power  of  Equity  in  Case  of  Dissolution.  —  If  we  Suppose 
a  partner,  with  wrongful  intent,  to  declare  a  dissolution  at  such  a 
time,  and  for  such  purposes,  or  with  such  an  effect,  that  the 
Roman  law  would  declare  that  there  was  no  dissolution,  and  so 
preserve  the  rights  of  the  partners,  it  may  be  asked,  what  an 
English  or  American  court  would  d(j.  It  would  not,  we  appre- 
hend, deny  the  right  of  diss(jlution,  or  the  fact  of  dissolution  ; 
nor  perhaps  in  any  w^ay  restrain  the  jjartuer  from  the  exercise  of 
this  right.  But,  it  being  settled  that  the  partnership  is  now  dis- 
solved, the  whole  effect  and  influence  of  this  dissolution  is  in  the 
bauds  and  within  the  power  of  e(piity.  It  may  be  that  the  other 
partners  would  be  subjected  to  wrong  and  loss,  if  the  use  of  the 
firm  name  could  not  be  continued  in  completing  its  transac- 
tions, or  otherwise  in  protection  of  their  interests  ;  and  yet  that 
the  court  would  be  reluctant  to  authorize  the  use  of  the  name  of 
a  firm  which  had  ceased  to  exist.  But  it  is  hardly  possible  that 
the  same  results  could  not  be  reached  in  some  other  way,  which 
would  be  within  the  resources  of  ecpiity.  And  it  must  be  certain 
that  any  court  of  equity  would  bo  willing  to  use  all  its  authority, 
in  any  lawful  way,  to  carry  the  dissolution  into  effect ;  or,  in 
other  words,  to  direct  the  winding  np  of  the  concern  in  such  a 
way  as  to  protect  the  honest  partners  from  any  loss  through  the 
wrongful  act  or  wrongful  purpose  of  a  cojiartner.  And  if  it  be 
true,  as  we  suppose,  that  equity  could  always  do  this,  and  would 
always  do  it  when  practicable,  it  follows  that  the  difference 
between  the  Roman  law  and  the  English,  or  our  own,  is  only  a 
difference  in  the  rules  or  methods  by  which  the  two  systems  of 
law  accomplish  the  same  results. 

§  309.  Method  of  effecting  Dissolution.  —  There  is  no  exactly 
defined  way  in  which  a  partner  who  has  the.  right  to  terminate  a 

{if)  See  Cliavany  v.  Van  Soininer,  3  Woodd.  Lect.  416,  n.,  1  Swanst.  512,  n. ; 
Blisset  V.  Daniel,  10  Hare,  493. 


306  THE   LAW    OF    PARTNERSHIP.  [CH.    XII. 

partnership  must  or  should  exercise  this  right.  All  that  is  requi- 
site is,  that  lie  should  make  this  ])urpose  distinctly  known  to  the 
other  partners  ;  and,  as  soon  as  it  is  known,  it  takes  effect,  (z) 
The  notice  must  he  explicit ;  and  it  is  not  enough  to  propose  to 
dissolve  on  certain  terms,  unless  these  terms  are  accepted,  (a) 
So,  a  notice  that  a  partner's  share  has  been  forfeited  is  not 
enough ;  because  this  is  construed  to  mean  merely  that  the  part- 
ner named  has  ceased  to  have  any  interest  in  the  concern,  {b)  A 
partner  may  undoubtedly  make  this  dissolution  prospective ;  and 
this  is  the  usual  way  of  doing  it.  It  is  obvious  that  only  peculiar 
circumstances  could  justify  a  partner,  morally  speaking,  however 
it  might  be  legally,  in  saying  to  his  copartners,  at  once  and 
without  notice  or  preparation  :  From  this  moment  the  partner- 
ship ceases  to  exist.  And  such  conduct  would  certainly  induce 
a  court  of  equity  to  examine  closely  into  the  motives  which  led 
to  it,  and  into  the  effects  resulting  from  it,  that  they  might  pre- 
vent injurious  consequences.  Still,  however,  it  is  always  possible 
that  there  may  be  good  reason  for  the  sudden  exercise  of  this 
right,  of  the  existence  of  which  there  seems  to  be  no  doubt,  where 
the  partnership  is  not  formed  for  a  time  certain.  It  may  be  that 
no  other  course  would  prevent  the  firm  from  rushing  into  waste- 
ful and  dangerous  contracts,  or  from  pursuing  a  path  which  might 
lead  to  ruin.  And,  therefore,  on  the  one  hand,  the  court  would 
not  presume  that  such  a  dissolution  was  wrongful  in  intent  or 
eft'ect,  although  they  would  listen  to  evidence  showing  it  to  be  so. 
And,  on  the  other  hand,  as  soon  as  such  a  declaration  was  made, 
be  its  purpose  or  circumstances  what  they  might,  there  is  no 
reason  for  supposing  that  the  partnership  would  exist  a  moment 
longer,  (c) 

(z)  See  ante,  §  306  and  note  (s).  ton,  19  Johns.  538  ;  Mason  v.  Connell,  1 

{a)  Hall  V.  Hall,  12   Beav.    414  ;  Van  "Whart.    381.       In  Bishop  v.  Bnckles,    1 

Sandau  v.  Moore,  1  Russ.  463  ;  Wheeler  v.  Hotf.  Cli.  534,  the  court  said  :     "The  law 

Van  Wart,  9  Sim.  193.     See  Mellersh  v.  of  the  court  then  requires  something  more 

Keen,  27  Beav.  236.  than  the  mere  will  of  one  l)arty  to  justify 

(b)  Hart  v.  Clarke,  6  De  G.,  M.  &  G.  a  dissolution.  But  it  seems  to  me  that 
232.  but  little  more  should  be  demanded.     The 

(c)  The  question  whether  one  partner  principle  of  the  civil  law  is  the  most  wise, 
may,  by  his  own  mere  will,  dissolve  a  Why  should  this  court  compel  the  con- 
partnership  formed  for  a  definite  period,  tinuance  of  a  union,  when  dissension  has 
has  been  much  discussed  in  this  country  marred  all  prospect  of  the  advantages 
and  in  England.  It  appears  to  have  been  contemplated  by  its  formation  ?  By  refus- 
assumed  that  there  is  no  such  power,  iu  sing  to  dissolve  it,  the  power  of  binding 
Peacock  v.  Peacock,  16  Ves.  57  ;  Crawshay  each  other,  and  of  dealing  with  the  part- 
V.  Maule,  1  Swanst.  508  ;  Wheeler  v.  Van  nership  property,  remains,  when  all  con- 
Wart,  9  Sim.  193,  2  Jur.  252  ;  Pearpoiut  fidence  and  all  combination  of  effort  is  at 
V.  Graham,  4  Wash.  C.  C.  232.  The  right  an  end.  The  object  of  the  contract  is 
is  forcibly  maintained  in  Skinner  v.  Day-  defeated." 


§  310,]  OP   DISSOLUTION.  897 

§  310.  Need  not  be  by  Written  Notice.  —  The  dissolution  of  the 
partnership  by  the  act  of  a  partner,  or  at  his  will,  does  not  require 
a  written  declaration  of  his  will ;  nor  even  any  especial  spoken 
words,  or,  indeed,  any  words  whatever.  He  must  manifest  his 
desire  of  withdrawing  from  the  partnership.  He  may  do  this  as 
he  pleases;  and,  however  it  be  done,  it  has  the  same  effect.  But, 
if  he  only  manifest  his  desire  of  leaving  the  partnersliip  at  a 
future  time,  this  is  not  a  present  dissolution.  Nor  is  there  any 
way  to  manifest  the  purpose  of  immediate  withdrawal,  except  by 
such  withdrawal ;  and  this  is  a  dissolution.  This  could  hardly 
be  by  act  without  words.  But  he  may  manifest,  by  a  course  of 
action,  such  withdrawal.  He  may  engage  wholly  in  other  busi- 
ness, and  take  no  part  whatever  in  the  interests  or  concerns  of 
the  partnership.  This  would  rather  make  him  a  silent  partner, 
or  give  good  cause  for  the  other  partners  to  reject  him,  or  per- 
haps obtain  a  decree  for  his  removal,  than  amount  to  evidence 
that  he  had  in  fact  withdrawn  himself.  It  may,  however,  be  said, 
hypothetical ly,  that  such  conduct  might  be  carried  so  far  as  to 
have  that  significance  and  effect.  And  then  the  dissolution  would 
take  place,  not  wdien  the  other  partners  acceded  to  his  wish,  but 
when  it  became  certain  what  his  wish  was.  The  only  rule  appli- 
cable to  such  questious  must  be  this :  The  wish  of  a  partner  to 
dissolve  a  partnership  which  is  at  will,  while  it  remains  unex- 
pressed, can  have  no  force  nrjr  effect;  but  it  operates  to  cause  a 
dissolution  as  soon  as  it  is  distinctly  expressed,  whatever  be  the 
form  or  manner  of  this  expression,  (t^) 

(d)  In  Van  Sandau  v.  Jloore,  1   Russ.  accounts  of  the  partnership  dealings  and 

463,  Lord  Eldon  says  :  "The  bill  proceeds  transactions     taken,    up     to     that     very 

on    two    grounds  :    one,    that    ilr.    Van  moment)  ;    yet   one  difficulty   which  has 

Sandau  could  by  mere  notice  put  an  end  often  occurred  to  me  as  of  great  weight  in 

to  the  company  ;  the  other,  that  if  notice  cases  like  the  present,  with  reference  to 

alone  was  not  sufficient  for  that  purpose,  the  dissolution  of  the  company  by  notice, 

yet   there    has    been    such    conduct    on  is   this :    What   avails    it    that   you  give 

the  part  of  the  secretary  and  other  mem-  notice  to  A.  B.  of  putting  an  end  to  the 

bers  as  to  entitle  the  plaintiff  to  call  for  a  company,  if  you  do  not  give  notice  to  the 

dissolution  ;  and,  in  either  case,  he  prays  three  hundred  other  individuals  of  whom 

that   an  account   may   be  taken    of  the  it  is  composed  ?     Has  not  every  one   of 

partnership    dealings    and    transactions,  these  individuals  the  same    common-law 

Now,  though,  according  to  the  law  of  the  right  to  notice,  before  the  partnership  can 

country,  a  company  or  partnership  formed  be  dissolved  ?     If,  on  the  other  hand,  it  is 

by  parties  agreeing  to   become  copartners  said,    that   it   is  not    necessary   to    give 

may  be  dissolved  at  any  moment  by  one  of  notice  to  all  the  partners,  it  must  be  on 

the  partners,  and  though   his  copartners  the  ground  that  the  deed  has  made  some 

cannot  answer  his  notice  of  dissolution  by  provision  declaring  that  notice  not  to  be 

saying,  '  Here  is  your  money,  get  out  of  necessary,  which,  but  for  particular  piovi- 

the  concern,  and  leave  us  to  ourselves,'  sions,  would  be  necessary  ;  and  that  case 

{because  he  has  a  right  to  have  all  the  must  be  proved  from  the  deed  itself," 


398  THE   LAW    OP   PARTNERSHIP.  [CH.    XIIL 


CHAPTER  XIII. 

OP   A    CHANGE   IN   THE   PARTNERSHIP. 

SECTION    I. 
OP   THE   EPPECT   OP   ANY    CHANGE    IN   THE   PARTNERSHIP. 

§  311.  Change  in  Firm  puts  End  to  Partnership.  — The  retire- 
ment of  a  partner  may  take  place  in  many  ways.  He  may  simply 
withdraw,  carrying  with  him  and  retaining  all  his  interest  in 
the  property.  Or  he  may  retire,  by  transferring  his  interest  to 
a  stranger,  who  tlien  holds  it  as  tenant  in  common  with  the  otlier 
partners.  Or  he  may  transfer  it  to  one  who  is  received  by  the 
other  partners,  and  becomes  a  copartner  with  them.  However  it 
takes  place,  it  is  plain  that,  if  a  partnership  consists  of  but  two 
persons,  the  retirement  of  either  one  puts  an  end  to  that  partner- 
ship. And  it  may  now  be  considered  as  a  settled  rule  of  the  law 
of  partnership,  in  England  and  in  this  country,  that  the  retire- 
ment of  any  one  partner  from  a  firm  consisting  of  any  number  of 
partners  operates  a  dissolution  of  that  firm.  The  Institute  says, 
"  Cum  allquis  renunciaverit  socletati,  solvitur  societasT  (^ci)  In 
Roman  practice,  mercantile  copartnerships  consisting  of  many 
partners,  if  not  common,  were  certainly  known.  Only  of  late 
years  has  this  rule  been  asserted ;  and  it  was  qualified  by  Lord 
Eldon,  who  was  almost  its  author,  and  ever  was  its  highest  author- 
ity, by  the  phrase,  "  unless  it  was  otherwise  provided."  (5)  We 
apprehend,  however,  that  the  rule  comes  of  necessity  from  the 
very  nature  of  partnership,  and  admits  of  no  qualification  what- 
ever. Thus,  if  we  take  the  qualification  mentioned  by  Lord  Eldon, 
—  that  of  an  express  provision  to  the  contrary,  —  it  is  plain  that, 
even  if  it  is  so  provided,  the  remaining  partners  can  only  form  a  new 
partnership.  The  qualification  is,  therefore,  equivalent  to  saying, 
that  the  old  partnership  is  dissolved  unless  a  new  one  is  formed  ; 
which  is  meaningless.       We  suppose  the  truth  to  be,  that  if   a 

(a)  Inst.  L.  3,  t.  26,  §  5  ;  Potluer  on  (h)  Cravvshay  v.  Collins,  15  Ves.  228  ; 

Part.  ch.  8,  §  3,  p.  141.  Peacock  v.   Peacock,    16   Ves.   49  ;  Howe 

V.  Thayer,  17  Pick.  95. 


§  312.]        OF  A  CHANGE  IN  THE  PARTNERSHIP.         ,   399 

partner  retires,  —  whether  by  voluntary  act,  bankruptcy,  expulsion, 
or  death,  or  if  a  new  partner  comes  in,  by  any  means  whatever, — 
in  either  of  these  cases,  the  old  partnership  ceases  to  exist,  (c) 

Where  a  mortgage  was  given  to  a  firm  consisting  of  "  A.  and 
B."  to  secure  advances  to  the  mortgagor,  and  a  third  partner  was 
taken  in,  and  the  name  changed  to  "A.,  B.,  and  Co.,"  and  the 
business  was  continued  and  conducted  precisely  as  before,  it  was 
held  that  this  addition  dissolved  the  first  firm,  and  that  the  new 
firm  could  not  avail  themselves  of  the  mortgage,  {cc)  ^ 

§  312.  Old  Partnership  cannot  continue  to  Exist.  —  This  rule 
is  directly  opposed  to  a  common  practice,  and,  perhaps,  to  a  com- 
mon understanding.  We  have  in  this  country  many  ancient  firms, 
in  which  there  may  not  be  one  person  who  was  a  partner  from 
the  beginning.  In  England,  there  are  firms  which  have  survived 
some  generations;  (c^)  but  the  name  has  never  been  changed,  and 
the  l)u.siness  has  gone  on  without  deviation  or  interruption.  But 
we  still  say  that  the  partnership  is  dissolved  by  every  change, 
because  every  partnership  consists  of  certain  persons  who  are  all 
liable  for  the  debts,  who  all  own  a  certain  joint  property,  and  who 
all  have  certain  powers  to  act  for  and  to  bind  each  other.  Those 
who  owe  the  firm  owe  only  them,  and  those  to  whom  the  firm  is 
indebted  have  claims  only  on  them.  If  from  this  partnership  any 
persons  go  out,  or  if  any  come  into  it,  and  the  old  partners  and 
the  old  debtors  and  creditors  agree,  there  will  be  the  least  possible 
break  to  the  succession.  But  this  agreement  no  more  makes  the 
old  firm  identical  with  the  new,  than  the  son's  inheritance  of  his 
father's  property,  coupled  with  an  accepted  promise  to  be  respon- 
sible for  all  his  debts,  makes  the  son  the  same  individual  with  the 
father.  That  this  mere  agreement,  however  effectual  in  sustaining 
and  continuing  a  businesb,  cannot  preserve  the  identity  of  the  old 
partnership,  may  be  seen  from  this  supposition  :  If  A.,  B.,  &  C. 
have  for  a  long  time  been  partners,  and  conclude  to  retire,  and  D., 
E.,  &  F.  say  to  them,  It  is  a  pity  to  scatter  so  profitable  a  business 
and  lose  so  good  a  custom,  and  we  will  buy  your  good-will,  and 

(c)  Yulliamy  v.  Noble,  3  Meriv.  614  ;  Union  Ins.  Co.,  1  Xott  &  McC.  559.     See 

Crawshay    v.     Maule,    1     Swanst.    509  ;  post,  §  353  et  seq. 

Crawford     v.    Hamilton,    3  Madd.    251 ;  (cc)  Abat  v.  Penny,  19  La.  Ann.  289. 

Scholefield   v.  Eichelberger,   7  Pet.  586  ;  (d)  See   Blisset   v.  Daniel,    10    Hare, 

Dyer   v.   Clark,    5   Met.  575  ;    Washburn  493. 
V.    Goodman,    17    Pick.    519  ;    White    v. 

1  So  where  one  partner  gave  the  use  of  his  property  to  a  firm,  and  afterwards 
retired,  the  right  to  use  the  [)roperty  ceased  ;  and  an  assignee  of  all  the  assets  of  the 
remaining  partners  had  no  right  to  the  property.  Rapier  v.  Gulf  City  Paper  Co.,  64 
Ala.  330.     See  in  re  Beck's  Estate,  19  Ore.  503,  24  Pac.  1038  ;  post  §  342. 


400  THE   LAW   OF   PARTNERSHIP.  [CH,  XIIT. 

take  all  your  stock,  and  pay  all  your  debts,  and  hold  by  assign- 
ment all  the  debts  due  to  you,  and  bring  to  you  the  consent  of  all 
your  debtors  and  creditors,  —  one  would  hardly  say,  that  the  old 
firm  continued  over,  or  was  identical  with  the  new  one.  One  firm 
succeeds  the  other  ;  and,  if  the  later  firm  chooses  to  adopt  the 
name  of  the  earlier,  this  does  not  make  them  one  and  the  same. 
And,  if  one  member  of  the  old  firm  comes  into  the  new  firm,  this 
does  not  make  them  one.  And  if  all  remain  but  one,  or  all  remain 
and  a  new  one  is  added,  here  also  is  a  new  firm,  which  can  no 
more  have  the  effects,  and  choses  in  action  of  the  old,  nor  be 
liable  for  its  debts,  without  a  new  and  distinct  agreement  between 
all  parties  interested  therein,  than  if  the  change  were  entire,  and 
the  name  also. 

We  have  dwelt  the  more  strongly  on  this  principle,  —  and  shall 
have  occasion  to  refer  to  it  again, —  because  a  disregard  of  it  has 
led  to  some  confusion  in  the  authorities  in  relation  to  the  rights 
and  obligations  of  a  retiring  partner,  and  of  an  incoming  partner, 
—  a  suljject  which  we  shall  now  proceed  to  consider. 


SECTION    ir. 

OF   A    RETIRING   PARTNER. 

§  313.  Liability  of  Partner  after  Retiring.  —  The  right  of  a 
partner  to  retire  is  the  same  thing  as  the  right  to  dissolve  a  partner- 
ship ;  because  retirement  is  dissolution.  This  we  have  already  con- 
sidered ;  and  it  has  also  been  stated,  that  he  may  retire  in  either 
of  many  ways.  The  effect  of  the  retirement  (excepting  so  far  as 
mutual  agreements  vary  it)  is  nearly  the  same  in  all.  He  neither 
loses  property  by  it,  nor  relieves  himself  from  any  liability.  (/)  ^ 

(/)  But  see  Savage   v.   Rockwell,  32  N.  Y.  501. 

1  Each  partner  continues  liable,  after  dissolution,  upon  all  contracts  of  the  firm 
made  before  dissolution.  Dickson  v.  Indianajiolis  Cotton  Mfg.  Co.,  63  Ind.  9  ;  Good- 
epeed  v.  Wiard  Plow  Co.,  45  Mich.  322,  7  N.  W.  902.  Thus  where  before  dissolu- 
tion a  firm  of  attorneys  received  a  note  to  collect,  a  partner  is  liable  for  the  note  or 
its  proceeds  after  dissolution,  though  the  note  was  collected  and  the  proceeds  converted 
ifter  dissolution  by  the  other  partner.  Waldeck  v.  Brande,  61  Wis.  579,  21  N.  W. 
533.  Similarly,  where  one  is  requested  before  the  dissolution  of  a  fii'm  to  pay  its 
iebta,  each  partner  is  liable  to  him  for  a  payment  made  after  dissolution.  Lee  v. 
Stowp,  57  Tex.  444. 

If  after  dissolution  the  settling  partner  gives  a  note  whether  in  the  firm  name  or  in 
^lis  own,  for  a  firm  debt,  the  liability  of  the  other  partner  is  not  discharged.  Gardner 
').  Conn,  34  Oh.  St.  187  ;  Lutterloh  v.  Mcllheuny  Co.,  74  Tex.  73,  11  S.  W.  1063  ; 
White  V.  Boone,  (Tex.)  12  S.  W.  51. 


§  314.]  OP    A    CHANGE   IN   THE   PARTNERSHIP.  401 

If  he  retires  with  the  consent  of  the  other  partners,  there  is  an 
implied  promise  on  their  part  to  pay  the  debts  of  the  firm  and 
save  him  harmh'ss,  but  only  to  the  extent  of  the  assets  of  the 
firm.  PJe  is  still  liable  in  solido  for  the  debts  existing  when  he 
retired.  But,  if  he  pays  more  than  his  proportion,  he  may  have 
contribution  fi'oni  his  former  copartners,  (./f) 

§    314.    Sale  of    Interest    by    Retiring    Partner.  —  If     a   partner 

"  sells  out,"  —  to  use  a  common  phrase,  —  either  to  the  remaining 
partners,  ((/)  or  to  a  stranger,  the  question  may  arise  whether,  in 
addition  to  what  he  actually  transfers,  he  comes  under  any 
obligation  which  a  court  of  law  or  of  equity  could  recognize.  Not 
nnfrequcntly,  the  articles  of  copartnership  provide  that  the 
remaining  partners  may  take  the  interest  of  an  outgoing  partner 
at  a  valuation,  or  they  prescribe  other  terms  ;  and  these  agree- 
ments a  court  of  equity  will  enforce,  (c/g}  [Whether  the  selling 
partner  may  establish  a  new  business  in  the  same  locality  has 
already  been  considered.^]  The  answer  of  the  law  is,  that  he  may 
do  this  very  thing,  with  an  exception,  perhaps,  as  to  the  use  of 
the  old  name.  In  other  words,  the  purchasers  of  a  partner's 
shai-e  in  the  property,  and  the  "  plant "  (as  it  is  called  in  Eng- 
land), buy  the  good-will  attached  to  the  merchandise,  but  do  not 
purchase  from  him  any  obligation  not  to  lessen  the  value  of  what 
they  buy  by  his  interference  with  it,  unless  there  be  an  express 
stii)ulation  to  that  effect.  Then  this  bargain  "  in  restraint  of 
trade,"  as  it  is  called,  would  be  governed  by  precisely  the  same 
principles  in  the  case  of  a  retiring  partner  as  if  it  were  a  sale  of  a 
business  by  a  sole  trader  to  a  stranger.  These  principles  are  now 
established  with  a  considerable  degree  of  precision.  A  promise 
on  a  consideration,  not  to  carry  on  a  certain  trade  within  cer- 
tain   limits,  is  valid,,  at    law  as  well    as    in   equity,  (i)     But  a 

{/)  Hobbs  V.  Wilson,  1  W.  Va.  50.  Barrett,  1  Pick.  443  ;  Nobles  v.  Bates,  7 

(g)  As  to  liow  the  remaining   partner  Cow.     307 ;    Chappel     v.     Brockway,    21 

takes,  see  Dimon  v.  Hazard,  32  N.  Y.  65.  Wend.   157  ;  Jarvis  v.  Pe'ek,   1  Hoff.   Ch. 

{gg)  Quinlivan  u.  English,  42  Mo.  362.  479;   Grasselli  v.  Lowden,    11   Ohio   St. 

(t)   Broad    v.   Jollyfe,  Cro.    Jac.    596  ;  349.     The  cases  show  a  gradnal  enlarge- 

Mitchell   V.  Reynolds,    Fortescne,    296,   1  ment  of  the  rule  which  prohibits  contracts 

P.  Wnis.   181  ;  Davis  v.  Mason,    5  T.   R.  in  restraint  of  trade,  until  at  the  present 

118;  Bunn  w.  Guj',   4  East,  190;  Gale  y.  day — at  least   in  this  country  —  almost 

Reed,   8  East,   80  ;  Bryson  v.  Whitehead,  anything  in   the  contract  which   can   be 

1  Sim.  &  S.  74 ;  Young  v.  Timmins,  1  Cr.  construed  as  a  limitation  of  it  is  deemed 

&  J.  331  ;  Proctor  v.  Sargent,  2  M.  &  G.  sufficient   to   take    it    out    of    the    rule. 

20  ;  Hilton  v.  Eckersley,  6  E.  &  B.  47  ;  Thus,   in    Stearns    v.    Barrett,    supra,    a 

Pierce  v.  Fuller,  8  Mass.  223 ;  Stearns  v.  promise  not   to  use  certain   machines  in 

I  Ante,  §§  181,  182. 
26 


402  THE   LAW    OF   PARTNERSHIP.  [CH.    XIII. 

general  promise  not  to  carry  on  a  certain  trade  anywhere,  is  void 
as  against  the  policy  of  the  law.  (j  )  The  courts  of  England,  and 
still  more  of  this  country,  are  quite  liberal  in  the  application  of  this 
rule  ;  and  almost  any  limits  are  sufficient.  It  may  be  added  that 
the  contract  of  sale  by  a  retiring  partner  might  contain  such 
phrases  as,  "  I  being  about  to  change  my  business,"  or  "  intending 
to  give  up  all  business,"  or  other  words  so  distinctly  indicative  of 
his  purpose  not  to  interfere  with  the  fullest  enjoyment  of  what  he 
sells,  that  a  court  of  equity  would  either  construe  this  as  a  con- 
tract to  that  effect,  or  as  a  fraudulent  deception  by  the  seller,  and 
on  one  or  other  of  these  grounds  restrain  him  from  injurious  inter- 
ference, although  there  might  not  be  enough  in  the  contract  to 
sustain  an  action  at  law  for  the  breach  of  it.  (/:) 

§  315.  Notice  of  Retirement. — Much  the  most  important  ques- 
tion in  relation  to  a  retiring  partner,  is,  by  what  means  and  to 
what  extent  he  may  terminate  his  liability  for  the  debts  of  the 
partnership,  so  that  it  shall  attach  to  no  new  obligations  ;  and  how 
he  may  escape  from  his  liability  for  existing  obligations.(?) 

To  the  first  question,  the  immediate  and  general  answer  is,  he 
must  give  notice  of  this  retirement,  and  cannot  be  held  as  a  part- 
ner for  any  new  obligation,  by  those  who  have  this  notice  of  dis- 
solution or  of  retirement;  (11}  nor  by  those  aaIio  have  knowledge 
thereof,  however  communicated.  (Z//)  But  many  nice  questions 
have  arisen  under  the  application  of  this  rule.  (??t) 

any  of  the  United  States,  except  Massa-  gather.     Cooper  v.  AYatson,  3  Dong.  443, 

chusetts  and  Rhode  Island,  was  held  good,  2  Chitty,  451. 

because  "  agreements  to  restrain  trade  in  {I)  See  ante,  §  299.     And  see  Park  v. 

particular  places  are  valid  in  law,  and  may  Wooten,     35    Ala.     242  ;     Williams     v. 

be  enforced."  Bowers,   15  Cal.   321.     One  partner  may 

(j)  Alger  V.  Thacher,  19  Pick.  51  ;  a  exempt  himself  from   future  liability  by 

leading   case,    which    fully    presents    the  giving  express  previous  notice  that  he  will 

earlier  authorities,  English  and  American  ;  not   be    bound.     Matthews    v.    Dare,    20 

Hilton  V.  Eckersley,  6  E.   &  B.   47.     See  Md.  273.     See  Am.  Linen  Thread  Co.  v. 

also   Jones    v.    Lees,    1    H.    &    N.    189;  Wortendyke,  24  N.  Y.  550  ;  Spaulding  y. 

Dunlop  V.  Gregor}%   10  N.  Y.  241  ;  also,  Ludlow  Woolen  ]\Iill,  36  Vt.  150. 
cases  cited  in  preceding  note.  (i^)  Robb    v.    Mudge,    14   Gray,    534  ; 

(k)  The  obligation  of  the  retiring  part-  Lange  v.  Kennedy,  20  Wis.  279. 
ner  is  frequently  deterraitied  by  the  Ian-  (III)  Davis  v.  Keyes,  38  N.  Y.  94. 

guage   of   the   articles,   or   in   some  such  (m)  See  Vice  v.  Fleming,  1  Y'onnge  & 

way.     Thus,  where  it  was  provided  that,  J.  227  ;  Willis  i\  Dyson,   1   Stark.   164  ; 

on  giving  notice,  either  party  should  have  Rooth  v.   Quin,  7  Price,  193  ;  Galway  v. 

liberty  "  to  quit  the  trade  and  mystery  of  Matthew,   1   Camp.    464,    10   East,    203; 

a  brewer,"  and  the  other  might  continue  Godfrey   v.   Turnbnll,   1   Esp.  371  ;    Abel 

the  trade  upon  his  own  account,  it  was  v.  Sutton,  3  Esp.   108  ;  Kilgour  v.  Finly- 

held,   that   the  party  leaving  could  not  son,  1  H.  Bl.   155  ;  Bernard  v.  Torrance, 

engage  in  the  brewery  trade  on  his  own  5  Gill  &  J.  383. 
account,  but  was  bound  to  quit  it  alto- 


§  316.]  OP    A    CHANGE    IN    THE    PARTNERSHIP.  403 

Tlie  reason  of  the  rule  is  perfectly  obvious.  They  whom  he 
authorizes  to  think  liini  a  partner  may  hold  him  as  such  ;  and 
being  a  partner,  and  being  known  as  a  partner,  he  authorizes  all 
to  think  him  so  who  do  not  know  that  he  has  ceased  to  be  one.  If 
wo  supi)ose  no  fraud  on  his  part,  there  is  negligence  on  his  part ; 
and,  of  two  innocent  persons,  he  should  suffer  whose  negligence 
caused  the  error.  (/<)^ 

§  31 G.  Notice  how  Given. — The  Commercial  world  fully  recog- 
nizes this  necessity  of  notice  ;  and  the  custom  of  giving  it  is  uni- 
versal. Sometimes  personal  notice  is  given  orally,  or,  which  is 
better,  by  letter  to  all  who  deal  with  the  concern  ;  sometimes  by 
advertisement;  sometimes  only  by  a  change  of  name  upon  the 
signs  of  the  firm,  and  sometimes  by  a  change  in  the  name  of  the 
firm  itself  ;  sometimes  by  all  these  methods  together.  In  this 
country,  much  the  most  usual  methods  are  advertisement,  with  a 
change  in  the  names  upon  the  sign  ;  (o)  in  addition  to  this,  notice 

(?;.)   Parkin  v.  Carrntlicrs,  3  Esp.  246  ;  City   Bank    v.    Howard,  35  N.    Y.    500  ; 

Williams  v.  Keats,   2  Stark.   290  ;   Brown  Ennis  v.  Williams,  30   Ga.  691  ;  Parsley 

V.   Leonard,   2  Cliitty,    120  ;  Newsome  v.  v.  Ramsey,  31  Ga.  619  ;  Ellis  v.  Broiison, 

Coles,  2  Camp.  617  ;  Dolman  v.  Orchard,  40  111.  455  ;  Denman    v.   Dosson,   18  La. 

2  C.  &  P.  104  ;  Carter  v.  Whalley,   1  B.  Ann.  9  ;  Zollar  v.  .lanvrin,  47  N.  H.  324. 
&  .\d.   11  ;  Tombeckbee  Bank  v.  Dumell,         (o)  See  Wrightson   v.  Piillan,   1   Stark. 

5  Mason,  56  ;  Lansing  v.  Gaine,  2  Johns.  375,  called  Wright  v.  Pulham,  2  Chitty, 

3(10  ;    Ketcham    v.   Clark,   6  Johns.    144,  121  ;    Watkinsou   v.    Bank    of   Penn,,    4 

148  ;    Le  Roy    v.    Johnson,    2    Pet.    198,  Whart.  432  ;    Prentiss   v.  Sinclair,  5  Vt. 

200;    Princeton    &   K.    Turnpike   Co.    v.  149;    Graves    v.    Merry,    6    Cowen,    701; 

Gulick,   16  N.  J.   (1   Har.)   161  ;  Butfalo  Ketcham  u.  Clark,  6  John.s.  144,147. 

^  Notice  of  dissolution  of  copartnerhip  must  ordinarily  be  given  in  order  to  protect 
a  retiring  partner  from  subsec|uent  liability  upon  contracts  made  in  the  name  of  the 
firm.  A  retiring  partner  remains  liable  to  those  who  have  not  had  sufficient  notice 
of  the  dissolution.  Duff  v.  Baker,  78  La.  642,  43  N.  W.  463  ;  Stimson  v.  Whitney, 
130  Mass.  591  ;  Hixon  v.  Pixley,  15  Nev.  475  ;  Clement  v.  Clement,  69  Wis.  599,  35 
N.  W.  17. 

This  is  on  the  ground  of  estoppel.  The  retiring  partner  is  not  really  a  partner  after 
dissolution.  If  he  lends  money  to  the  continuing  partner  he  is  a  mere  creditor,  and 
may  compete  with,  the  other  creditors  in  insolvency,  or  even  receive  a  preference. 
Richardson  v.  Davis,  (Miss.)  11  So.  790.  Therefore  where  defendant  retired  from  a 
firm  and  another  was  admitted,  and  goods  were  sold  by  an  old  customer  to  the  new 
firm  before  notice,  and  the  check  of  the  new  firm  received  after  notice,  and  dishonored, 
it  was  held  that  the  creditor  had  the  option,  either  to. hold  the  old  firm,  including  the 
defendant,  on  the  ground  of  estoppel,  or  the  new  firm  without  defendant,  but  could  not 
hold  both  defendant  and  the  new  firm  ;  and  he  having  sued  the  new  firm,  defendant 
was  discharged.     Scarf  v.  Jardine,  7  App.  Cas.  345. 

Notice  is  not  necessary  in  cases  where  the  dissolution  is  by  act  of  law.  Thus,  no 
notice  need  be  given  of  dis.solution  by  bankruptc}' ;  all  persons  must  take  notice  of 
that.  Eustis  v.  Bolles,  146  Mass.  413,  16  N.  E.  286.  So  of  dissolution  by  war. 
Griswold  v.  Waddington,  15  Johns.  57,  16  Johns.  438  ;  Bank  of  New  Orleans  v. 
Matthews,  49  N.  Y.  12.     As  to  dissolution  by  death,  see  post,  §  323  et  seq. 


404  THE    LAW    OF    PARTNERSHIP.  [CH.    XIII. 

bv  letter  is  frequently  given  to  the  customers  of  the  firm.  If  a 
change  is  made  in  the  name  of  the  firm,  this  is  the  most  effectual 
of  all.  Indeed,  if  it  be  a  change  which  leaves  out  the  name  of  the 
retiring  partner,  it  would  be,  of  itself,  nearly  sufficient  and 
decisive.  For  every  new  contract  would  be  in  the  name  of  a  firm 
of  which  he  never  was  a  member ,  and,  if  the  change  is  l)y  droj)- 
ping  his  name,  it  would  seem  to  be  complete  notice.  It  is  true, 
however,  that  a  partner  may  be  not  named ;  and  it  may  be  true 
that  a  partner  who  has  been  active  and  known  may  wish  to  be- 
come silent  and  unknown,  and  therefore  wish  his  name  dropped. 
In  such  case,  he  would  still  be  liable ;  and  therefore  he  would  be 
liable  if  the  circumstances  connected  with  his  sup])osed  responsi- 
bility justified  strangers  or  customers  in  believing  this  to  be  the 
case,  (p) 

§  317.  Difference  as  to  Notice  bet'wreen  Old  and  Ne-w  Cus- 
tomers. —  An  important  distinction  is  made  between  those  who  are 
customers  of  the  firm,  or  who  have  dealt  with  it  as  having  the  re- 
tiring partner  among  the  partners,  and  those  who  are  only  new 
customers,  beginning  their  dealings  with  the  firm  after  the  retire- 
ment.^     For  a  new  customer  holds,  generally,  only  those  who  are 

{p)  3  Kent  Comm.  Lect.  43,  p.  67  ;  ed.  ;  Watson  on  Part.,  eh.  7,  p.  384  ;  2 
Gow  on  Part.,  ch.  5,  §  2,  pp.  248-251,  3d     Bell  Comm.,  b.  7,  pp.  460-643,  5th  ed. 

1  Notice  to  former  customers. — As  to  all  tliose  who  have  dealt  with  the  firm  before 
dissolution,  there  must  be  actual  notice  of  tlie  withdrawal  of  a  partner  to  ])rotect  liim 
from  liability.  Moline  Wagon  Co.  v.  Hummell,  12  F.  R.  658,  14  F.  R.  155  ;  Bloch 
V.  Price,  32  F.  R.  562  ;  Nicholson  v.  Moog,  65  Ala.  471  ;  Joseph  v.  Sonthwark  Foundry 
&  Mach.  Co.  (Ala.),  10  So.  327  ;  Richards  v.  Hunt,  65  Ga.  342  ;  Meyer  v.  Krohn, 
114  111.  574,  2  N.  E.  495  ;  Strecker  v.  Conn,  90  Ind.  469;  Iddings  v.  Pierson,  100 
Ind.  418  ;  Rose  v.  Coffield,  53  Md.  18  ;  Sibley  v.  Par.sons  (Mich.),  53  N.  W.  786; 
Martin  v.  Fewell,  79  Mo.  401  ;  Stoddard  Mfg.  Co.  v.  Krause,  27  Neb.  83,  42  N.  W. 
913  ;  Nat.  Shoe  &  Leather  Bank  v.  Herz,  89  N.  Y.  629  ;  Long  v.  Garnett,  59 
Tex.  229  ;  Gilchrist  v.  Brande,  58  Wis.  184,  15  N.  W.  818.  Direct  notice  to  tlie 
customer  is  not  re(|uired  ;  if  he  had  knowledge  of  the  withdrawal,  by  whatever  means, 
it  is  enough.  Uhl  v.  Bingaman,  78  Ind.  365  ;  Backus  i-.  Taylor,  84  Ind.  503.  The 
number  of  former  transactions  between  firm  and  customer  are  immaterial  ;  a  single 
previous  dealing  with  the  firm  entitles  the  one  so  dealing  to  actual  notice  of  dissolu- 
tion. Bloch  V.  Price,  32  F.  R.  562.  But  see  Rocky  Mountain  Nat.  Bank  v.  McCas- 
kill,  16  Col.  408,  26  Pac.  821.  Receipt  of  notice  by  the  customer  must  be  proved. 
It  is  not  enough  to  prove  that  a  written  notice  was  mailed  to  him.  Meyer  i'.  Krohn,  114 
111.  574,  2  X.  E.  495.  Notice  given  to  the  agent  with  whom  the  contract  sued  on  was 
made  is  sufficient.  Hunt'?;.  Colorado  Milling  &  Elevator  Co.,  1  Col.  App.  120,  27  Pac. 
873.  Where  after  dissolution  a  former  customer  continued  to  do  business  with  the 
continuing  partner,  and  received  in  yiayment  checks  signed  by  him  individually,  it 
was  held  sufficient  notice  of  dissolution.     Kehoe  v.  Carville  (la.),  51  N,  W.  166. 

Notice  to  the  world. — It  is  obviously  impossible  to  give  actual  personal  notice  of 
withdrawal  to  all  the  world  ;  but  in  order  to  escape  future  liability  a  retiring  partner 
must  take  measures  to  make  public  the  fact  of  his  withdrawal.  If  he  takes  pro]>er 
measures  of  this  sort,  he  is  held  to  have  given  sufficient  notice  of  withdrawal  to  all  the 


§  317.J         OF  A  CHANGE  IN  THE  PARTNERSHIP.  405 

actually  partners ;  because  he  has  no  past  dealings  to  furnish  a 
foundation  for  the  belief  that  the  retiring  member  is  a  partner. 
To  this  rule  there  are  exceptions.  Precisely  as  one  who  buys  for 
the  first  time  has  a  valid  claim  on  a  party  who  by  his  own  act  or 
consent  is  held  out  as  a  jjartner,  although  he  is  not  one,  so  a  new 
customer  of  an  old  firm  may  sell  to  it  on  the  credit  of  one  who  has 
long  been  known  as  a  partner,  and  whose  retirement  has  been  kept 
secret.  This  credit  would  appear  to  be  justified  by  the  retiring 
partner,  and  therefore  would  hold  him.  But  it  would  seem  that 
the  notice  which  would  destroy  this  credit  with  new  customers  is 
quite  different  from  that  which  would  have  this  effect  upon  old 
customers.  Perhaps  a  general  rule  may  be  stated  thus  :  In  re- 
spect to  persons  who  have  had  dealings  with  the  firm,  it  is  neces- 
sary to  show  either  notice  to  them  of  a  dissolution,  {q)  or  actual 
knowledge  on  their  })art,  or,  at  least,  adecpiate  means  of  knowl- 
edge, of  the  fact,  (r)     And,  as  to  those  who  have  not  been  dcal- 

(7)  Conro  v.  Port  Henry  Iron  Co.,  12  Humiih.    418;    Deford    v.    Reynolds,    36 

Barb.  54  ;    Graves  v.  Merry,  6  Cow.  701  ;  Pa.   325  ;    Scheifflin   v.   Stevens,   1   Wins. 

Ketchara  v.  Clark,  6  Johns.  144  ;  Chipp  r.  No.  1,  106. 

Rogers,  12  N.  Y.  283  ;    Magill  v.  Merrie,  (,-)  See  mfra.    And  see  Reilly  v.  Smith, 

5   B.   Mon.  168  ;    Pope  v.  Risley,  23  Mo.  16  La.   Ann.   31  ;    Williamson  v.  Fox,  33 

185;    Hutchiiis    v.     Bank    of    Tenn.,    8  Pa.   214;   Vernon  v.  iManhattan   Co.,   17 

world  except  former  customers.     Joseph  v.  Sonthwark  Foundry  &  Machine  Co.  (.lla.), 

10  So.  327  (scmble)  ;  Rocky  Jlountain  Xat.  Bank  v.  McCaskill,  16  Col.  408,  26  Pac. 
821  (semble);  Richardson  v.  Snider,  72  Ind.  425. 

The  common  method  of  giving  notice  i.s  by  publication  in  a  newspaper  ;  which  is 
usually  sufficient.  In  re  Frazer,  [1892]  2  Q.  B.  633  ;  Rose  v.  Coffield,  53  Md.  18 
(semhle)  ;  Polk  v.  Oliver,  56  Miss.  566  ;  Stoddard  Mfg.  Co.  v.  Krause,  27  Neb.  83,  42 
N.  W.  913.  The  newspaper  must,  however,  be  one  circulating  in  the  vicinity. 
Richards  v.  Butler,  65  Ga.  593.  And  it  must  be  one  of  general,  not  limited  circula- 
tion, and  published  a  reasonable  number  of  times.     Ellison  v.  Sexton,  105  N.  C.  356, 

11  S.  E.  180.  Equity  has  jurisdiction  to  compel  a  partner  to  sign  a  notice  of  with- 
drawal for  publication.    Hendry  v.  Turner,  32  Ch.  D.  355. 

Though  publication  of  notice  is  the  common  method  by  which  a  retiring  partner 
is  protected,  it  is  not  the  only  way.  Anything  is  sufficient  which  makes  knowledge 
of  the  withdrawal  public.  Polk  v.  Oliver,  56  Miss.  566.  Therefore,  general  notoriety 
is  a  fact  to  be  considered  by  the  jury.  Lovejoy  v.  Spafford,  93  U.  S.  430  ;  Central 
Nat.  Bank  v.  Frye,  148  Mass.  498,  20  N.  E.  325.  Whether  the  fact  is  sufficiently 
public  is  in  a  doubtful  case  a  question  for  the  jury.  Polk  v.  Oliver,  56  Miss.  566. 
Merely  ceasing  to  hold  out  one's  connection  with  the  business  (as  by  advertising)  is 
not  enough.  Uhl  v.  Harvey,  78  Ind.  26.  Public  change  in  the  firm  name  by  dropping 
the  name  of  one  partner  may  be  ;  but  not  a  change  of  name  which  does  not  consist  of 
dropping  the  partner's  name,  for  instance,  from  "Davis  Creamery"  to  "  Beloit 
Creamery."  Coggswell  r.  Davis,  65  Wis.  191,  26  N.  W.  557.  Organization  of  a 
partnership  into  a  corporation  is  not  notice  of  dissolution,  if  the  two  could  possibly 
co-exist.  First  Nat.  Bank  v.  Conway,  Q7  Wis.  210,  30  N.  W.  215.  In  Elverson 
V.  Leeds,  97  Ind.  336,  where  a  sole  trader  carried  on  business  as  "  Leeds  &  Co.,"  it 
was  held  that  upon  selling  out  to  another  he  must  give  notice,  like  a  retiring  partner 
But  see  Gathright  v.  Burke,  101  Ind.  590. 


406  THE    LAW    OF    PARTNERSHIP.  [CH.    XIII. 

ers,  a  retiring'  partner  can  exonerate  himself  from  lial)ilitv  by 
publishing  notice  of  the  dissoliition,(.s')  or  by  showing  knowledge 
of  the  fact.  A  notice  by  public  advertisement,  in  a  usual  way  and 
to  a  usual  extent,  or  any  notice  which,  under  the  circumstances, 
■was  equal  to  a  public  advertisement,  would  always  be  sufficient  to 
protect  the  retiring  j)artner  against  new  customers ;  (^)  because  it 
is  obviously  impossible  for  him  to  know  who  may  thereafter  deal 
with  that  firm.  But  he  does  know  or  may  know  who  have  dealt 
Avith  it,  and  may  make  it  sure  that  they  have  notice  ;  and  therefore 
it  is  his  duty  to  make  this  certain,  and  he  takes  upon  himself  tlie 
risk  of  their  ignorance.  Mr.  Justice  Story  appears  to  go  so  much 
further  as  to  hold  that  no  new  customers  can  hold  the  retiring- 
partner,  unless  he  permits  his  name  to  be  used  by  the  old  firm, 
although  he  gives  no  notice  whatever.  But,  in  this  remark,  he 
goes  somewhat  beyond  the  prevailing  authorities.  And,  in  his 
note  to  the  passage,  he  seems  to  apply  his  rule  only  to  new  cus- 
tomers who  do  not  know  who  were  the  old  partners,  or  who  had 
no  reason  to  believe  the  retiring  partner  to  have  becm  and  still  to 
be  one.  And  such  new  customers  could  not,  of  course,  hold  a 
retiring  partner.  A  considerable  lapse  of  time  between  the  retire- 
ment, and  the  contracting  of  the  new  debt,  would,  of  course,  go 
very  far  to  show  that  it  was  not,  or  should  not  have  been,  con- 
tracted on  the  credit  of  the  retiring  ]iartners.(?/) 

§  318.  Actual  Knowledge  equivalent  to  Notice.  —  Notice  is  in- 
tended to  give  knowledge  ;  and  therefore  knowledge,  however 
acquired,  generally  renders  notice  unnecessary,  and  protects  a 
retiring  partner  who  has  done  nothing. (r)   Whether  a  person  has 

"Weml.  526,  22  Wentl.  183  ;  Watkinson  v.  Clapp  r.  Rogers,  12  X.  Y.  283  ;  Magill'r. 

Bank  of  Peini.,  4  AVhart.  482  ;    Mitchum  Merrie,  5  B.  Moii.  168;  Siinonds  v.  Strong, 

V.  P)nnk  of  Ky.,  9  Dana,  166  ;  MauUlin  v.  24  Vt.  642. 

Bank  of  MoMle,  2  Ala.  502  ;  Coddington  (t)  Minnit  v.  AVhinner}',  5  Bro.  P.  C. 
V.  Hunt,  6  Hill.  595;    Goddard  v.  Pratt,  *  489,    2   id.    (Dublin    ed.)'^  323;    Ahel   r. 

16  Pick.  431,  434;   Ex  parte  Burton,   1  Sutton,  3  E.sp.  108;  Wrightson  v.  Pullam, 

Gill  &  J.  207  ;   Ex  pnrte  Leaf,  1  Deacon,  1  Stark.  375,  called  Wright  v.  Pull,am,  2 

176  ;   Shurlds  v.  Til.son,  2  McLean,  458  ;  Chitty,  121  ;    Kilgour   v.  Finlyson,  1  H. 

Prentiss  v.  Sinclair,  5  Vt.  149  ;    Pitcher  Bl.   155  ;  Nott  v.   Downing,  6  La.   680  ; 

V.  Barrows,  17  Pick.  365.  Lan.sing  v.  Gaiue,  2  John.s.  300  ;  Shurlds 

(s)  Parkin  v.  Carruthers,   3  Esp.   248  ;  v.    Tilson,    2-  McLean,   458 ;    Mowatt   r. 

Gorhani  v.  Thompson,  Peake,  42;  Ander-  Rowland,  3  Day,  353;    Taylor  v.  Young, 

son  V.  Weston,  6  Bing.  X.  C.  296;  Graham  3  Watts,  339.     See  also  Deering  v.  Flan- 

i'.  Hope,  Peake,  154  ;  Bernard  v.  Torrance,  ders,  49  N.  H.  225. 

5  Gill  &  J.  383  ;  Lucas  v.  Bank  of  Darien,  (u)  See  Merrit  v.  Pollys,  16  R.  Mon. 

2  Stewart,  280  ;   Amidown  v.  Osgood,  24  355.     See  post,  §  322. 
Vt.  278  ;   Burgan  v.  Lyell,  2  Mich.   102 ;  (v)  Hart  v.  Alexander,  2  M.  &  \V.  484  ; 

Johnson  v.  Totten,  3  Gal.  343  ;    Davis  v.  Prentiss  t).  Sinclair,  5  Vt.  149;   Martin  v. 

Allen,  3  N.  Y.  168  ;  Princeton  Turnpike  Walton,  1  McCord,  16. 
Co.  V.  Gulick,  16  N.  J.  L.  (1  Har.)  161  ; 


§  318.] 


OF    A    CHANGE    IN    THE    PARTNERSHIP. 


407 


actual  knowledge  of  a  dissolution,  is  a  question  of  fact  for  the  jury, 
and  not  of  law  for  the  court.(2i;)  But  a  partner  who  actually 
retires  as  to  all  his  rights  and  interests  may  consent  to  leave  his 
name  in  the  firm,  or  to  a  use  of  it  by  the  old  partners  ;  and,  while 
he  thus  consents,  even  by  his  silence  alone,  if  he  knows  it,  he 
does  not  retire  as  to  his  responsibilities,  (x)  And  a  customer 
who  knows  that  he  has  retired  as  to  his  interests,  but  has  no 
notice,  and  has  no  notice  of  the  retirement,  may  be  led  to 
believe  that  notice  is  withheld  because  the  partner  intends  to  con- 
tinue responsible.  xVnd,  if  he  is  justified  in  this  belief  by  all  the 
circumstances,  however  erroneous  it  might  be,  the  mere  knowl- 
edge, on  his  part,  of  the  retirement,  without  notice,  would  hot 
prevent  him  from  holding  the  partner,  (y)  If  one  of  several  part- 
ners retires,  and  notice  thereof  is  given,  but  the  business  continues 


(lo)  Deford  v.  KeynoMs,  36  Pa.  325  ; 
Hart  V.  Alexander,  2  M.  &  W.  484  ; 
Hiitehius  v.  Sims,  8  Humph.  423  ;  .Merrit 
V.  Pollys,  16  B.  Mon.  355.  In  D.'fonl  v. 
Reynolds,  supra,  A.  &  B.,  under  the  style 
oF  A.  &  Co.,  had  done  business  for  some 
time  with  C.  &  Co.  In  April,  1853,  B. 
retired.  Prior  lo  this  time,  all  drafts 
drawn  l>y  C.  &  Co.  were  upon  the  firm  of 
A.  &  Co.,  and  their  letters  were  so  ad- 
dressed. But  from  the  time  of  the  dissolu- 
tion, C.  &  Co.  drew  on  A.  alone,  and  their 
letters  were  addressed  to  hiin  alone.  Their 
accounts  were,  however,  kept  with  A.  & 
Co.  until  December,  1853  ;  and  their  clerk 
testified  that  he  did  not  know  of  the  dis- 
solution until  this  time.  The  jury  found 
that  C.  &  Co.  were  ignorant  of  the  dissolu- 
tion ;  and  the  court  refused  to  set  asi<le 
the  verdict,  although  not  satisfied  with  it. 

In  Irby  v.  Vining,  2  MeCord,  379,  it  is 
said  to  be  sufficient  evidenci^  of  knowledge, 
if  such  circumstances  be  proved  as  to  leave 
no  rational  doubt  that  the  party  knew  of 
the  dissolution.  Actual  notice  is  neces- 
sary to  persons  theretofoi-e  dealing  with 
the  firm.  Denn)an  v.  Dosson,  19  La. 
Ann.  9  ;  Zollar  v.  Janvriu,  47  N.  H.  324  ; 
Kirk  man  v.  Snodgrass,  3  Head,  370  ; 
Austin  V.  Holland,  69  N.  Y.  571.  Actual 
knowledge,  however  obtained,  is  notice. 
Davis  V.  Keyes,  38  N.  Y.  94  ;  Young  v. 
Tibbetts,  32  Wis.  79  ;  Deering  v.  Flanders, 
49  N.  H.  225.  See  also  Tudor  v.  White, 
27  Tex.  584.  And  the  burden  of  proof 
of  notice  is  on  the  partner  denying  liability 
on  account  of  dissolution.     Kenney  v.  At- 


water,  77  Pa.  34.  It  may  be  inferred 
from  circumstances  ;  but  publication  in 
two  newspapers,  neither  of  them  published 
in  the  place  where  the  creditor  resides  or 
taken  by  him,  is  insufficient.  Howell  ;;. 
Adams,  68  N.  Y.  314.  Perhaps,  if  the 
papers  were  regularly  sent  to  the  creditor, 
the  notice  would  be  sufficient.  Rolierts 
V.  Spencer,  123  Mass.  397. 

(./•)  A  person  who  continues  to  act  as  a 
partner  after  dissolution,  is  liable  as  a 
partner.  Emmet  v.  Butler,  7  Taunt.  599; 
Mulfonl  V.  Griffin,  1  Fost.  &  F.  145;  Fuldo 
V.  Griffin,  1  Fost.  &  F.  147  ;  Ketcham  i\ 
Clark,  6  Johns.  144.  So  it  is  generally 
held  that  a  person  allowing  his  name  to 
remain  is  liable.  Parkin  v.  Carruthers,  3 
Es[).  248 ;  Williams  v.  Keats,  2  Stark. 
290  ;  Dolman  v.  Orchard,  2  0.  &  P.  104  ; 
Stables  v.  Elej^  1  C.  &  P.  614  ;  Amidown 
V.  Osgood,  24  Vt.  278  ;  [Nicholson  v. 
Jloog,  65  Ala.  471].  But  see  Jenkins  v. 
Blizard,  1  Stark.  418. 

In  Conro  v.  Port  Henry  Iron  Co.,  12 
Barb.  56,  the  court  said:  "The  continu- 
ance of  the  same  sign  on  the  store,  the 
form  of  the  bills  against  the  company,  not 
objected  to,  of  notes  and  receipts  given,  of 
notices  posted  in  the  name  of  the  company, 
contracts  made  in  the  company  name  by 
the  president  and  other  officers,  and  other 
acts  and  declarations  of  the  officers,  in- 
dicated a  continuance  of  the  business  on 
the  responsibility  of  the  company." 

(ll)  Thus,  in  Brown  v.  Leonard,  2 
Chitty,  120,  it  is  held,  that  a  partner  who 
gives  notice  that  he  has  ceased  to  be  a 


408  THE    LAW    OF   PARTNERSHIP.  [CH.    XIII. 

to  be  carried  on  as  before,  those  partners,  as  to  whom  no  notice 
is  given,  will  be  presumed  to  hold  the  same  relation  to  the  concern 
as  before.  (2) 

§  319.  Who  are  Former  Customers.  —  Whether  there  has  been 
a  previous  dealing  with  the  firm  —  that  is,  whether  a  plaintiff  had 
a  right  to  require  one  kind  of  notice,  or  only  another — is  some- 
times a  difticult  question.  That  the  dealing  must  be  with  the 
firm  directly,  and  not  merely  the  purchase  of  their  paper  for  a 
third  person,  is,  we  think,  evident. (a)  A  more  purchase  for 
cash  would  probably  not  be  enough. (i)  But  selling  goods  to  a 
firm  and  delivering  them,  to  be  paid  for  afterwards,  although  no 
term  of  credit  is  fixed,  would  make  the  sellers  dealers,  and  entitle 
them  to  notice,  (c)  So  a  bank  which  has  previously  been  in  the 
habit  of  discounting  not^s  and  bills  for  a  firm,  {d}  or  a  person  who 
has  been  in  the  habit  of  indorsing  for  a  firm,  (e)  or  of  lending  his 
note  to  it  for  its  benefit,  (/)  is  a  dealer.  As  a  general  rule,  pre- 
vious dealing,  which  would  entitle  a  person  to  notice,  most  be  dur- 
ing the  continuance  of  the  partnership  ;  but  in  one  case  where 
goods  had  been  delivered  after  dissolution,  but  before  any  publica- 
tion of  it,  at  the  store  formerly  occupied  by  the  old  firm,  in  which 
the  retiring  partner  still  remained,  though  in  the  capacity  of  a 
clerk,  and  the  old  sign  was  up,  it  was  held  that  the  seller  was  to 
be  considered  a  dealer,  and  entitled  to  notice.  (^) 

§  320.  Notice  of  Retirement  of  Dormant  Partner.  —  The  same 
principle  which  makes  this  distinction  between  new  customers 
and  old  customers  protects  a  dormant  or  unknown  partner  wlio 
retires  and  gives  no  notice  whatever.^     He  was  bound  for  any 

partner,  but  who  has  saiel  that  his  name  accommodation  notes.  The  first  note  was 
is  to  continue  for  a  certain  time,  is  liable  discounted  by  the  defendants,  and  re- 
to  a  person  to  whom  such  notice  is  given,  newed  several  times.  It  was  held  tliat  the 
for  the  acts  of  the  other  partners.  defendants  were  dealers.  Only  those  who 
(z)  Howe  V.  Thayer,  17  Pick.  91.  have  habitually  dealt  with  a  firm  are  en- 
fa)  Hutchins  v.  Bank  of  Tennessee,  8  titli^l  to  actual  notice.  A  single  transac- 
Humph.  418.  See  Grinnau  v.  Baton  tion  does  not  amount  to  habitual  dealing. 
Rouge  Mills  Co.,  7  La.  Ann.  638.  Mi-rritt  v  Williams,  17  Kas.  287  ;  Clapp 

(b)  Dictum  in  Clapp  v.  Rogers,  12  N.Y.  v.  Rogi-rs,  12  N.  Y.  283. 

283.  {(•)  Hutchins  v.  Sims,  8  Humph.  423. 

(c)  Clapp  w.  Rogers,  12  N.  Y.  283.  (/)  Hutchins   v.   Hudson,  8   Humph. 
{d)  Hutchins  v.  Bank  of  Tennessee,  8     426. 

Humph.  418.     See  also  City  Bank  v.  Mc-  (g)  Amidown   v.   Osgood,  24  Vt.    278. 

Chesney,    20   N.   Y.  240  ;   City   Bank   v.  In  Wardwell    v.   Haight,   2  Barb.  549,  » 

Dearborn,  20  N.  Y.  244  ;    National  Bank  person    who    had   two   previous    dealings 

V.    Korton,   1    Hill,    572.     In   Vernon    v.  with  a   firm  was  held  entitled  to  actual 

Manhattan  Co.,  17  Wend.  524,  22  Wend,  notice. 
183,  the  note  was  the  last  of  a  series  of 

1  A  dormant  partner,  properly  so  called,  is  not  bound  to  give  notice  of  withdrawal. 
Elmira  Iron  &  Steel  R.  M.  Co.  v.  Harris,  124  N.  Y.  280,  26  N.  E.  541.      But  the  mere 


§  320. J  OF   A    CHANGE   IN   THE   PARTNERSHIP.  409 

obligations  incurred  by  the  firm  while  he  was  in  it,  because  he 
was  then  a  partner  in  fact,  and  not  because  he  was  supposed  to 
be  one  :  in  other  words,  he  was  bound  because  of  his  participa- 
tion in  the  business  and  profits,  and  not  because  the  creditors  of 
the  firm  became  so  on  his  credit.  When  he  leaves  the  firm,  there- 
fore, all  the  reason  for  holding  him  responsible  expires ;  and  he 
is  not  obliged  to  give  any  notice,  or  take  any  step  to  withdraw  a 
credit  which  never  existed.  (A)  A  dormant  partner  is,  however, 
liable  for  the  whole  of  a  debt  contracted  during  his  partnership, 
just  as  any  other  partner  is.  And,  if  he  is  known  to  any  customer, 
so  far  as  relates  to  that  customer  he  is  not  a  dormant  or  unknown 
partner,  and,  therefore,  notice  should  be  given  to  that  customer. 
"Whether  the  customer  was  ignorant  of  the  partnership  or  not,  is 
a  question  of  fact,  and  sometimes  is  a  diflBcult  one.  But  a  knowl- 
edge on  his  part  must  be  clearly  shown,  to  entitle  him  to  notice,  if 
the  partner  were  generally  unknown.  («')  As  the  fact  of  the  part- 
nership may  have  been  accidentally  divulged  without  the  knowl- 
edge or  intention  of  the  dormant  partner  himself,  it  would  always 
be  wise  to  guard  against  a  danger  of  this  kind,  by  giving  the 
usual  notice.  The  question  has  arisen,  whether,  if  A.,  B.,  and  C. 
are  in  business,  under  the  firm  and  style  of  A.,  B.,  6i  Co.,  and  C. 
retires,  he  is  bound  to  give  notice  to  dealers  with  the  firm  who 
have  no  knowledge  that  he  is  a  partner.  We  exhibit  the  present 
state  of  the  authorities  in  our  note.  (/)     In  Scotland,  a  dormant 

{h)  Scott  V.  Colmesnil,  7  J.  J.  Marsh.  Bill,  37  111.  76  ;  Ellis  v.  Bronson,  40  111. 

416 ;    Kelley    v.    Hurlburt,    5  Cow.   5-34 ;  455. 

Evans  v.   Drummond,    4  Esp.    89  ;    Ana-  (i)  Carter  v.  Whalley,  1  B.  &   Ad.  11  , 

stronj^  V.  Hussey,  12  S.  &  R.  315  ;  Benton  Farrar  v.  Deflinne,  1  C.  &  K  5S0  ;  Edwards 

V.  Chamberlin.  23  Vt.  711  ;  Kennedy  v.  v.  McFall,  5  La.  Ann.  167. 
Bohannon,    11   B.  Mon.    120  ;    Ayrault  v.  {j)   In  Edwards  v.  McFall,  5  La.  Ann. 

Chamberlin,    26     Barb.    89  ;    Warren    v.  167,  the  defendant    was    a  partner  of   A. 

fact  that  the  name  of  a  partner  is  not  disclosed  does  not  bring  him  within  this 
rule.  If  he  takes  part  in  the  business,  though  not  advertised  as  a  partner,  he  is  liable, 
until  notice  of  withdrawal,  to  former  customers  though  his  connection  with  the  busi- 
ness was  not  known  ;  for  they  are  cognizant  of  the  financial  standing,  if  not  of  the 
personality  of  the  film.  Elkinton  v.  Booth,  143  Mass.  479  ;  Elmira  Iron  &  Steel 
K.  M.  Co.'v.  Harris,  124  N.  Y.  2S0,  26  N.  E.  541  ;  Shamburg  v.  Euggles,  83  Pa.  148  ; 
Shamburg  v.  Abbott,  112  Pa.  6.  But  as  to  those  who  have  not  dealt  with  the  firm,  he 
need  not  give  notice  of  withdrawal  if  his  connection  with  the  firm  was  unknown. 
Austin  V.  Appling,  88  Ga.  54,  13  S.  E.  955  ;  Cook  v.  Penrhyn  Slate  Co.,  36  Oh.  St. 
135  ;  Benjamin  v.  Covert,  47  Wis.  375,  2  N.  W.  625.  Any  one  who  knows  of  the 
existence  of  a  partner,  though  dormant,  may  hold  him  liable  unless  proper  notice  of 
withdrawal  has  been  given.  Beckett  v.  Ramsdale,  31  Ch.  D.  177  (C.  A.)  ;  Lieb  v. 
Craddock,  87  Ky.  525,  9  S.  W.  838  ;  Clark  v.  Fletcher,  96  Pa.  416. 

A  special  partner  in  a  limited  partnership  need  not  give  notice  of  withdrawal.      Tilge 
V.  Brooks,  124  Pa.  178,  16  AtL  746. 


410 


THE   LAW   OF   PARTNERSHIP. 


[CH.    XIII. 


jiartner  must  give  notice  of  dissolution,  as  well  as  an  ostensible 
one.  {k) 

§321.  Notice  must  be  Reasonable.  —  The  question,  whether 
notice  has  been  given,  or,  if  given  generally,  whether  it  was 
brought  home  to  the  knowledge  of  a  customer,  is  governed,  in  the 
case  of  a  retiring  partner,  by  the  rules  applicable  to  a  question  of 
notice  in  other  cases.  It  is  usually  a  mixed  question  of  law  and 
fact ;  although,  if  the  facts  are  found,  the  reasonableness  of  the 
notice  is  properly  a  question  of  law  only.  In  England,  or  at  least 
in  London,  a  usage  sanctioned  by  the  courts  requii-es  that  notice 
of  retirement  and  dissolution  should  be  given  in  a  newspaper,  pub- 
lished in  London,  under  the  name  of  "  The  London  Gazette."  (I) 
There,  also,  all  bankruptcies  are  published  ,  and  it  is  a  cant  phrase 
for  becoming  a  bankrupt,  that  a  party  "  finds  himself  in  the 
'Gazette.'"  No  such  usage  is  known  here,  and  would  be  impos- 
sible as  to  any  one  paper  for  the  whole  nation  ;  but  it  might, 
perhaps,  usefully  obtain  as  to  some  one  paper  in  each  of  our  prin- 
cipal commercial  cities.  As  the  law  stands,  however,  the  party 
giving  notice  by  advertisement  may  take  his  choice  of  newspapers. 
If,  however,  he  selected  one  which  was  very  obscure  and  unknown, 
or  had  but  little  circulation  among  merchants,  it  might  be  a  fact 


&  Co.  It  was  contended  that,  as  his 
name  diil  not  appear  in  the  style  of  the 
firm,  he  was  a  dormant  partner.  But  the 
court  said  :  "  We  are  not  prepared  to  say 
that  a  person  can  he  styled  a  dormant 
partner  who  enters  into  a  partnership  with 
A.,  under  the  style  of  A.  &  Co.  The 
words  '  &  Co.'  hold  out  to  the  world  that 
some  one  else  is  concerned  besides  A.  The 
term  '  dormant  '  seems  more  properly 
ap[)licable  to  the  case  of  a  party  associat- 
ing himself  in  business  with  A.,  who  trans- 
acts the  business  in  his  { A.'s)  sole  name.  " 
See  Mitchell  v.  Dall,  2  H.  &  G.  159,  171. 
Where  A.  &  B.  were  in  business  under  the 
name  of  A.  &  Co.,  and  a  person  dealing 
with  the  firm  did  not  know  that  B.  was  in 
the  firm,  it  was  held  that  B.  was  not  a 
dormant  partner.  Deford  v.  Reynolds,  36 
Pa.  325.  See  also  Western  Bank  of  Scot- 
land V.  Needell,  1  Fost.  &  F.  461.  A 
similar  rule  is  laid  down  in  Goddard  v. 
Pratt,  16  Pick.  428  ;  but  the  case  of 
Grosvenor  v.  Lloyd,  1  Met.  19,  has  been 
thought  to  countenance  the  doctrine  that 
an  unnamed  partner  in  sucli  a  firm  would 
not  be  bound  to  give  notice  in  such  a  case. 
This  inference  does  not  necessarily  follow, 


however  ;  because  the  ruling  of  the  court 
below,  upon  which  the  case  came  up,  was 
somewhat  peculiar,  and  did  not  jiresent 
this  i)recise  question.  The  court  below 
had  instructed  the  jury  that  a  secret  part- 
ner was  liable  after  his  withdrawal,  if  no 
notice  of  the  dissolution  was  given.  The 
effect  of  that  instruction  was  to  make  the 
partner  designated  under  the  "Co." 
secret  ;  and  the  higher  court,  bj'  ordering 
a  new  trial,  may  perhaps  be  taken  to  have 
repuiliated  that  doctrine,  and  to  have 
sustained  the  contrary  doctrine  of  Goddard 
V.  Pratt.  See  also  Benton  v.  C'hamberlin, 
23  Vtr  711  ;  Heath  v.  Sausom,  4  B.  & 
Ad.  172  ;  Carter  v.  Whalley,  1  B.  &  Ad. 
11  ;  Bernard  v.  Torrance,  5  Gill  &  J.  583. 

{k)   Hay  v.  Mair,  Ross  on  Part.  639. 

(I)  In  Trough  ton  v.  Hunter,  18  Bcav. 
470,  the  partnership  had  been  dissolved 
by  judicial  decree.  One  of  the  partners 
refused  to  sign  the  notice  of  the  dissolu- 
tion which  had  been  prepared  for  ])ulilica- 
tion  in  "The  London  Gazette,"  and  it 
appeared  that  it  was  the  usage  of  that 
paper  not  to  publish  any  notice  unless 
signed  by  all  the  partners.  The  court 
ordered  the  partner  to  sign  the  notice. 


§  322.] 


OF    A    CHANGE    IN    THE    PARTNERSHIP. 


411 


which  would  lead  a  court  or  jury  towards  the  conclusion  that  the 
])arty  intended  to  satisfy  tlie  letter  of  the  law,  but  n(jt  its  spirit, 
and  to  withhold  notice  rather  than  to  give  it ;  and,  of  course, 
such  a  notice  would  not  be  deemed  "  reasonable  "  by  the  court. 
A  similar  remark  may  be  made,  but  with  less  force,  perhaps,  as 
to  the  number  of  times  the  advertisement  was  published,  and 
even  as  to  the  place  which  it  occupied  in  the  newspaper.  There 
can  be  but  one  general  rule  applicable  to  all  these  questions ;  and 
that  is,  that  the  retiring  partner  cannot  have  the  benefit  of  the 
notice,  unless  he  shows  that  it  was  such  reasonable  and  sufficient 
notice  as  the  usage  of  merchants  requires,  (m)  or  brings  home 
actual  knowledge  of  it  to  the  customer.  For,  even  if  he  tried  to 
prevent  the  notice  from  being  known,  he  will  still  have  the  full 
benefit  of  it  so  far  as  it  was  known. 

§  322.  Circumstances  when  sufficient  Notice.  —  If  the  retiring 
partner  does  not  publish  the  fact  in  any  newspaper,  it  has  been 
held  that  the  mere  notoriety  of  it  will  seldom  or  never  protect 
him.  (n)  It  is,  however,  always  ])ossible  that  this  notoriety 
may  be  so  extreme,  and  so  connected  by  circumstances  with 
an  individual  customer,  that  both  court  and  jury  would  re- 
gard it  as  dispensing  with  special   notice,  (o)     And  a  sufficient 


(»i)  In  Grinan  r.  Baton  Kongo  Mills 
Co.,  7  La.  Ann.  638,  the  business  of 
making  bricks  and  sawing  lumber  was 
carried  on  at  Baton  Kouge.  Tlie  members 
of  the  firm  all  lived  in  New  Orleans, 
where  they  had  an  office,  kept  by  an  agent. 
It  was  held  that  notice  of  dissolution  pub- 
lished in  a  paper  at  Baton  Kouge  was  not 
sufficient  to  exonerate  those  known  to  be 
partners  as  to  persons  residing  at  New 
Orleans,  who  had  had  no  jirevious  deal- 
ings with  the  firm.  See  also  Deford  v. 
Keynolds,  36  Pa.  325.  In  Wardwell  v. 
Haight,  2  Barb.  549,  the  dissolution  of  a 
firm  doing  business  in  Rochester  was  con- 
cealed fifteen  months ;  and  notice  then 
was  published  in  Rochester  six  days  before 
goods  were  purchased  in  New  York  on 
the  credit  of  the  firm.  The  court  consid- 
ered the  sellers  as  dealers,  and  therefore 
entitled  to  actual  notice  ;  but  said,  if  they 
had  not  been,  this  notice  would  have  been 
insufficient.  It  was  also  said  that  a  notice 
must  be  public  and  notorious,  so  as  to  put 
the  public  on  its  guard.  See  Bank  of  the 
Commonwealth  v,  Mudgett,   45  Barb.  663. 


(n)  Pitcher  v.  Barrows,  17  Pick.  361  ; 
City  Bank  v.  McChesney,  20  N.  Y.  240  ; 
Gorham  v.  Thompson,  Peake,  42.  The 
testimony  of  a  witness,  that  he  had 
notice  of  the  dissolution  of  a  partnership 
at  a  particular  time,  cannot  be  given  in 
evidence  in  a  suit  between  others,  in  which 
the  dissolution  of  the  partnership  at  that 
time  becomes  material.  Shaffer  v.  Snyder, 
7  S.  &  R.  503. 

(o)  Where  a  witness  testified  that  he 
had  given  notice  of  the  retirement  of  a 
partner,  and  of  the  general  dissolution 
of  the  partnership,  and  that  he  was 
"confident  that  all  the  neighborhood 
were  notified  in  two  days,"  and  on  cross- 
examination  was  asked  whether  he  gave 
such  notice  to  the  other  creditors  as  he 
had  testified  he  gave  to  the  one  in  ques- 
tion, and  he  said  he  had,  and  gave  the 
names  of  the  persons,  — it  was  held  that 
it  was  competent  to  call  the  persons 
named,  and  to  prove  that  such  notice  had 
not  been  given  them  ;  but  that  it  was  not 
competent  for  the  other  side  to  call  any  of 
the  persons  named  to  prove  that  they  had 


412  THE    LAW    OF    PARTNERSHIP.  [CH.    XIII. 

lapse  of  time  since    the  retirement  might  supply  the  want  of 
notice,  (oo) 

The  taking  a  note  of  one  partner  (the  firm  having  been  dis- 
solved two  years  before),  signed  with  the  firm  name,  and  the 
words  added,  "  in  liquidation,"  would  be  evidence  from  which  the 
jury  might  infer  knowledge,  (p)  And  a  change  of  partnership  in 
a  banking-house  is  sufficiently  notified  to  the  customers  of  the 
house  by  a  change  in  the  printed  cheques.  (^)  So  a  change  in  a 
name  painted  on  a  counting-liouse,  and  circulars  sent  to  old  cor- 
respondents, but  no  public  notice  given,  is  sufficient  notice  to  the 
world,  (r)  But  a  mere  change  of  name  is  not  always  enough  ;  (s) 
nor  a  change  of  pursuits,  or  a  removal  from  the  State  of  one 
partner;  Q)  nor  is  the  incorporation  of  the  firm  ;  (w)  or  the  fact 
that  a  deed  of  assignment,  constituting  a  dissolution,  was  put  on 
record.  (?')  If  the  notice  was  only  by  advertisement,  it  must  go 
further  [to  protect  the  retiring  partner  against  former  customers]. 
It  has  been  held  that  proof  that  tlie  customer  regularly  received 
the  newspaper  was  sufficient,  {iv)  But  the  prevailing  rule  now 
seems  to  be,  —  at  least  in  this  country,  where,  as  has  been  said, 
we  have  no  one  newspaper  in  which  merchants  may  expect  to 
find  all  information  of  this  kind,  —  that  it  is  not  enough,  of 
itself,  to  prove  that  the  very  number  of  the  paper  containing  the 
advertisement  was  delivered  at  his  house,  or  even  traced  to  his 
hand,  (x)  And,  in  point  of  fact,  the  multiplication  of  news- 
received  sucli  notice.  Howe  v.  Thayer,  17  {ic)  For  the  rule  in  England,  see  God- 
Pick.  91.  frej'  V.  Turnbull,  1  Esp.  371  ;  Wricrhtson 
{no)  Fanners'  Bank  v.  Green,  30  N.  J.  v.  PuUan,  1  Stark.  375,  called  Wricjht  v. 
L.  316.  Pulham,  2  Chitty,  121  ;  Godfrey  r^  Mmc- 
(p)  Merrit  i*.  Pollys,  16  B.  Mon.  355.  auley,  1  Peake,  155  ;  Newsome  v.  Coles,  2 
iq)  Barfoot  v.  Goodall,  3  Camp.  147.  Camp.  617  ;  Norwich  Nav.  Co.  v.  Theo- 
(?•)  M'lver  !'.  Humble,  16  East,  169.  bald.  Moody  &  M.  151.  But  in  respect  to 
(s)  As  if  a  firm  which  consisted  of  A.  persons  who  have  been  dealers  with  the 
B.  &  C,  doing  business  under  the  name  firm,  notice  in  the  "Gazette,"  is  not  suf- 
of  A.  &  B.,  on  the  retirement  of  C.  and  of  ficient.  Graham  v.  Hojie,  Peake,  154.  In 
A.,  should  do  business  under  the  style  of  Jenkins  v.  Blizard,  1  Stark.  418,  it  is  not 
B.  &  D.,  even  if  the  fact  of  the  change  of  stated  expressly  whether  the  party  sought 
name  were  known,  it  would  not  be  equi-  to  be  charged  with  notice  was  a  previous 
valent  to  notice  of  the  retirement  of  C,  -  dealer  or  not  ;  but  it  would  seem  that  he 
especially  if  the  firm  was  carried  on  under  was  from  the  concluding  remarks  of  Lord 
a  more  general  designation  which  remained  Ellenborough.  Notice  was  publislied  in 
unchanged.  Howe  v.  Thayer,  17  Pick,  the  "  Gazette,"  and  once  in  the  "  Morning 
91.  Chronicle."  Tliis  last  paper  was  taken  by 
(t)  Lucas  V.  Bank  of  Darien,  2  Stew,  the  party  sought  to  be  charged.  It  was 
280.  held  that  this  was  evidence  to  go  to  the 
{u)  Goddard  v.  Pratt,  16  Pick.  432.  jury  of  knowledge  of  the  dissolution. 
(v)  Pitcher  v.  Barrows,  17  Pick.  (x)  Vernon  v.  Manhattan  Co.,  17 
361.                                                                   Wend.  526,  22  Wend.  192  ;  Boyd  v.  Cann. 


§  323]  OP   A    CHANGE    IN    THE    PARTNERSHIP.  413 

papers,  to  say  nothing  of  their  size,  seems  to  forbid  all  reasonable 
inference  that  he  who  takes  a  news[)aper,  or  even  reads  in  it, 
reads  the  whole  of  it,  or  becomes  apprised  of  all  the  facts  stated 
in  it.  But,  if  it  could  be  shown  that  the  customer's  attention 
was,  in  any  especial  way,  drawn  to  the  advertisement,  —  even, 
|)erhaijs,  by  being  placed  prominently  before  him,  —  the  evidence 
miglit  be  thus  made  sufficient.  But  our  courts  seem  to  be  tend- 
ing—  wisely,  as  we  think  —  to  the  requirement  of  personal  notice, 
by  circulars,  to  all  the  customers  of  the  firm,  if  the  old  name  be 
retained. 

§  323.  To  whom  Notice  should  be  Given.  —  Some  question  may 
arise  as  to  the  person  to  whom  notice  should  be  given.  If  given 
to  one  of  a  partnership,  in  this  as  in  all  other  cases  of  bond  fide 
notice  all  are  certainly  bound.  (^)  So,  if  to  an  agent,  the  prin- 
cipal is  bound.  (2)  If  to  a  stockholder  in  a  corporation,  (a)  — a 
bank,  for  example,  —  it  is  no  notice  to  the  bank,  unless  it  can  be 
carried  further,  and  shown  to  have  reached  those  who  were 
intrusted  with  its  management.  It  has  been  held,  that  casual 
notice,  by  an  advertisement,  reaching  a  director,  did  not  bind  the 
bank,  (h)  And,  upon  the  whole,  the  actual  practice  of  the  coun- 
ti-y  may  supply  suiFicient  reason  for  the  distinction.  But  if  a 
notice  were  given  to  a  director,  expressly  for  the  bank,  and  to  be 
communicated  to  the  board  or  cashier  and  acted  upon,  this  must 
be  sufficient,  (c)  We  should  doubt,  however,  whether  notice  to  a 
stockholder,  with  a  distinct  request  that  he  should  communicate 
the  fact  to  the  directors  or  officers,  would  bind  the  bank,  unless 
tiiis  communication  was  made  ;  because  a  stockholder  is  under  no 
obligation  to  communicate  such  information,  and  has  no  official 
authority  to  receive  it.  (tZ)  It  may  be  considered  as  a  general 
rule,  that,  where  it  is  necessary  to  give  notice,  it  is  not  sufficient 
that  the  necessary  steps  for  this  purpose  were  taken,  if  notice 
was  not  received,  (g) 

10  Md.  118  ;  Pope  v.  Risle}',  23   Mo.  185  ;  {a)  1    Pars,  on  Coiit.  (5th  ed.)  77  and 

Watkinson  v.  Baiikof  Penn.,4  Whart.  482  ;  notes. 

Hutrluusv.  Bankof  Tenn.,8  Humph.  418  ;  (b)   National  Bank  r.  Norton,  1    Hill, 

Wliitev.Murphy,  3Piich.  369.  ButseeBank  572.      In    Lucas   v.    Bank  of    Darien,    2 

of  So.  Car.  v.  Humphreys,  1  McCord,  388.  Stew.  280,  the  fact  that  one  partner  after 

(y)   BignoJd  v.  Waterhouse,  1   M.  &  S.  dissolution  became  a  director  in  a  bank 

249  ;  Ex  parte  Waithman,  1  Mont.  &  A.  was  not  notice  to  the  bank  of  the  dissolu- 

374;    Haywood  y.  Harmon,   17  111.  417;  tion.     And  see  preceding  note. 
Bouldin  v.  Paige,  24  Mo.  594.      See  Lan-  (c)  National   Bank  1;.    Norton,  1  Hill, 

sing  V.  M'Killup,  7  Cow.  416  ;    Powell  v.  578  ;  Bank  of  the  United  States  i'.  Davis, 

Waters,  8  Cow.  670  ;   Watson  v.  Welles,  5  2  Hill,  264. 
Conn.  468.  {d)  See  cases  in  preceding  notes. 

(;)  Page  v.  Brant,  18  111.  37.  (e)  Johnson  v.  Totten,  3  Cal.  313. 


414  THE   LAW   OF    PARTNERSHIP.  [CH.    XITI. 

The  principle,  that,  after  a  partnership  is  dissolved,  one  part' 
ncr  dealing  with  a  person  having  no  notice  of  the  dissolution 
may  bind  his  late  copartner,  applies  only  to  transactions  in  the 
usual  course  of  the  firm's  business.  (/) 

§  324.  Retiring  Partner  whether  discharged  from  Liability.  —  A 
I'ctiring  partner  is,  as  we  have  seen,  liable  for  the  existing  debts 
of  the  firm,  in  precisely  the  same  way  and  to  the  same  extent  as 
before  he  left  it:  and  yet  it  is  very  common  for  the  partners  to 
agree  that  they  who  remain,  perhaps  with  the  new  ones  who 
come  in,  shall  pay  all  the  debts ;  and  the  retiring  partner,  as  a 
consideration  for  this  agreement,  gives  up  or  leaves  behind  iiim  a 
proportionate  ])art  of  the  joint  property.^  Such  an  agreement 
is  perfectly  valid  between  the  partners ;  but  has  no  effect  at  all 
upon  the  creditors,  unless  they  become  parties  to  it.  {g)  It  fol- 
lows, therefore,  that  the  creditors  of  the  firm  may  not  only 
include  the  retiring  partner  in  any  action  against  the  firm,  but 
may  satisfy  an  execution  against  the  firm  from  his  property,  as 
freely  as  from  that  of  any  remaining  partner,  {h)  But,  when 
they  have  done  so,  the  retiring  ])artner  has  his  action  against  the 
remaining  partners,  on  their  contract  to  pay  that  debt.  It  is 
usual  to  add,  \d^  the  bargain  between  the  partners,  a  clause  of 
indemnity  ;  but  whether  they  do  or  do  not  promise  to  hold  him 
harmless,  if  they  promise  to  pay  the  debt,  and  he  pays  it,  he  has 
his  action,  (i) 

Where,  upon  a  dissolution,  it  was  agreed  that  the  assets  of 
the  firm  should  be  placed  in  the  hands  of  one  partner,  and  he 
agreed  that  he  would  therefrom  pay  the  debts  of  the  partner- 
ship, it  was  held  that  he  had  only  agreed  to  apply  the  assets 

(/)  Whitman     v.     Leonard,    3     Pick.  Eldon,  6  Ves,   119;  Harries  v.  Jamieson, 

177.  5  T.  R.  556  ;  Wooley  v.  Kelly,  1  B.  &  C. 

((/)  Harris  v.  Lindsay,  4  "Wash,  C.   C.  68.     And   see  Allen  v.    Wells,   22    Pick. 

98,   271  ;  Kirwan  v.  Kirwau,  2   Cr.  &  M.  450. 
617.  (/)   Hohart  v.    Howard,    9   Mass.   304  ; 

(h)  Lodge  V.  Dicas,  3   B.   &  Aid.  611  ;  Brewer   v.    Worthington,   10  Allen,    329. 

per  DeGrey,  C.  J.,  2  W.  Bl.  947,  and  Ld.  See  Thurber  v.  Corbin,  51  Barb,  215. 

^  Where  npon  dissolution  one  partner  agrees  to  pay  the  firm  debts,  the  other  becomes, 
as  between  the  two,  a  mere  surety  and  entitled  to  the  rights  of  a  surety.  Thus  upon 
payment  of  a  firm  debt  he  is  entitled  to  the  benefit  of  all  securities.  Johnson  v.  Young, 
20  W.  Va.  614.  And  an  extension  of  time  by  a  creditor  who  has  knowledge  of  the 
agreement  discharges  the  retiring  partner.  Fernald  v.  Clark,  84  Me.  234,  24  Atl.  823  ; 
Brill  V.  Hoile,  53  Wis.  537,  11  N.  W.  42.  If  a  firm  creditor  with  knowledge  of  this 
agreement  accepts  a  new  note  in  renewal  of  the  debt  it  will  be  held  such  a  giving 
of  time  as  to  discharge  the  surety.  Leithauser  v.  Baumeister,  47  Minn.  151,  49  N.  W. 
660  ;  Bank  v.  Green,  40  Oh.  St.431  ;  Gates  v.  Hughes,  44  Wis.  332  (snmble). 


§  325.]  OF   A    CHANGE   IN   THE   PARTNERSHIP.  415 

to  the  debts,  but  did  not  absolutely  assun;ie  the  payment  of 
them,  (ii) 

§  325.  Novation  by  means  of  Creditors'  Consent.  —  If,  liowevei*. 
the  creditors  becouic  parties  to  this  agreemeut,  for  consideration, 
they  are  of  course  bound  by  it ,  and  then  they  cannot  sue  the  retir- 
int^  j)artuer.*  In  such  case,  something  like  the  novatiou  of  the 
civil  law  has  taken  place.  A  debt  due  from  the  whole  lirni  has 
been  discharged,  and  a  new  debt  from  a  part  of  the  firm  has  been 
created.  The  old  debt  has  been  paid  by  the  new  one.  But  there 
must  be  some  consideratioti  for  the  release  of  the  retiring  ])art- 
ner.  In  almost  all  cases  where  the  creditor  agrees  to  this,  there 
is  some  reason  for  it  in  fact,  which  serves  as  a  consideration. 
Either  the  retiring  ])artner  gives  up  something  because  of  the 
assent  of  the  creditor,  or  the  creditor  gains  something  in  time, 
or  in  business,  or  in  some  other  way  ;  and  there  are  few  cases  in 
the  books,  and  few  we  apprehend  in  practice,  in  which  a  creditor, 
who  agrees  with  partners  tliat  one  of  them  shall  retire  and  be 
released  from  his  debt  on  the  engagement  of  the  others  to  pay 
it,  is  afterwards  permitted  to  sue  this  partner.  It  is  seldom,  of 
course,  that  such  bargains  are  made  in  cases  of  insolvency  ;  for 
the  obvious  futility  of  it,  and  entire  absence  of  motive  for  it,  or 
effect  from  it  in  such  a  case,  would  prevent  an  attempt  to  make 
or  carry  out  an  agreement  of  this  kind  by  an  insolvent  firm. 
And,  if  the  firm  be  solvent,  no  harm  is  done  to  the  creditor  by 
limiting  his  choice  among  debtors,  all  or  any  of  whom  can  pay 
him. 

It  is  said  that  the  adequacy  of  the  consideration  cannot  be 
inquired  into,  (j)     And,    if    a   creditor   of    a    firm    contracts  or 

(u)  Topliff  V.  Jackson,  12  Gray,  56.5.  In  Lyth  v.  Ault,  7  Exch.  667,  debt  was 
(j)  Lyth  V.  Ault,  7  Exch.  667,  per  brought  against  A.  &  B.  A.  pleaded  that 
Pollock,  U.  B.  tlie  action  was  for  goods  sold  to  A.  & 
In  Lodge  v.  Dicas,  3  B.  &  Aid.  611,  a  B.  as  partneis  ;  that  afterwards  A.  being 
creditor  of  a  firm,  on  its  dissolution,  about  to  retire,  and  the  business  to  be  car- 
agreed  to  look  only  to  one  partner.  It  ried  on  by  B.  alone,  of  which  the  plaintitf 
was  held  that  the  agreement  was  void  for  had  notice,  an  agreement  was  made  between 
want  of  consideration.  See  also  David  r.  the  plaintiff  and  defendant,  by  which 
Ellice,  5  B.  &  C.  196  ;  Thomas  v.  Shilli-  the  plaintiff  was  to  be  paid  \2l.  in  part 
beer,  1  M.  &  W.  124,  and  Wildes  v.  Fes-  payment  of  her  debt,  and  the  plaintiff  was 
senden,  4  Met.  12,  where  this  question  is  to  abandon  her  claim  against  A.  and  look 
discussed  at  length.  Lodge  v.  Dicas  is,  to  B.  alone.  The  jury  having  found  the 
however,  no  longer  authority  in  England,  issue  of  fact  in  favor  of  the  defendant,  a 

1  Where  upon  dissolution  one  partner  agrees  to  pay  the  debts,  and  a  creditor  knows 
of  the  arrangement  and  assents  to  it,  there  is  a  novation,  and  as  to  him  the  retiring 
partner  is  discharged.  Regester  v.  Dodge,  6  F.  R.  6,  19  Blatch.  79  ;  Bank  v.  Green,  40 
Oh.  St.  431. 


416  THE   LAW   OP   PARTNERSHIP.  [CH.    XIII. 

agrees  with  a  new  firm  to  take  their  security  in  discharge  of  that 
of  the  old,  the  retiring  partner  is  discharged  from  any  liability 
to  pay  the  debt ;  and  whether  such  an  agreement  has  taken  ))lace 
is  a  question  of  fact  for  the  jury,  (/c)  To  discharge  the  retiring 
partner,  however,  it  is  not  sufficient  to  take  a  new  security  ;  but 
there  must  be  an  agreement  to  discharge  him  from  the  liability 
of  the  old  fii-m.  (/) 

§  326.  Implied  Consent  of  Creditors.  —  It  is  quite  seldom  that 
creditors  of  a  lirm  assent  to  such  an  arrangement  ex])rcssly  and 
directly,  but  it  is  very  common  for  them  to  do  so  by  implication  ; 
and  numerous  ca,ses  turn  upon  the  question.  What  circumstances 
imply  such  assent  on  the  part  of  the  creditors  ?  The  cases  we 
cite  will  show  that  the  courts  construe  with  some  liberality  the 
question  of  assent ;  and  that  of  consideration,  with  so  much  that 
it  seems  to  be  now  almost  implied  in  the  assent,  {m)  But  a  cred- 
itor's mere  transfer  in  his  ledger  of  an  account  against  a  firm,  to 
the  private  account  of  one  partner,  without  the  knowledge  of  the 
firm,  does  not  preclude  the  creditor  from  suing  the  firm,  (n) 

If  the  creditor  has  no  security,  and  no  paper  evidence  of  his 
debt  from  the  firm,  and,  after  the  partner  retires,  he  accepts  from 
the  new  firm,  with  knowledge  of  the  retirement,  the  security  or 
paper  of  the  new  firm,  —  this  would  seem  to  be  not  only  an  assent 
on  his  part,  but  an  assent  on  consideration  ;  for  the  acquiring 
either  of  additional  security,  or  of  paper  which  he  may,  by  dis- 
count, at  once  convert  into  money,  is  consideration  enough  for 
the  promise  implied  in  his  assent,  even  though  there  is  no  new 
partner  in  addition  to  the  old  in  the  new  firm,  (o) 

motion    was  made    for  judgment  for    the  {m)    See  Hart  v.   Alexander,  2  M.  & 

plaintiff  no7i   ohstnnle    veredicto,    on    the  W.   484  ;    Harris  v.  Lindsay,  4  Wash.  C. 

ground  tliat  tliere  was  no  new  consideration  C.    98,   271;    Delaud   v.  Amesbury  Mfg. 

for  the  agreement.    Parke  B.,  said  Thomp-  Co.,  7  Pirk.  244. 

son   V.  Percival,    5  B.  &  Ad.  925,  suhstan-  (n)   Barker  r.  Blake,  11  Mass.  16.     See 

tially  overruled  Lodge    v.   Dicas,  3  B.  &  also   Armsby  v.   Farnani,   16    Pick.    318  ; 

Aid.  611.    Pollock,  C.  B.,  said  that  it  was  Averill   v.  Lyman,  18  Pick.  351  ;    Baring 

not  easy  to  make  a  distinction  between  the  v.  Crafts,  9  Met.  380. 
case   at  bar  and  Lodge  y.   Dicas  ;  but  in  (o)   Evans  v.  Drummond,   4   Esp.  92  ; 

that  case  the  defendant  was  not  proved  to  Reed  v.  White,  5  Esp.  122  ;    Thompson  v. 

have  known  of  the  agreement  of  the  plain-  Percival,    5    B.    &    Ad.   925;     Sheeliy  v. 

tiff  to  take  the  liability  of  the  other  part-  Mandeville,  6  Cranch,  264  ;    Stephens  v. 

ners.     Martin    B.,    said:  "I    think   that  Thompson,  28  Vt.   77;    Isler  j;.  Baker,  6 

Lodge  V.  Dicas  is  overruled,  and  it  is  bet-  Hum)ih.  8.5.     In  this  latter  case,  however, 

ter  to  say  so  than  to  attempt  to  distinguish  the  ]ilaiutiff  had  taken  a  note  signed  by 

between  the  ca.ses."  the  firm  name,  which  the  court  held  good 

{k)  Harris  v.    Farwell,    15    Beav.    31  ;  as  against  the  signer,  but  not  as  against 

Thomp.son  v.  Percival,  5  B.  &  Ad.  925.  the   estate  of  the  deceased   partner  ;    an 

(I)  Harris   v.    Farwell,    15    Beav.    31  ;  inquisition  of  lunacy  having  been  found 

Bedford  v.  Deakin,  2  B.  &  Aid.  210.  against  the   latter,   after  the  goods  were 


§  327.J 


OF    A    CHANGE    IN    THE    PARTNERSHIP. 


417 


If  he  has  securities  I'rom  the  old  firm,  and  gives  them  up,  and 
receives  from  the  new  firm  what  is  only  the  same,  excepting  that 
the  paper  loses  one  name  and  gains  another,  being  that  of  a 
present  instead  of  a  j)ast  firm,  —  here  there  is  undoubtedly  consid- 
eration enough,  whether  the  new  name  be  better  or  worse,  com- 
mercially speaking,  than  the  name  that  is  lost,  {p )  And  if  the  old 
security  is  given  up  for  the  new,  it  seems  that  the  old  is  so  effec- 
tually destroyed  that,  if  the  creditor  afterwards  i-eturns  the  new 
to  the  remaining  partner  or  partners,  and  receives  from  them  the 
old,  this  will  not  revive  the  obligation  of  the  retiring  partner,  {q) 

§  327.  Old  Claim  retained  as  Additional  Security.  —  If  he  takes 
new  security,  agreeing  to  hold  the  retiring  jjartner  only  as  surety 
for  the  debt,  there  must  be  some  consideration,  even  for  this 
modified  discharge;  but  if  there  is  one,  or  anything  which  can 
be  called  one,  then  the  retiring  ])artner  will  be  held  only  as  surety, 
and  not  as  a  joint  del)tor.  lie  will,  therefore,  be  discharged  by 
any  indulgence  to  the  remaining  partners,  who  are  the  princit)al 
debtors,  which  would  suifice  to  discharge  any  surety;  and  the 
general  rule  here  is,  that  mere  delay  in  calling  for  the  debt  does 
not  discharge  the  surety  ;(r)  nor  even  a  promise  of  delay,  if  it  be 
not  so  far  binding  as  to  estop  the  creditor  from  a  suit  against  the 
new  firm,  (s)  But,  if  it  would  have  this  effect,  then  it  injures 
the  guarantor,  becaufie  he  can  no  longer  secure  himself  by  paying 
the  debt  and  suing  for  it  in  the  name  of  the  creditor;  and,  there- 
fore, by  such  indulgence  he  is  discharged,  (t) 

bought  by   the  firm,   but  before  the   firm  given  for  the  amount,  signed  by  B.      It 

note    was    given.      A    joint    action    was  was  held,  that  A.  was  thereby  diseharo-ed. 
brouglit  by  the  promisee  against  the  ad-         (/))  Bedfonl    v.    Deakin,   2    R.    &   Aid. 

ministrator  oJ"  tlie  deceased  and  the  part-  210  ;  Hart  v.  .Alexander,  2  M.  &  W.  484  ; 

ner  who  gave  the  note,  and  there  was  a  Harris  v.  Farwell,  15  P>eav.  31;  Yarnell  v. 

count  for  the  note  and  one  for  goods  sold  Anderson,  14  Mo.  619.     See  also  Sheehy 

and  delivered.     The  court  held  that  the  v.   Mandeville,  6  ('ranch,  264  ;    Stephens 

inquisition  of    lunacy    found  against   the  v.  Thompson,  28  Vt.  77  ;    Isler  v.  Baker, 

partner,  ipso  facto,  dissolved  the  partner-  6  Humph.  85. 


ship  ;  but  that  the  note,  being  good 
against  the  giver,  discharged  the  debt  of 
the  firm  on  account  ;  and,  a  verdict  hav- 
ing been  found  against  the  joint  defend- 
ants, ordered  a  new  trial. 

In  Harris  v.  Lindsay,  4  Wash.  C.  C. 


(q)  Arnohl  v.  Camp,  12  Johns.  409. 

(r)  That  mere  delay  to  sue  a  principal 
rloes  not  discharge  a  surety,  see  Freeman's 
Bank  v.  Rollins,  13  Me.  202  ;  Townsend 
V.  Riddle,  2  N.  H.  448  ;  Strong  v.  Foster, 
17    C.    B.     201  ;    Hunt    v.    Bridgham,    2 


98,  271,  A.  &  B.  were  in  ])artnership,  and     Pick.  581.     See  also  2  Pars,  on  Cont.  (5th 
A.   retired,  and  B.  went  on  with  another     ed.)  26,  note  (/)  and  cases  cited, 
person  ;  and  afterwards  this  firm  was  dis-  (s)  In  such  a  case,  the  agreement  is  of 

solved   and   another    formed,    which   was     no  effect.     Reynolds   v.   Ward,   5   Wend, 
also   dissolved.      The    amount   due   from     501  ;  Hogaboom   v.   Herrick,  4  Vt.   131  ; 
these  three   firms   to  a  creditor  of  all  of    death  v.  Sims,  5  How.  192. 
them   was   consolidated,    and   three  notes  {t)  Oakelley   v.  Pasheller,  4   CI.   &   F. 

207,  10  Bligh,  N.  s.  548. 
27 


418  THE   LAW   OF   PARTNERSHIP.  [Ctt.  XIII 

If  the  creditor  takes  new  security,  retaining  the  old,  without 
any  specific  arrangement,  it  might  be  thought  that  such  a  trans- 
action implied  precisely  the  change  above  spoken  of ;  that  is,  an 
acceptance  of  the  new  firm,  who  give  this  security,  as  principal 
debtors,  and  of  the  former  partner  as  their  surety.  It  seems 
rather  to  be  regarded,  however,  as  not  affecting  the  liability  of 
the  retiring  partner  at  all.  And  the  creditor  in  such  case  retains 
the  liability  of  the  retiring  partner,  although  that  partner  did  not 
himself  know  that  the  old  securities  were  retained,  {u) 

Generally,  if  a  person  having  a  demand  against  a  firm  gives 
up  the  evidence  of  it  to  one  of  the  partners,  that  he  may  collect 
it  from  the  others,  and  thus  enables  him  to  represent  to  the 
others  that  he  has  paid  the  debt,  and  they  settled  with  him  on 
this  basis,  we  should  not  consider  the  partners  so  settling  as 
liable  to  the  creditor ;  but  if  the  partner  merely  says  to  them 
that  he  has  the  evidence  of  the  debt,  and  does  not  produce  it, 
and  they  settle  with  him  as  above,  they  do  it  at  their  own 
risk,  (u) 

It  is  quite  clear,  that  if  the  creditor,  when  he  receives  the  new 
securities,  expressly  reserves  all  his  rights  against  the  old  firm 
or  retiring  partner,  he  retains  them  unimpaired,  (w.  )  And  the 
question  always  exists,  where  there  is  neither  express  reservation 
nor  express  release,  whether  the  whole  transaction,  illustrated  by 
such  circumstances  as  indicate  the  intention  of  the  parties,  falls 
within  one  or  other  of  the  principles  above  stated. 

§328.  Consent  whether  implied  from  Silence. — Frequently  the 
new  firm  goes  on  in  its  regular  business,  the  accounts  of  the  cus- 
tomers are  transferred  from  the  old  to  the  new,  and  the  custom- 
ers, knowing  the  retirement  and  change  of  parties  and  transfer 
of  accounts,  say  nothing,  but  continue  their  dealings  with  the 
new  firm  ;  perhaps  depositing  and  drawing,  or  buying  and  selling, 
or  receiving  interest  and  settling  accounts,  all  just  as  before, 
taking  no  particular  notice  of  the  change.^  The  question  then 
occurs,  What  is  the  legal  significance  and  effect  of  such  conduct? 

{u)  See  Harris   v.   Lind.say,   4  Wash.  (w)  Bedford  v.  Deatin,   2  Stark.    178, 

C.  C.   271,   and  cases  cited  in  note  (w),  2  B.  &  Aid.   210  ;  Yarnell    v.  Anderson, 

infra.  14  Mo.  619  ;  Smith  v.  Kogers,  17  Johns. 

Ir;)  Featherstone  v.  Hunt,   1  B.  &  C  340. 
1130. 

1  Mere  silence  on  the  part  of  the  creditor  is  not  enough  to  bind  him  :  an  express 
assent  on  his  part  to  the  arrangement  must  be  shown  in  order  to  discharge  the  retiring 
partner.  Campbell  v.  Floyd,  (Pa.)  25  Atl.  1033  ;  Wadhams  v.  Page,  1  Wash.  St.  420, 
25  Pac.  462  ;  Barnes  v.  Boyers,  34  W.  Va.  303,  12  8.  E.  708.  But  see  Anderson  v. 
Holmes,  14  S.  C.  162. 


329.] 


OP    A    CHANGE   IN   THE   PARTNERSHIP. 


419 


and  it  seems  to  be  well  settled  that  the  mere  receiving  of  interest 
from  the  new  lirm  will  not  discharge  the  old  ;  {x}  and  although 
the  transferring  the  old  account  to  the  new  firm  is  not  necessarily 
an  adoption  by  the  creditor  of  the  new  fii-ni  as  his  sole  debtors,  (y) 
yet  this  fact,  together  with  the  other  circumstances  of  the  case, 
may  be  evidence  from  which  a  jury  would  be  authorized  to  find 
that  the  creditor  hud  impliedly  assented  to  the  discharge  of  the 
old  firm,  (z)  An  eminent  English  judge,  speaking  of  a  case  in 
which  the  retiring  partner  was  held,  says :  "  The  court  was  sub- 
stituted for  a  jury  in  that  case ;  and  I  very  much  doubt  whether 
twelve  merchants  would  have  determined  it  as  the  court  did."  (a) 
And  he  appears  to  think  that  what  the  merchants  would  do,  that 
the  court  should  do. 

In  respect  to  the  burden  of  proof,  it  has  been  held,  that  when 
the  liability  at  a  given  time  of  all  the  partners  is  proved,  the 
burden  is  on  those  of  them  who  seek  to  escape  continued  liability, 
to  show  a  cessation.  (A) 

§  829.  Liability  of  Retiring  Partner  for  Trust  Money.  — In  a  few 
cases,  the  question  has  arisen,  as  to  the  continued  liability  of  a 
retiring  partner  for  money  applied  to  partnership  uses  with  the 


(x)  In  Gough  V.  Davies,  4  Price,  200, 
it  was  held  that  a  person  depositing 
money  with  his  bankers,  and  taking  their 
accountable  receipts,  does  not,  by  con- 
tinuing to  leave  his  money  in  the  bank 
after  the  dissolution  of  the  original  firm 
and  the  constitution  of  a  new  one,  which 
consists  of  some  members  of  the  old  bank 
and  of  other  persons,  discharge  the  part- 
ners who  have  retired,  although  he  receives 
interest  regularly  from  the  new  firm,  gives 
them  no  notice,  and  continues  to  transact 
business  with  them  for  four  years  and 
until  their  insolvency.  In  Harris  v.  Far- 
well,  15  Beav.  31,  a  customer  of  a  bank- 
ing firm  had  deposited  money  in  it  on 
interest.  On  the  death  of  one  of  the 
firm,  the  business  was  carried  on  by  the 
survivors  and  a  new  member.  A.  received 
interest  from  the  new  firm  until  their 
bankruptcy,  and  then  made  an  affidavit 
that  the  new  firm  was  indebted  to  him  for 
money  had  and  received  by  them  to  his 
use.  It  was  held  that  the  fact  that  in- 
terest was  paid  was  not  conclusive,  be- 
cause it  might  have  been  paid  by  them 
as  agents,  and  that  the  affidavit  could  not 
be  construed  as  an  agreement  to  dischars:e 


the  old  firm.  See  also  Daniel  v.  Cross,  3 
Ves.  277  ;  Devaynes  v.  Noble,  1  Meriv. 
529,  566  ;  Blew  v.  Wyatt,  5  C.  &  P.  397. 

(y)  See  Ex  parte  Appleby,  2  Deacon, 
482  ;  Kirwan  v.  Kirwan,  2  Or.  &  JI.  617. 

(::)  See  Thompson  v.  Percival,  5  B.  & 
Ad.  925  ;  Hart  v.  Alexander,  2  M.  &  W. 
483 ;  Brown  v.  Gordon,  16  Beav.  302. 
In  Benson  v.  Hadfield,  4  Hare,  32,  there 
is  a  dictum,  that  where  a  partner  retires 
from  a  firm,  and  a  customer  has  notice  of 
his  retirement,  and  afterwards  continues 
his  dealing  with  the  new  firm,  without 
making  any  claim  on  the  retired  partner, 
a  jury  may,  from  the  circumstances,  pre- 
sume that  the  customer  agreed  to  dis- 
charge the  retired  partner,  and  to  accept 
the  new  firm  as  debtors,  instead  of  the 
old  one.  In  deciding  whether  such  an 
agreement  ought  to  he  presumed,  the  na- 
ture of  the  dealings  subsequently  to  the 
retirement,  the  form  of  the  accounts  ren- 
dered, the  time  elapsing,  and  other  cir- 
cumstances, are  most  material. 

(a)  Hart  v.  Alexander,  2  M.  &.  AV. 
493. 

(b)  Kirwan  v.  Kirwan,  2  Cr.  &  M.  617. 


420  THE    LAW    OF    PARTNERSHIP.  [CH.  XIII. 

knowledge  of  the  partners,  by  one  of  the  partners  who  had  tlie 
money  in  his  possession  as  trust-money.  We  cannot  donbt  what 
the  law  should  be  in  such  cases.  In  the  first  place,  this  is  to 
all  intents  a  borrowing  of  money  by  the  firm.  It  may  be  said, 
it  is  a  borrowing  from  one  of  the  partners,  and  if  he  agrees  with 
another,  who  retires,  never  to  call  upon  him  for  the  debt,  there  is 
an  end  of  it.  But  it  is  plain  that  the  borrowing  is  not  —  at  least 
in  etiuity,  and  we  think  that  courts  of  law  would  adjudicate  such 
a  (piestion  on  ])rinciples  of  equity  —  a  borrowing  from  the  part- 
ner who  is  trustee,  but  from  the  cestui  que  trust,  or  from  the 
trust-fund.  It  is  scarcely  possible  that  such  use  of  trust-money 
is  legal  and  proper  as  against  the  cestui  que  trust,  without  his 
express  consent.  Nothing  is  gained,  therefore,  by  showing  that 
the  legal  estate,  and  all  legal  rights,  are  in  the  lending  partner ; 
for,  if  he  exercises  these  rights  in  an  illegal  way,  they  who  arc 
participant  of  the  wrong  cannot  be  permitted  to  profit  by  it. 
We  say,  therefore,  that  a  retiring  partner  should  be  held  for  such 
a  debt,  unless  he  show,  expressly  or  by  sufficient  implication,  a 
receipt  or  release  from  the  parties  who  are  actually  interested  in 
the  trust-fund,  and  are  competent  to  give  such  release,  and  who 
give  it  for  some  legal  consideration,  (c)  But  if  a  partner  holding 
the  money  of  a  stranger,  as  his  agent,  puts  that  money  into  the 
firm,  this  does  not  make  the  stranger  a  partner,  {cc) 

§  330.  Appropriation  of  Payments.  —  The  general  principles 
which  are  ai)i)licable  to  this  subject  are  these :  If  money  is  paid, 
the  paying  debtor  may  appropriate  it  as  he  will ;  if  he  does  not, 
the  creditor  may ;  if  neither  do,  the  law  will  appropriate  it  in 
such  way  as  will  do  justice  to  all  parties,  (d)  Of  these  three 
rules,  the  first  is  clear  and  unqualified  :  no  doubt  exists  that  one 
who  owes  many  debts  may  insist  that  his  payment  shall  discharge 
which  of  them  he  will ;  and,  if  he  points  it  out,  the  acceptance  of 
the  money  discharges  that  debt,  (e)     The  second  may  not  be  so 

(c)  Dickenson  v.  Lockyer,  4  Ves.  36  ;  berger,  22  Pa.  492  ;  Sneed  v.  Wipster,  2 
Smith  V.  Jameson,  5  T.  R^  601.  A.  K.  Marsh.  277. 

{cc)  Harper  v.  Lampsing,  .33  Cal.  650,  (c)  Whether   the    debtor    has    appro- 

(d)  Simson  v.  Ingham,  2  B.  &  C.  65  ;  priated  the  payment  or  not,  is  a  qnestion 
Jones  V.  Maund,  3  Younge  &  C.  Exeh.  of  intent  for  the  jury.  As  to  what  cir- 
347  ;  Brazier  o.  Bryant,  2  DowL  P.  C.  cumstances  will  warrant  a  finding  of  such 
477  ;  Chitty  v.  Naish,  2  Dowl.  P.  C.  511 ;  appropriation  by  the  debtor,  see  Tayloe  r. 
Peters  v.  Anderson,  5  Taunt.  596  ;  Alex-  Sandiford,  7  WHient.  14  ;  Mitchell  v.  Dall, 
andria  v.  Patten,  4  Cranch,  317  ;  Cremer  2  H.  &  G.  159,  4  Gill  &  J.  361 ;  Fowke  v. 
V.  Higginson,  1  Mason,  338  :  Franklin  Bowie,  4  H.  &  J.  566  ;  Robert  i'.  Garnie, 
Bank  v.  Hooper,  36  Me.  222 ;  Hamilton  3  Caines,  14  ;  West  Branch  Bank  v. 
V.  Benbury,  2  Hayw.  385 ;  Hargroves  v.  Moorehead,  5  W.  &  S.  542  ;  Scott  v. 
Cooke,  15  Ga.  221 ;  Pennj'packer  v.  Urn-  Fisher,  4  T.  B.  Mon.  387  ;    Stone  v.  Sey- 


§  330.] 


OF    A    CHANGE    IN    THE    PARTNERSHIP. 


421 


certain.  Some  authorities  have  inclined  to  require  of  the  creditor 
an  ap[)ropriation  at  the  time  of  payment,  saying  that,  if  it  be  not 
then  appro|)riated,  the  law  will  determine  any  subsequent  appro- 
priation. This  is  the  rule  of  the  civil  law.  (/)  But  we  consider 
it  well  settled  that  this  is  not  the  rule  of  the  common  law  ;  for 
althouuh  it  is  clear  that  a  creditor  cannot  wait  until  the  time  of 
the  trial  to  make  his  appropriation,  (^)  or,  it  would  seem,  until  a 
controversy  has  arisen,  (A)  yet  he  is  not  obliged  to  make  the 
apj)ropriation  immediately,  but  may  wait  a  reasonable  time.  (/) 
Tlie  reason  of  the  rule  would  be,  jjcrhaps,  as  well  satislied  by  say- 
ing, that  the  creditor  nuiy  make  his  election  and  api)ropriation 
at  any  time  before  a  change  of  circumstances  takes  place  which 
would  vary  the  rights  of  the  parties,  and  therefore  render  an 
appropriation  favorable  to  the  creditor  injurious  to  some  one 
else,  (j)  The  right  of  an  appropriation  by  the  creditor  is  not 
conclusively  exercised  by  entries  in  his  books,  if  these  are  not 
connnunicated  to  the  other  party  ;  (^:)  but  the  entries  are  decisive 


niour,  1.')  (WiMul,  19  ;  Newiiiavch  v.  Clay, 
14  East,  239  ;  Shaw  v.  Picton,  4  B.  & 
C.  715.  If  the  debtor  pay  with  one 
intent  and  the  creditor  receive  with 
another,  the  intent  of  the  debtor  shall 
govern.  Keed  v.  Boardman,  20  Pick. 
441.  It  is  not  necessary  for  the  debtor 
who  pays  money  to  make  a  specific  ap- 
propriation of  it  at  tiie  time  of  the  paj'- 
ment :  it  is  sufficient,  if  it  can  be  collected 
from  other  circumstances,  that  he  in- 
tended at  the  time  of  payment  to  appro- 
priate it  to  a  speciHc  purpose.  Shaw  v. 
Picton,  4  B.  &  C.  715  ;  Waters  v.  Tomp- 
kins, 2  Cr.  M.  &  R.  723. 

(/)  That  this  is  the  rule  of  the  civil 
law,  see  Di^'.  lib.  46,  tit.  3,  §  1,  3.  See  also 
Clayton's  Case,  Devaynes  v.  Noble,  I 
Meriv.  572.  In  Hill  v.  Southerland,  1 
Wash.  (Va.)  133,  it  is  said,  that  it  is 
incumbent  on  the  creditor  to  make  a 
recent  application  by  entries  in  his  books 
or  papers,  and  not  to  keep  parties  and 
securities  in  suspense,  changing  their  sit- 
uation from  time  to  time,  as  his  interest 
governed  by  events  might  dictate. 

((/)  United  States  v.  Kiikpatrick,  9 
W'heat.  737. 

(A)  See  dic/a  in  United  States  v.  Kirk- 
patrick,  9  Wlieat.  737,  per  Story,  J.  ; 
Fairchild  v.  Holly,  10  Conn.  184,  per 
Williams,  J. 


(/)  Sec  Fairchild  v.  Holly,  10  Conn. 
184,  per  Williams,  J.  ;  Alexandiia  v. 
Patten,  4  Cranch,  317  ;  Simson  v.  Ingham 
2  B.  &C.  65. 

{j  )  In  Alexandria  v.  Patten,  4  Cranch, 
317,  the  judge  in  the  court  below  ruled, 
that  if  the  debtor  at  the  time  of  making 
the  payment  did  not  direct  to  which  ac- 
count it  should  be  applied,  then  the 
creditor  might  immetliately  make  the 
application;  "  hut  such  application  must 
have  been  recent,  and  bpfore  any  alter- 
ation had  taken  place  in  the  circumstances 
of"  the  debtor.  In  delivering  the  opin- 
ion of  the  court,  granting  a  new  trial, 
Marshall,  C.  J.,  said  :  "  No  principle  is 
recollected  which  obliges  the  creditor  to 
make  this  apjilication  immeiliately  .  .  . 
In  declaring  that  the  election,  which  they 
supposed  to  devolve  on  the  plaintitf,  if 
the  application  of  the  money  was  not 
understood  at  the  time  by  the  parties,  was 
lost  if  not  immediately  exercised,  the 
court  erred.  "  No  notice  ayipears  to  have 
been  taken  of  the  other  branch  of  the 
ruling,  viz.,  that  the  application  must  be 
before  any  change  of  circumstances,  which 
certainly  a))pears  to  be  a  reasonable  rule. 

(k)  In  Simson  v.  Ingham,  2  B.  &  C. 
65,  there  were  transactions  between  a 
London  banking  com]>any  and  a  country 
firm.     On  the  death  of  one  of  the  members 


422  THE    LAW    OP    PARTNERSHIP.  [CH.  XIII. 

of  the  question,  if  the  charges  are  made  by  the  consent  of  all  the 
parties.  (/) 

§  331.  Appropriation  by  New  Firm.  —  We  apply  thesc  ))rinciples 
to  the  case  of  a  retiring  partner,  thus  :  For  the  debts  existing 
when  he  retires,  he  continues  responsible ;  for  new  ones,  created 
after  his  retirement  (the  requisite  notice  having  been  given),  he 
is  not  resitonsible  ;  and  when  the  remaining  partner,  or  the  new 
i]vm,  pai/  money  after  his  retirement,  if  that  is  appropriated  to 
the  old  debts,  it  relieves  the  retiring  partner  ;  if  to  the  new  debts, 
the  old  debts  are  nut  jjaid,  and  the  retiring  partner  remains 
responsible. 

Now,  the  firm  which  pays  is  the  paying  debtor;  and,  by  the 
first  rule  above  stated,  has  the  right  of  appropriating  its  payment. 
Nor  is  there  any  limit  to  the  exercise  of  this  right,  excepting  the 
universal  limit,  that  it  must  not  be  exercised  fraudulently.  If 
the  new  firm  pay  money  which  is  a  part  of  its  old  fund  or  of  the 
profits  of  its  old  business,  and  which  the  retiring  partner  had  a 
right  to  have  appropriated  to  the  old  debts,  and  believed  was  so 
appropriated,  any  appropriation  by  the  new  firm  of  such  payment 
to  the  new  debts  would  be  fraudulent,  and  therefore  void  so  far  as 
the  new  firm  was  concerned.  If  the  receiving  creditor  knew 
notliing  of  the  appropriation,  he  could  not,  on  learning  it  after- 
wards, set  it  up  against  the  retiring  ))artner  ;  if  he  knew  it  and 
the  accompanying  facts,  he  would  be  ])articipant  in  the  fraud,  and 
therefore  could  not  enforce  it ;  if  he  knew  the  appropriation, 
hut  did  not  know  the  attendant  circumstances,  and  therefore  was 
personally  innocent,  the  question  woidd  be  more  difficult.  We 
should  say,  however,  that  the  retiring  partner  now  would  not  be 
bound  by  it.  It  would  be  somewhat  like  a  transfer  of  his  prop- 
erty, without  his  consent  or  authority,  which  could  give  no  title  to 

of  the  country  bank,  a  balance  was  due  the  firm  up  to  tlie  time  of  the  death  ot  the 

London  bankers.     During  the  month  fol-  partner  ;  and   tlie   other,  a   new  account, 

lowing,  the  London  banker  received  sums  containing  all  jjayments  and  receipts  snl), 

in  payment  more  than  sufficient   to   dis-  sequent    to   that    time.     The    court    heU 

charge  the  balance  due  ;  but  during  the  that  the  entry  of    the    payments  to    tl.n 

same  time   they  advanced  money  on   ac-  credit  of  the  old  accouTit,  by  the  London 

count  of  the  country  bank,    to  an    equal  bankers,  not  being  communicated   to    th»* 

amount.     At   first,    the   London    bankers  country  bank,  did  not  amount  to  a  com, 

entered    in    their   books   all   receipts   and  plete  ai)i)ropriation  ;  and  that  the  London 

jiayments,    made   after   the   death   of  the  bankers   might   apply   the   payments    re. 

deceased    partner   to   the   account   of  the  ceived  subsequently  to  the   death  of  the 

old   firm  ;    but   they   did   not    send    any  deceased  partner  to  the  debt  of  the  new 

account  to  the  country  bankers  until  two  firm.     See  also  Barker  v.  Blake,  11  Mass. 

months  after    the    death   of   the   deceased  16. 

partner,  and  then  they  sent  two  distinct  (/)  AUcott  v.  Strong,  9  Cush.  323. 
accounts,  — one   the   account   of    the   old 


§  333.]  OF    A    CHANGE    IN    THE    PARTNERSHIP.  423 

it  even  to  an  innocent  holder.  Nor  could  the  holder  complain  ; 
because,  not  having  himself  appropriated  the  money,  he  would  be 
in  the  same  position  as  if  the  firm  had  not.  (wi) 

Jiut  if  the  new  firm,  honestly,  and  for  adequate  business  causes, 
appropriated  the  payment  to  the  new  debts,  —  as,  for  example, 
because  they  had  bought  goods  on  a  very  short  credit  of  an 
old  customer  whose  earlier  claims  had  not  matured,  or  in  any 
such  cases,  —  the  approjjriation  would  doubtless  bind  the  retiring 
partner. 

§  332.  Appropriation  by  Creditor.  —  If  the  paying  firm  make 
no  aj)propriation  at  all,  the  receiving  creditor  may  make  any 
which  is  honest.  If,  in  expectation  of  the  insolvency  of  the  new 
firm,  he  discharged  iheir  debts,  leaving  those  unpaid  on  which  he 
could  hold  the  retiring  partner,  it  might  well  be  doubted  whether 
this  appropriation  was  honest,  and  therefore  whether  it  was  valid. 
8o,  if  he  made  no  appropriation  until  he  had  learned  the  insol- 
vency of  the  new  firm,  and  then  made  his  entries  so  as  to  hold 
tlie  retiring  partner, 'this  would  not  be  valid.  (?i)  But,  as  before, 
an  appropriation  made  by  him  of  unappropriated  payments,  made 
in  a  manner  and  at  a  time  not  indicative  of  wrongful  purpose, 
would  be  binding  on  all  parties.  It  scarcely  needs  to  be  said,  that 
no  party,  having  distinctly  made  an  appropriation,  would  be  per- 
mitted afterwards  to  change  it,  for  his  own  benefit  and  to  the 
injury  of  others,  (o) 

§  333.  Appropriation  by  the  Law.  —  If  the  appropriation  became 
matter  of  law,  the  leading  principle  would  be,  to  do  justice  by  it 
to  all  concerned,  and  the  first  rule  for  carrying  this  into  effect  is, 
to  appropriate  payments  in  order  of  time ;  that  is,  the  first  pay- 
ment would  be  appropriated  to  the  oldest  debt,  the  next  to  the 
next,  and  so  on.  And  no  general  equities  between  the  parties 
would  be  suffered  to  disturb  this  order,  unless  they  were  very 

(m)  Thompson  v.  Brown,  Mooily  &  M.  items  ;  and  that  the  case  of  Thompson  v. 

40.     See  also  Fairchild  v.  Holly,  10  Conn.  Brown,  siqira,  did  not  apply  because  T. 

175;   Johnson   v.   Boone,   2  Harr.    (Del.)  was  liable  to  the  plaintiff  lor  the  entire 

172  ;  Sneed  v.  Wiester,  2  A.    K.   Marsh,  debt   due   upon   both   accounts.     But   in 

277.  such   a  case  it   has   been    held,  that  the 

In  Smith    v.   Wigley,   3    Moore    &   S.  creditor  may  apply  the  payment  in  dis- 

174,  W.  &  T.  were  partners,  and  indebted  charge  of  the  individual  debt,  and  not  to 

to  the  plaintiff.     They  dissolved  the  part-  the  debt  due  by  the  firm, 
nership,    and  T.    became   indebted   after-  (n)  See  cases  ante,  §  3.30,  and  notes, 

wards   on  his   separate   account.     It  was  (o)  This  principle  is  admitted  in  Sim* 

held,  that  payments  by  T.  after  the  dis-  son  v.  Ingham,  2  B.  &  C.   65.     See  antCf 

solution   must  go    in    reduction    of   the  §  330,  note  {(), 
entire  account,  and  discharge  the  earliest 


424 


THE   LAW   OP   PARTNERSHIP. 


[CH.  XIII. 


strong,  (p)  But  the  court  would  respect  any  indication  of  aj)})ro- 
priation  arising  from  the  payments  themselves.  Thus,  if,  when 
purchases  were  made,  bills  were  given,  a  bill  for  each  purchase, 
each  idcutificd  by  its  exact  amount,  or  by  the  term  of  credit,  or 
both,  the  payment  of  money  for  that  bill  would  of  course  not  only 
take  it  up,  but  would  pay  for  that  })urchase  ;  and  the  same  jirin- 
cij)le  would  require  that  if  no  bills  were  given,  Ijut  pui-chases 
were  made  on  definite  credits,  payments  answering  exactly  in 
time  and  amount  to  those  credits  would  be  appropriated  to  them, 
without  inquiring  whether  these  were  earlier  or  later  debts,  ((y) 
And,  generally,  any  payments  of  which  the  appropriation  seemed 
to  be  indicated  or  required  by  business  arrangements  would  be 
ado|)ted  by  the  courts,  (r) 

§  334.  Appropriation  to  Debt  of  Owner.  —  One  of  the  most  Cer- 
tain indications  might  arise  from  asking  to  whom  did  the  money 
belong.  It  is  perfectly  obvious  that  if  the  money  belongs  to  an 
old  firm,  it  must  pay  the  debts  of  that  firm;  if  to  the  new  firm, 
it  must  pay  their  debts.  Indeed,  this  is  saying  no  more  than 
"  No  creditor  can  pay  the  debt  of  one  person  with  the  money  of 
another."  (i-)     If  a  person  has  an  account  with  a  banking  firm 


(p)  See  cases  in  the  two  following 
notes. 

iq)  See  Taylor  v.  Kymer,  3  B.  &  Ad. 
320.  Thus,  where  an  agent  who  had,  in 
a  previous  account,  charged  himself  with 
a  balance  due  from  him,  continued  to  re- 
ceive money  for  his  jirincipal  and  to  pay 
money  out,  it  was  held,  that  his  payments 
were  not  necessarily  to  be  first  applied  to 
the  extinction  of  the  previous  balance, 
where  the  receipts  were  e(iual  to  the  pay- 
ments. Lysagt  V.  Walker,  5  Bligh, 
N.  s.  1. 

(>•)  See  Taylor  v.  Kymer,  3  B.  &  Ad. 
320 ;  Stoveld  v.  Eade,  4  Bing.  154  ; 
Newniarch  v.  Clay,  14  East,  240.  In 
Wiekham  v.  Wickliam,  2  Kay  &  J.  478, 
J.  F.  &  Sons,  as  agents  of  the  plaintiffs, 
sui)plie(l  goods  to  the  firm  of  S.  &  W. 
upon  the  footing  of  the  latter  becoming 
debtors  to  the  plaintiffs.  They  also  sup- 
])lied  the  same  firm  with  other  goods  on 
their  own  behalf,  and  made  no  distinction 
in  their  accounts.  E.  F.  was  a  partner  in 
both  firms.  It  was  held,  that  communi- 
cations made  by  the  firm  of  J.  F.  &  Sons 
to  the  plaintiffs,  admitting  a  large  debt 
due  from  the  firm  of  S.  k  W.,  and  under- 


taking that  E.  F.  would  use  his  hiflueiice 
as  a  partner  with  S.  &  W.  to  secure  its 
reduction,  upon  the  faith  of  which  com- 
munication the  plaintifis  forbore  to  sue 
S.  &  AV.,  precluded  the  firm  from  treating 
their  debt  to  tlie  plaintiffs  as  one  which 
had  been  liipiidated  by  the  appropriation 
of  the  jiayments  made  by  tliem  to  the  firm 
of  J.  F.  &  Sons,  in  order  of  date.  lu 
Henniker  v.  Wigg,  4  Q.  B.  793,  wliere  a 
bond  was  given  to  secure  payments  by  A 
to  B.  of  a  si)ecified  sum,  and  certain  pay- 
ments were  afterwards  made  by  A.,  Lord 
Denman,  C.  J.,  after  stating  the  general 
rule,  that,  where  there  is  an  open  account, 
the  first  item  on  the  debit  side  is  dis- 
charged by  the  first  item  on  the  credit 
side,  said  :  "  But  it  is  equally  certain 
that  a  ]iarticular  mode  of  dealing,  and 
more  es])eciall}'  any  stipulation  between 
the  parties,  may  entirely  vary  the  case  ; 
and  tliis  would  be  the  effect  in  the  present 
instance,  if  it  should  appear  that  this 
bond  was  given  to  secure  the  plaintiffs 
against  advances  whi;'h  they  miglit  from 
time  to  time  make  to  the  defendant." 

(s)  See  cases,  ante,  §§  330,  331,   and 
note  (l). 


§  334.] 


OP   A    CHANGE   IN   THE   PARTNERSHIP. 


425 


which  is  dissolved,  and  his  account  continues  as  before,  so  that 
the  transactions  before  and  after  the  dissolution  are  comprised  in 
one  account,  payments  made  by  the  new  firm  are  construed  to  be 
in  liquidation  of  the  earliest  items  on  the  joint  account,  and  not 
of  the  new  account  merely.  (0  And  if,  upon  the  dissolution, 
the  old  account  is  struck,  and  the  balance  due  carried  to  a  new 
account,  and  del)ts  are  afterwards  incurred  and  payments  made 
generally,  the  payments  are  first  applied  to  li(]uidate  tbe  first 
item,  —  the  balance  of  the  old  account.  (?<)  But,  if  a  new  account 
is  opened  with  the  new  firm,  the  creditor  may  apply  a  ireneral 
payment  to  the  new  account,  {v}  And,  in  ueneral,  the  doctrine 
of  appropriation,  and  the  right  of  election,  apply  only  where  the 
del)ts  or  accounts  are  distinct  in  themselves,  and  are  so  regarded 
and  treated  by  the  parties.  If  the  whole  may  be  considered  as 
one  continuous  account,  the  general  rule  is,  that  the  payments  are 
to  be  applied  to  the  earliest  items  of  the  account,  (w) 


(/!)  Clayton's  Case,  Devaynes  v.  Noble, 
1  Meiiv.  572  ;  Peinberton  v.  Oakes,  4 
Ku9s.  168  ;  Siiiison  v.  Ingham,  2  B.  & 
C.  65,  per  Bayley,  J.  ;  Simson  v.  Cooke, 
1  Bing.  452  ;  Williams  i\  Kawlinson,  3 
Bing.  71  ;  Field  v.  Carr,  5  Bing.  13  ; 
Bodenhani  v.  Purchas,  2  B.  &  Aid.  39  ; 
Smith  V.  Wigley,  3  Moore  &  S.  174 ; 
Livermoie  v.  Rand,  26  N.  H.  85  ;  Allcott 
V.  Strong,  9  Cash.  323  ;  Farnam  v.  Bou- 
telle,  13  Met.  159.  See  also  Penuell  v. 
Deffell,  4  De  G.  M.  &  G  372  ;  Beale  v. 
Caddick,  2  H.  &  N.  326.  And  this  rule 
applies  as  well  between  partners  them- 
selves as  between  partners  and  third  per- 
sons. Touhnin  v.  Copland,  3  Younge  & 
C.  (Exch.)  625,  7  CI.  &  F.  349.  In  New- 
march  V.  Clay,  14  East,  239,  there  were 
three  partners,  one  of  them  being  dormant 
and  nnknown.  Goods  had  been  furnished 
to  them  by  the  plaintitf,  and  bills  received 
in  payment.  The  partnership  was  then 
dissolved,  the  dormant  partner  retiring. 
Other  goods  were  then  furnished,  and  the 
bills  given  before  the  dissolution  of  the 
partnership  were  dishonored,  and  new 
bills  given,  which  were  more  than  suffi- 
cient to  cover  the  debts  of  the  old  part- 
nership. It  was  held  that  the  delivering 
up  the  old  bills,  on  receipt  of  the  new, 
was  evidence  of  a  particular  appropriation 
of  the  new  bills  in  payment  and  discharge 
of  the  old  debt,    of   which  the   dormant 


partner  might  avail  himself  in  an  action 
on  the  case  for  goods  sold  and  delivered, 
brought  against  him  jointly  with  the  other 
two  partners. 

((()  Sterudale  v.  Hankinson,  1  Sim. 
393  ;  Allcott  v.  Strong,  9  Cush.  323. 

(v)  Logan  V.  Mason,  6  W.  &  S.  9. 
See  Simson  v.  Ingham,  2  B.  &  C.  65, 
cited  supra,  §  330,  note  (j). 

(w)  Clayton's  Case,  Devaynes  r.  Noble, 

1  Meriv.  609.   See  also  Brooke  v.  Enderby, 

2  Br.  &  B.  70  ;  Smith  v.  Wigley,  '3 
Moore  &  S.  174  ;  United  States  v.  Kirk- 
patrick,  9  W^heat.  720  ;  Jones  v.  United 
States,  7  How.  681  ;  Postmfister-General 
V.  Furber,  4  Mason,  332  ;  United  States 
V.  W'ardwell,  5  Mason,  82  ;  Gass  v.  Stim- 
son,  3  Sumner,  98  ;  Fairchild  v.  Holly, 
10  Conn.  175;  McKenzie  v.  Nevius,  22 
Me.  138  ;  United  States  v.  Bradbury,  2 
\Vare  (Daveis),  146.  In  Bank  of  Scot- 
land V.  Christie,  8  CI.  &  F.  214,  the  doc- 
trine of  Clayton's  Case  was  applied  to 
payments  made  to  a  bank  by  surviving 
partners,  on  a  debt  due  from  the  firm' to 
the  bank.  But  payment  will  not  be 
applied  to  the  earliest  items  in  an  account 
if  a  different  intention  is  clearly  expressed 
by  the  debtor,  or  by  both  parties,  or  where 
such  intention  can  be  gathered  from  the 
particular  circumstances  of  the  case.  See 
Taylor  v.  Kymer,  3  B.  &  Ad.  320  ;  Hen- 
niker   v.   W'igg,  4  Q.   B.    792  ;   Capen  v. 


426  THE    LAW    OP    PARTNERSHIP.  [CH.  XHI. 

§  335.  Wrong  of  Debtor  as  affecting  Application  of  Payments.  — 
If  debtors  commit  a  breach  of  trust  in  respect  to  certain  ]irop- 
erty,  and  afterwards  make  payment  generally  on  account  to  their 
creditor,  who  is  ignorant  of  the  breach  of  trust,  these  payments 
are  not  considered  as  payment  of  the  trust  account,  although  it  is 
earlier  in  date  than  the  other  items,  (a?)  And  if  payments  are 
made  on  an  open  account  for  advances,  and  some  of  these  grew 
out  of  illegal  transactions,  the  payments  are  to  be  appropriated 
to  the  reduction  of  the  legal,  and  not  the  illegal,  part  of  the 
demands.  (?/) 


SECTION   III. 

OP   AN   INCOMING   PARTNER. 

§  336.  Liability  of  Incoming  Partner. — A  new  partner  is  of 
course  liable  for  all  the  subsequent  debts  of  the  firm,  in  the  same 
manner  as  any  other  partner ;  and  it  is  equally  obvious  that  he  is 
not  liable  for  the  old  debts,  unless  he  assumes  them  for  considera- 
tion. (2!)^     If,  however,  he  assumes  them   at  all,  there  is  con- 

Alilen,  5  Met.  268  ;  Dulles  v.  De  Forest,  bankruptcy,  exclusive  of  the  amount  of 
19  Conn.  190  ;  Wilson  v.  Hirst,  1  Nev.  the  exchequer  bills,  exceeded  the  amount 
&  M.  742  ;  Beall  v.  McOiillough,  27  Md.  of  the  balance  due  at  the  time  of  the 
645.  death.  The  estate  of  the  deceased  part- 
fa:)  Claj'ton's  Case,  Devaynes  v.  Noble,  ner  was  held  liable  for  the  amount  of  the 
1    Meiiv.    572.     This   case    decided    two  exchequer  bills. 

points.     First,    that    above   stated  ;    and  {y)    Ex  parte   Randleson,    2   Deac.    & 

second,  the  following  :  Clayton  deposited  Ch.  534. 

exchequer  bills  with   a    firm    of  bankers,  (z)  Thus,  in  Young  v.  Hunter,  4  Taunt, 

for  safe-keeping ;    and  directed   tliem   to  582,  and  in  Ketchum  v.  Durkee,  Holf.  Ch 

take  in  exchange  for  them,  at  their  ma-  538,  it   was   held,  that  the  fact  that  the 

turity,  other  bills  to  be  held  by  them  in  new  partners  derived  a  benefit  from  goods 

the  same  manner,  and  to  apply  the  pro-  sold  to  the  old  firm  did  not  render  them 

ceeds  to  their  own  use.     There  was  also  a  liable  for  the  price  of    the  goods.     So,  if 

general  banking  account  between  the  par-  the  goods  are  ordered  before  and  delivered 

ties.     One  of  the  partners  died,  and  the  after  he  joins,  he  is  not  liable.    AVhitehead 

firm  some  time  afterwards  became  insol-  v.  Barron,  2  Moody  &  II.  248.     See  also 

vent.     Between  the  death  and  the  bank-  Beale  v.  Mouls,  10  Q.  B.  976  ;  Bremner  v. 

nTf)tcy,  the  payments  niade  to  Clayton  by  Chamberlayne,  2  C.  &  K.  560  ;  Keriidge  '-. 

the  survivors  exceeded  the  amount  of  the  Hesse,  9  C.  &  P.  200  ;  Beech  v.  Eyre,  5  M. 

cash  balance  due  at  the   death,   and  the  &  G.  415.   And  a  member  of  a  provisional 

amount  of  the  bills.     But  their  receipts  committee  is  not  liable  for  services  per- 

on  his  account,  during  this  time,  exceeded  formed  for  the  company  after  he  joins,  if 

the  sum  jiaid  ;  and  the  balance  due  at  the  they  are  performed  in  consequence  of  an 

1  Where  a  new  partner  is  admitted  to  a  firm,  or  an  old  partner  leaves  it,  a  new  ]iart- 
nership  is  formed  ;  and  neither  the  incoming  partner  nor  the  new  hrm  is  liable  for  the 


§  336.]  OF    A    CHANGE   IN   THE   PARTNERSHIP.  427 

sidcration  enough  in  his  admission  into  the  firm's  business  to 
bind  him  to  those  from  whom  the  consideration  comes.  As  to 
others,  the  question  is  more  difficult.  For  instance,  the  new  part- 
ner, by  his  contract  witli  the  old  firm,  agrees  to  assume  all  the 
old  debts,  and  be  liable  for  them  like  tlie  other  partners ;  and 
they  agree  that  he  sliall  be  jointly  interested  with  them  in  the 
stock,  tlie  business,  and  the  profits.  There  is  no  doubt  of  the 
validity  of  this  contract  as  between  the  partners ;  and,  therefore, 
if  they  or  any  one  of  them  are  obliged  to  pay  any  of  the  old  debts, 
they  will  have  as  effectual  a  remedy  against  the  new  partner  as 
they  would  have  had  if  he  had  been  with  them  when  the  debts 
were  contracted.  It  is,  however,  another  question,  whetlier  the 
creditors  of  the  firm  can  hold  the  new  partner  merely  on  his  con- 
tract with  the  old  partners. 

Older    given    previously   to    his    joining,  thousand.     Sometime   afterwards,    B.   be- 

Newtou  V.   Belcher,  12  Q.   B.  921.     And  came  a  partner  with  A.,  and  ordered  biicks 

if    goods   are    sold     to    a  firm,   and   the  from  time  to  time,  which  were  used  for  a 

old  firm  is  dissolved,  and  one  of  the  old  partnership  purjiose.      It  was  held,   that 

partners  unites  with  a  new  one,  and  forms  each  order  was  a  new  contract  ;  and  that 

a  new  firm,  the  new  partner  is  not   liable  B.  was  liable  as  partner  for  all  the  bricks 

on  a  note  given   for  the  goods   by  the  old  received  after  he  became  a  partner,  though 

jiartner  in  the  new  firm's  name.      Poin-  the  court  said,  that,  if  the  contract  had 

dexter  v.  Waddy,  6  Munf.  118.       See  also  been  for  a  certain  number  of  bricks  at  so 

Shinetf  v.  Wilks,  1  East,  48.      In  Hart  v.  much  per  thousand,    B.  would    not  have 

Tomlinson,    2  Vt.   101,  it  is  lield,  that  a  been  liable.     See  also  Helsby  v.  Mears,  5 

new  partner  is  not  liable  for  an   old  debt,  B.  &  C.  504.  But  see  Scott  v.  Beale,  6  Jur. 

although  the  firm  name  is  unchanged,  and  x.  s.  559,  for  a  case  the  soundness  of  which 

no  notice  is  given  ;  and  that,  if  the  new  seems  very  questionable.     See  Sternburg 

partner  dies  pending  the  suit  this  makes  v.  Callanan,  14  Iowa,  251,  confirmed  and 

no  difference.     In  Dyke   i;.  Brewer,  2  C.  adopted  in  Cadwallader  v.  Blair,  18  Iowa, 

&   K.    828,   a   person  agreed   with    A.    to  420  ;  Hartley  v.  Kirlin,  45  Pa.  49  ;  Thrall 

furnish    him   with     bricks   whenever    he  v.  Seward,  37  Vt.  573  ;  Updyke  ;;.  Doyle, 

wanted    them,    at    a    certain    price     per  7  R.  I.  446  ;  Francis  f.  Smith,  1  Du vail,  121. 

debts  of  the  old  firm.  First  Nat.  Bank  v.  Hall,  101  U.  S.  43;  Hatehett  v.  Blanton, 
72  Ala.  423  ;  Ringo  v.  Wing,  49  Ark.  457,  5  S.  W.  787  ;  Bracken  v.  Dillon,  64  Ga. 
243;  Paradise  v.  Gerson.  32  La.  Ann.  532;  Parmalee  v.  Wiggenhorn,  6  Xeb.  322; 
Kountz  V.  Holthouse,  85  Pa.  235  ;  Shoemaker  Piano  Mfg.  Co.,  v.  Bernard,  2  Lea,  358  ; 
Mc  Linden  v.  Wentworth,  51  Wis.  170,  8  N.  W.  118. 

So  where  the  continuing  partners  borrow  money  to  pay  a  debt  of  the  old  firm,  to 
the  lender's  knowledge,  or  give  a  new  note  in  renewal  of  a  note  of  the  old  firm,  the 
new  firm  is  not  liable.  Citizens'  Nat.  Bank  i\  Mine,  49  Conn.  236  ;  Elkin  v.  Green, 
13  Bush,  612. 

On  the  other  hand,  where  the  new  firm  borrows  money  to  pay  the  debts  of  the  old 
fii'm,  or  pays  such  debts  with  the  proceeds  of  goods  sold  to  them,  it  would  seem  clear 
that  the  lender  or  seller  ti'usted  the  credit  of  the  new  firm,  and  should  be  confined  to 
his  remedy  against  it.  Penn.  Nat.  Bank  v.  Furness,  114  U.  S.  376.  See  however 
Barbydt  v.  Perry,  57  la.  416,  10  N.  W.  820,  where  it  was  held  that  the  seller  of  goods 
in  such  a  case  was  entitled  to  be  subrogated  to  the  rights  of  creditors  of  the  old 
firm  who  had  been  paid  with  the  proceeds  of  his  goods. 


428  THE   LAW   OF   PARTNERSHIP.  [CH.  XIII. 

§  337.  Assumption  of  Old  Debts  by  Incoming  Partner.  —  It  is 
said  that  wlicrc  a  partner  comes  in,  and  agrees  to  take  all  the 
stock  and  be  liable  for  all  the  debts,  it  is  a  novation  of  the  debts, 
and  therefore  the  new  partner  is  bound.  But  by  the  law  of  nova- 
tion (which  is  perhaps  the  latest  law  borrowed  from  the  civil  law) 
the  new  debt  is  not  obligatory,  unless  the  old  one  is  discharged  ; 
and  the  old  one  cannot  be  discharged  without  the  consent  and- con- 
currence of  the  creditor.  And  on  this  ground  the  creditor  could 
not  hold  the  new  partner  merely  on  his  contract  with  the  old  ones. 
If  it  be  said  that  the  creditor's  assent  to  the  reception  of  addi- 
tional security  may  be  presumed,  it  must  be  replied,  that  this  re- 
ception of  new  security  may  also  imply  the  loss  of  the  old  security  ; 
for  it  may  be  and  often  is  the  case,  that  the  new  partner  takes  the 
place  of  an  old  and  retiring  partner.  A  bargain  between  all  the 
parties,  including  the  creditor,  that  the  old  partner  should  be  re- 
leased and  the  new  one  taken,  would  undoubtedly  be  valid.  But 
the  assent  of  the  creditor  to  such  an  arrangement  cannot  be  pre- 
sumed, («)  on  the  ground  that  it  is  necessarily  advantageous  to 
him.  On  the  whole,  we  should  say  that  the  law  of  contracts  and 
the  law  of  partnership  lead  to  the  conclusion,  that  the  new  partner 
is  not  bound  to  the  old  creditors,  unless  on  a  promise  to  them,  for 
a  consideration  ;  (^)  both  of  which  might  of  course  be  indirect, 
and  implied  by  circumstances.'      If  a  person  or  a  firm  hold  on 

(ri)  Catt  V.  Howard,  3  Stark.  5.  they  are  not  parties  to  it.  Ex  parte  Wil- 
li) In  Cooke's  Bankrupt  Laws,  538,  it  liams,  Buck,  13  ;  £a;  parte  Freeman,  liuck, 
is  said,  that  "where  new  partners  are  471;  Ex  parte  Fry,  1  Glyn  &  J.  96.  In 
taken  into  a  trade,  and  it  is  agi'eed  that  Ex  parte  Sandham,  4  Deac.  &  Cli.  812,  it 
the  stock  of,  and  debts  due  to,  the  old  is  said,  that,  to  make  the  new  firm  liable 
firm  should  become  the  capital  of  the  new  for  the  debts  of  the  old,  the  new  partners 
partnership,  and  that  the  new  firm  should  must  adopt  the  old  debts,  and  the  cred- 
take  upon  themselves  the  payuient  of  the  itors  must  assent,  either  expressly  or 
debts  of  the  old  firm,  and  the  new  part-  imjiliedly.  See  also  Ayrault  v.  Chamber- 
nership  becomes  bankrupt, — the  creditors  lain,  26  Barb.  88.  In  £'x /jarte  Williams, 
of  tlie  old  firm  may  prove  as  joint  credit-  Buck,  13,  it  is  said,  that  very  little  would 
ors  of  the  new  ;  "  citing  Ex  parte  Brig-  be  required  to  show  the  assent  of  the 
ham  (1792)  ;  Ex  parte  Clowes,  2  Brown,  creditors.  If  a  debtor,  who  has  entered 
C.  C.  .595,  &c.  This,  however,  is  not  now  the  into  a  partnership,  proposes  to  a  creditor 
law  ;  for  it  is  well  settled  that,  if  there  is  to  transfer  his  debt  to  the  firm,  and  the 
an  express  contract  between  the  partners  creditor  agrees,  he  cannot  prove  his  debt 
that  the  new  ones  shall  be  res[)onsible  for  against  the  separate  estate  of  the  debtor, 
the  debts  of  the  old  firm,  the  creditors  Ex  parte  Whitmore,  3  Deac.  365.  Sea 
cannot  sue   upon   the   covenant,    because  Stewart  v.  Rogers,  19  Md.  98. 

^  If  upon  a  change  in  the  firm  the  incoming  partner  or  the  new  firm  agrees  to  pay 
the  debts  of  the  old  firm,  the  better  view  would  seem  to  be  that  stated  in  the  text ; 
that  the  creditors  of  the  old  firm,  not  being  parties  to  the  contract,  could  not  sue  upon 
It.      If  a  creditor  agreed  (expressly  or  impliedly)  to  release  from  the  debt  the  members 


§  388.]  OF    A    CHANGE    IN    THE    PARTNERSHIP.  429 

lease  real  estate,  it  seems  that  a  new  partner,  coming  in  after  the 
lease,  will  not  be  holden  to  the  landlord  for  the  rent.  But,  if  he 
joins  with  the  old  partners  in  a  promise  to  the  landlord  to  pay  an 
increase  of  rent  for  a  consideration,  he  will  be  bound  for  this  in- 
crease, although  the  promise  is  only  oral ;  but  such  collateral  prom- 
ise will  not  bind  him  for  the  rent  originally  payable. (W;) 

§  338.  Implied  Assumption  of  Debts. — Whether  the  new  incom- 
ing partner  has  thus  assumed  the  old  debts,  is  sometimes  a  diffi- 
cult question  of  mixed  law  and  fact.  It  certainly  may  be  implied 
by  circumstances  ;  and  what  circumstances  should,  in  any  one  case, 
imply  it,  is  a  question  partly  for  the  court  and  partly  for  a  jury. 
Paying  of  interest  on  a  debt,  with  a  knowledge,  without  objection, 
that  the  new  firm  pays  the  interest,  would  warrant  a  jury  in  find- 
ing such  an  assumption  of  the  old  debt.(c)  And  perhaps  any 
single  fact  of  like  kind  would  hav^e  the  same  effect.  All  of  these 
things  are  evidence  for  a  jury,  or  matter  foi'  a  court  to  infer  such 
adoption.  For  it  must  be  obvious  that  a  transfer  of  the  account 
from  the  old  to  the  new,  and  payments  made  on  it,  through  a  long 
course  of  time,  by  the  new  firm,  with  the  knowledge  and  without 
tlie  objection  of  the  new  partner,  would  justify  a  belief  that  he 
was  submitting  to  this  actual  assumption  of  the  old  debts  because 
it  was  for  his  interest  or  a  part  of  his  bargain.  (tZ) 

(bb)  Hoby   r.  Roebuck,   7  Taunt.    157.  itself  show  an  assumption  of  such  debt  hy 
(c)  Ex  parte  Jackson,  1   Ves.  Jr.  131.  the  incoming  partner.     Shamburg  y.  Rug- 
See  Kirwau  v.   Kirwan,  '2   Cr.  &  M.  617.  gles,   83    Pa.  1-18.      See   also  Babcock    v. 
Payment  of  interest  by  an  unincorporated  Stewart,  58  Pa.  179. 

banking  association,   on    a   debt   existing  (d)  In   Ex  parte   Jackson,  1   Yes.    Jr. 

when  a  new  member  comes  in,  will  not  of  131,  Lord  Chancellor  Thurlow  said  :     "  If 

of  the  old  firm,  on  consideration  of  the  agreement  by  the  new  firm  to  pay,  a  novation 
would  take  place,  and  the  new  firm  would  of  course  be  liable.  In  many  jurisdictions 
it  is  held  that  the  new  firm  is  not  liable  to  the  creditor  without  a  novation.  Supra, 
note  (h)  ;  In  re  Isaacs,  3   Sawy.  35  ;  Goodenow  v.  Jones,   75  111.  48  ;  Wild  v. 

Dean,  3  All.  579  ;  Ayres  v.  Gallup,  44  Mich.  13  ;  Parnialee  v.  Wiggenhom,  6  Neb. 
322  ;  Morehead  v.  Wriston,  73  N.  C.  398  ;  Kountz  v.  Holthouse,  85  Pa.  235.  So  in 
case  of  sale  to  a  third  party,  who  promised  to  pay  the  debts.  Hayes  v.  Knox,  41  Mich. 
529,  2  X.  W.  670. 

In  some  jurisdictions  a  third  party  is  alloweil  to  sue  upon  a  contract  made  for  his 
benefit,  though  a  stranger  to  it.  In  these  jurisdictions  the  creditors  are  of  course 
allowed  to  sue  the  new  firm  upon  their  agreement  with  the  members  of  the  old  firm. 
Ringo  V.  Wing,  49  Ark.  457,  5  S.  W.  787  ;  Dunlap  v.  McXeil,  35  Ind.  316  ;  Poole 
V.  Hintrager,  60  la.  180;  14  X.  W.  223;  Hannigan  v.  Allen,  127  N.  Y.  639.  27 
K.  E.  402  ;  Peyser  v.  Myers,  135  N.  Y.  599,  32  X.  E.  699  ;  Shoemaker  Piano  Mfg. 
Co.,  V.  Bernard,  2  Lea,  358.  If  a  partner  of  the  new  firm  gives  a  note  to  the  cred- 
itor, in  payment  of  the  old  debt,  the  note  is  clearly  authorized,  and  binds  the  firm. 
Silverman  v.  Chase,  90  111.  37.  Whether  the  incoming  partner  or  the  new  firm  has 
assumed  the  debts  is  a  question  which  may  be  proved  in  each  case  by  the  circumstan- 
ces. Frazer  v.  Howe,  106  111.  563;  Serviss  v.  McDonnell,  107  X.  Y.  260, 14  X.  E.  314  ; 
Peyser  v.  Myers,  135  X.  Y.  599,  32  N.  E.  699. 


430  THE   LAW   OF   PARTNERSHIP.  [CH.   XIII. 

In  one  case  where  the  new  and  old  partners  exccnted  a  deed, 
which  recited  terms  of  contract,  implying  an  assumption  of  the 
debt,  though  the  words  of  convenant  contained  no  such  agreement, 
it  was  held  that  the  new  partner  was  bound  by  the  recital. ((^)  And, 
in  general,  whatever  might  be  the  form  or  technical  effect  of  the 
contract,  if  in  substance  it  amounted  to  an  agreement  by  the  incom- 
ing partner  to  share  in  the  debts  due  from  the  firm,  he  would  be 
held  accordingly. 

§  339.  Incoming  Dormant  Partner.  —  A  difference  in  regard  to  a 
new  partner,  who  is  to  be  an  unknown  and  dormant  partner,  has 
been  pressed,  perhaps,  too  far.  There  is  indeed,  no  difference 
between  an  unknown  and  a  known  partner,  excepting  that  the 
known  partner  is  liable  on  the  credit  he  gives,  as  well  as  on  his 
interest,  and  the  unknown  partner  on  his  interest  only.  If  a  dor- 
mant partner  agrees  to  assume  the  old  debts,  he  stands  in  much 
the  same  position  as  a  known  partner  who  agrees  with  his  partners 
to  assume  them,  but  makes  no  promise  to  the  creditors,  since  they 
could  not  have  contracted  the  debts  on  his  credit  before  he  came 
in.  And,  if  this  assumption  on  the  part  of  the  latter  binds  him  to 
the  creditors,  a  similar  assumption  on  the  part  of  a  dormant  part- 
ner should  bind  him.  (/) 

§  340.  Partnership  dated  back.  —  Where  the  bargain  between 
the  partners  is,  that  the  new-comer  shall  be  a  partner  as  of  a  ])rc- 
ceding  day,  here  it  is  held,  that  he  is  not  bound  to  the  creditor, 
nor  a  party  to  the  agreement,  for  a  debt  contracted  between  that 
previous  day  and  the  actual  making  of  the  contract,  {g)  although 
he  is  bound  to  the  partners  for  his  share  of  the  debt,  if  they  pay 
it. 

§  341.  Infant  Partner  after  Coming  of  Age.  —  An  infant  partner, 
when  he  comes  of  age,  may,  as  we  have  seen,  at  once  escape  from 


one  man,  having  debts,  takes  another  into  and  sold.  And  in  Saville  v.  Robertson, 
partnership  with  him,  a  very  little  matter  4  T.  E.  720,  it  was  held  that,  if  no  part- 
respecting  those  debts  will  make  both  nership  existed  at  the  time  of  a  contract 
liable."  In  Beale  v.  Mouls,  10  A.  &  E.  made  bj' one  who  was  afterwards  a  member 
976,  members  of  a  provisional  committee  of  a  firm  formed  subsequently,  no  subse- 
of  a  company  had  entered  into  a  written  tjuent  act,  by  a  person  who  afterwards 
contract  for  certain  machinery.  M.  then  became  a  member,  —  not  even  an  acknowl- 
joined  the  committee,  and  several  pay-  edgment  of  his  liabilit}',  or  his  accepting 
ments  were  made  on  account  of  the  work,  a  bill  of  exchange  drawn  on  the  firm  as 
and  alterations  suggested  and  adopted  partners  for  the  very  goods, — would  make 
with  his  sanction  ;  and  he  also  took  an  him  liable  in  an  action  for  goods  sold  and 
active   part  in   superintending  the   work  delivered. 

and  making  experiments  with  it.      It  was  (e)  Vere  v,  Ashby,  10  B.  &  C.  288. 

held  that  he  was  not  liable  on  the  con-  (f)  Vere  v.  Ashby,  10  B.  &  C.  288. 

tract,  or  on  account  for  goods  bargained         {g)  Saltoun  v.  Houston,  1  Bing.  433- 


§  342.]        OF  A  CHANGE  IN  THE  PARTNERSHIP.  431 

all  the  obligations  of  the  firm,  under  shelter  of  his  minority.  But, 
if  he  remains  in  the  lirm  after  full  age,  he  is  in  a  position,  in  re- 
spect to  the  old  debts,  somewhat  analogous  to  that  of  an  incoming 
partner,  who  assumes  the  old  debts.  It  is  not  the  same  ;  because 
he  does  not  adopt  or  assume  the  debts  of  others,  but  only  confirms 
or  leaves  valid  those  debts  of  his  own  which  he  might  have 
avoided.  We  should  say,  that  this  continuance  in  the  firm,  and 
in  the  business,  after  full  age,  would  amount  to  such  confirmation 
by  presumption  of  law.  But  it  seems  to  be  a  presumption  which 
may  be  rebutted.  At  least,  there  is  no  very  obvious  reason  why 
the  partner  may  not,  when  he  comes  of  age,  distinctly  repiidiate  and 
annul  all  obligation  or  liability  for  any  existing  debts,  and  yet  go 
on  with  the  firm  and  its  business,  and  so  become  liable  for  its 
future  debts.  But  the  general  principles  of  the  law  of  infancy 
would  not  permit  him  to  claim  his  share  of  the  joint  funds  of  the 
old  partnership,  and  forbid  an  application  of  it  to  the  debts  of  tbe 
partnershij).  Personally,  he  may  escape  all  liability  ;  but  when 
he  comes  to  demand  his  share  of  the  funds,  and  would  apply  a 
principle  which  permits  him  to  take  his  share  before  his  majority, 
undiminished  by  payment  of  debt,  and  his  share  afterwards  on  tbe 
footing  of  another  partner,  we  are  quite  sure  that  he  can  take  no 
such  advantage  from  his  minority,  and  must  lose  his  share  of  the 
profits  if  he  repudiates  his  liability,  {h) 


SECTION  IV. 

OF   THE   DEATH    OF   A    PARTNER. 

§  342.  Dissolution  by  Death.  —  What  was  said  of  the  necessary 
dissolution  of  a  partnership,  when  any  change  is  made  in  it,  is 
true  of  the  change  caused  by  the  death  of  a  partner.  Dissolution 
follows   immediately  and    inevitably,  (j)  ^     This    rule  has   been 

{k)  See  mttc,  §  16,  note  (k).  one  copartner  could  not  appoint  a  repre- 

{j)  This  question  first  came  up  in  God-  sentative  to  carry  on  the  trade,  after  his 

frey  v.  Browning,  7  March,  1742  (cited  in  decease  ;    otherwise,  it  might  fall  to  the 

2  Ves.  Sen.  33),   where  it  was  held,  that  lot  of  an  infant  or  person  not  at  all  fit  to 

1  The  dissolution  takes  place  as  to  the  survivors  as  well  as  the  deceased.  Hoard  v. 
Clum,  31  Minn.  186,  17  N.  W.  275.  Where  it  was  agreed  that  a  partnership  should 
occupy  a  building  of  one  of  the  partners  without  rent,  this  agreement  came  to  an  end 
upon  the  death  of  one  partner,  and  the  survivors  thereafter  occupying  the  building 
must  pay  rent.     Li  re  Beck's  Estate,  19  Ore.  503,  24  Pac.  1038.     See  ante,  §  309, 


432 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XIII. 


distinctly  declared  only  of  late  years  ;  for  it  was  in  1808,  or 
about  that  time,  that  Lord  Eldon  declared,  in  several  cases,  that 
the  death  of  any  one  in  any  number  of  partners  dissolves  the 
partnership.  And  even  then  that  chancellor  put  in  the  qualifica- 
tion, as  we  mentioned  in  a  former  section,  that  the  dea  h  of  a 
partner  operates  a  dissolution  of  the  partnership,  unless  provision 
is  expressly  made  to  the  contrary.  (^) 

§  343.  Dissolution  necessarily  takes  place.  —  This  qualification 
seemg  neither  necessary,  nor  accurate.  For  no  provisions  made 
beforehand,  in  reference  to  the  death  of  a  partner,  nor  any  agree- 
ments or  arrangements  made  subsequently  to  his  death,  can 
prevent   this   dissolution. ^     We  have,  perhaps,  sufficiently  indi- 


carry  it  on.  In  Pearcc  v.  Chamberlain,  2 
Ves.  Sen.  33,  a  bill  was  brought  by  the 
widow  and  representative  of  Pearce,  against 
the  representatives  of  Plummer,  for  liberty 
to  carry  on  trade  with  the  defendants. 
Pearce,  the  plaintiff's  intestate,  who  had 
been  a  servant  and  brewer  for  Pliunmer, 
was  taken  into  partnership  by  the  latter. 
A  provision  was  made  for  the  continuance 
of  Pearce  in  the  business  in  event  of  Plura- 
mer's  death.  Plummer  and  Pearce  having 
both  died,  this  bill  was  brought.  The 
court  held,  that  articles  of  partnership  do 
not  survive  for  the  benefit  of  executors, 
&c.,  without  an  express  provision  for  such 
purpose.  See  Crawshay  v.  Maule,  1  Swanst. 
509,  1  Wils.  Ch.  181  ;  Canfield  v.  Hard,  6 
Conn.  184  ;  Kna])p  y.  McBride&  Norman, 
7  Ala.  28  ;  Williamson  v.  Wilson,  1  Bland, 
425  ;  Thornton  v.  Dixon,  3  Bro.  Ch.  200  ; 
Gillespie  v.  Hamilton,  3  Madd.  251  ; 
Crosbie  v.  Guion,  23  Beav.  518.  Lord 
Eldon,  in  VuUiamy  v.  Noble,  3  Meriv. 
614,  says  :  "  I  conceive  that  the  death  of 
a  partner,  of  itself,  works  a  dissolution  of 
the  partnership."  And  see  Dyer  v.  Clark, 
5  Met.  575  ;  Washburn  v.  Goodman,  17 
Pick.  519  ;  Griswold  v.  Waddington,  15 
Johns.  82  ;  Jones  v.  McMichael,  12  Rich. 


L.  (S.  C.)  176.  In  Jlarlett  v.  Jackman, 
3  Allen,  290,  the  general  propositions  in 
the  text  are  supported.  And  it  was  held, 
that,  in  an  action  on  a  promissory  note 
given  in  the  name  of  a  firm  by  a  surviving 
partner,  the  other  surviving  partners,  un- 
der an  answer  which  avers  that  the  firm 
had  expired  and  was  dissolved  before  the 
note  was  given,  may  prove  that  the  part- 
nership had  been  dissolved  by  the  death  of 
one  of  its  members.  See  Bank  of  N.  Y.  v. 
Vanderhorst,  32  N,  Y.  553,  for  the  effect 
of  the  death  of  one  partner  on  an  agent  of 
the  firm. 

(k)  There  are  numerous  authorities 
wdiich  Iiold  to  this  rule  ;  the  limitation  or 
proper  meaning  of  which  is  considered  in 
the  text,  and  in  the  preceding  note.  Schole- 
field  V.  Eichelberger,  7  Pet.  586  ;  Burwell 
V.  Maudeville,  2  How.  560  ;  Kershaw  v. 
Matthews,  2  Russ.  62  ;  Gratz  v.  Bayard, 
11  S.  &  R.  41  ;  Warner  v.  Cunningham, 
3  Dow,  76  ;  Balmain  v.  Shore,  9  Ves.  506. 
In  mining  copartnerships,  there  being 
usually  no  delectus  personce,  dissolution 
does  not  necessarily  supervene  either  upon 
the  death  of  a  partner,  or  upon  one  part- 
ner's selling  out  his  interest.  Taylor  v. 
Castle,  42  Cal.  367. 


1  The  tendency  of  the  modern  decisions  seems,  however,  to  be  that  if  there  is  an 
agreement  to  that  effect  in  the  articles  the  partnership  will  not  come  to  an  end  upon 
the  death  of  a  partner,  but  will  continue  in  existence.  Supra,  note  (k)  ;  Shaw,  appel- 
lant, 81  Me.  207,  16  Atl.  662  ;  Edwards  v.  Thomas,  66  Mo.  468  ;  Lewis  v.  Alexander, 
51  Tex.  578  ;  Davis  v.  Christian,  15  Gratt.  11.  Contra,  Vincent  v.  Martin,  79  Ala. 
540  {semble).  See  Exchange  Bank  v.  Tracy,  77  Mo.  594.  Such  for  instance  is  the 
case  where  a  joint-stock  company  is  formed,  with  transferable  shares,  and  it  is  provided 


§    344.]  OP   A    CHANGE    IN   THE   PARTNERSHIP.  433 

cated  our  reasons  for  this  view,  in  another  place.  Here,  we  need 
only  add,  that,  as  the  partner  who  has  died  cannot  by  possi- 
bility continue  a  member  of  the  firm,  so  any  firm  of  which  he  is 
not  a  member,  wiiethcr  it  contain  his  executors  or  his  children, 
cannot  be  the  same  firm  as  that  of  which  he  was  a  member.  (^) 
What  is  inaccurately  called  provision  against  the  dissolution  of 
the  partnership,  is  an  agreement  that,  if  eitlier  party  dies,  his 
property  shall  remain  in  the  firm  and  in  the  business,  or  that  his 
executors  shall  carry  on  the  business,  for  the  benefit  of  his  chil- 
dren ;  or  that  his  children,  or  some  one  of  them,  or  some  other 
person,  shall,  immediately  on  his  death,  take  his  place  in  the  firm, 
and  become  partner  in  his  stead.  All  these  agreements  and 
arrangements,  and  all  that  can  be  made  for  a  similar  purpose, 
are,  in  fact,  only  bargains  for  the  creation  of  a  new  partnership 
wlicn  the  old  one  ceases  to  exist.  And  so,  too,  all  arrangements 
or  contracts  which  may  be  made  between  the  surviving  partners 
and  the  representatives  or  appointee  of  the  deceased  have  for 
their  effect  only  the  formation  of  a  new  pai'tnership,  which,  upon 
some  terms  or  other,  takes  the  stock,  and  carries  on  the  business 
of  the  old  one.  And,  in  the  consideration  of  the  questions  which 
arise  under  such  provisions  and  arrangements,  we  shall  reach 
more  accurate  conclusions  if  we  keep  this  principle  in  mind. 

§  344.  Interests  of  the  Surviving  Partners.  —  There  is  not  in 
partnership  the  same  survivorship  as  in  joint  tenancy  ;  but  there 
is  a  survivorship  which  is  peculiar  to  partnership.  The  death  of 
a  partner  invests  the  surviving  partners  with  the  exclusive  right 
of  possession  and  management  of  the  whole  partnership  property 
and  business  ;  ^    but  only  for  the  purpose  of  selling  and  closing 

(/)  Marlett  v.  Jackman,  3  Allen,  290,  nership  is  ended.  The  connection  has 
cited  in  note  {j  ),  supra.  And  see  the  au-  been  dissolved,  and  the  future  relations  of 
tht)vities  cited  in  preceding  note.  And  see  the  surviving  parties  to  each  other  must 
[Vincent  v.  Martin,  79  Ala.  540;]  Hum-  be  determined  by  some  new  agreement  be- 
phries  v.  McCraw,  5  Ark.  65:  "The  tween  them,  or  by  the  results  which  the 
death  or  withdrawal  of  one  member  of  the  law  pronounces  upon  their  acts  and  pro- 
firm  is  always  a  dissolution  of  the  entire  ceedings  when  no  new  agreement  is  in  fact 
partnership,"  And  Savage  v.  Putnam,  32  made."  See  also  Bank  of  Mobile  *'.  An- 
Barb.  425  :  "  The  ordinary  effect  of  the  drews,  2  Sneed,  535  ;  Knowlton  v.  Reed, 
death  of  one  of  the  members  of  a  partner-  38  Me.  246;  Laughlin  v.  Loreng,  48  Pa. 
ship  is  to  work  its  dissolution.     The  part-  275. 

that  the  decease  of  a  member  shall  not  work  a  dissolution.  Post,  ch.  xviii ;  Phillips 
V.  Blatchford,  137  Mass.  510  ;  Troy  I.  &  N.  Factory  v.  Corning,  45  Barli.  231  ; 
Walker  v.  Wait,  50  Vt.  668  ;  McNeish  v.  Hulless  Oat  Co.,  57  Vt.  316. 

1  Clay  y.  Freeman,  118  U.  S.  97  ;  Sellers  v.  Shore,  89  Ga.  416,  15  S.  E.  494  ;  W^ill- 
son  V.  Nicholson,  61  Ind.  241  ;  Anderson  v.  Ackerman,  88  Ind.  481  ;  Grim's  Appeal, 

28 


434 


THE   LAW   OF   PARTNERSHIP. 


[CH.    XIII. 


the  same,  (w)     It  is  not  uncommon  for  articles  of  copartnership 
to  provide  how  the  surviving  partner  or  partners  shall  conduct 


{m)  Loeschigk  v.  Addison,  19  Abl).  Pr. 
169  ;  Ciawshay  v.  Maule,  1  Swanst.  495  ; 
Ex  parte  Williams,  11  Ves.  5;  Peters  v. 
Davis,  7  Jlass.  256  ;  Evans  v.  Evans,  9 
Paige,  178  ;  Dyer  v.  Clark,  5  Met.  56-2  ; 
Gleason  v.  White,  34  Cal.  258  ;  Miller  v. 
Jones,  39  111.  54  ;  Reniick  v.  Eniiz,  41  111. 
343  ;  in  tliis  case,  rules  for  the  settlement 
of  the  partnership  funds  and  accounts  aie 
given  ;  Loeschigk  i'.  Hatfield,  5  Robt.  26  ; 
Crawshay  v.  Collins,  15  Ves.  226.  In  this 
last  case,  Lord  Eldon  says  :  "  There  may 
be  a  partnership  where,  whether  the  parties 
have  agreed  for  the  determination  of  it  at 
a  particular  period  or  not,  engagements 
must,  from  the  nature  of  it,  be  contracted, 
which  cannot  be  fulfilled  during  the  exist- 
ence of  the  partnership  ;  and  the  conse- 
quence is,  that,  for  the  purpose  of  making 
good  those  engagements  with  third  per- 
sons, it  must  continue  ;  and  then,  instead 
of  being,  as  it  was,  a  general  partnership, 
it  is  a  general  partnership  determined  ex- 
cept as  it  subsists  for  the  purpose  only  of 
winding  up  the  concerns.  Another  mode 
of  determination  is,  not  by  effluxion  of 
time,  but  by  the  death  of  one  partner  ;  in 
which  case,  the  law  says  that  the  property 
survives  to  the  others.     It  survives,  as  to 


the  legal  title,  in  many  cases  ;  but  not  as 
to  the  beneficial  interest.  The  question 
then  is,  whether  the  surviving  partneis, 
instead  of  settling  the  account,  and  agree- 
ing wit!)  the  executor  as  to  the  terms  upon 
wliich  his  beneficial  interest  in  the  stock 
is  still  to  be  continued,  subject  still  to  the 
possible  loss,  can  take  the  whole  property, 
do  what  they  please,  and  compel  the  ex- 
ecutor to  take  the  calculated  value.  That 
cannot  be  without  a  contract  for  it  with 
the  testator.  The  executor  has  a  right  to 
have  the  value  ascertained,  in  the  way  in 
which  it  is  best  ascertained,  by  sale."  If 
this  authority  of  a  partner,  which  con- 
tinues after  a  dissolution,  for  all  ]nirposes 
of  winding  up,  be  unduly  exercised,  the 
remedy  is  by  applying  to  the  court  foi'  the 
appointment  of  a  receiver.  Butchait  v. 
Dresser,  4  De  G.  M.  &  G.  542.  See  Allen 
V.  Hill,  16  Cal.  113;  McKowen  i;.  McGuire, 
15  La.  Ann.  637  ;  Roys  v.  Vilas,  18  Wis. 
169.  But  see  Skipvvorth  v.  Lea,  16  La. 
Ann.  247.  The  personal  note  of  the  sur- 
vivor, for  the  fii'm's  debt,  is  not  a  satisfac- 
tion of  the  debt,  except  by  special  agree- 
ment of  the  parties.  Leach  v.  Church,  15 
Ohio,  169. 


105  Pa.  375  ;  Kutz  v.  Dreibelbis,  126  Pa.  335,  17  Atl.  609  ;  Hawkins  v.  Capron,  (R.  I.) 
24  Atl.  466. 

If  the  deceased  had  possession  of  partnership  property  at  the  time  of  his  death,  the 
survivor  is  entitled  to  possession  at  once,  and  may  maintain  trover  against  the  executor 
of  the  deceased  if  possession  is  refused.  Hawkins  v.  Capron,  (K.  I.)  24  Atl.  466.  If 
the  property  was  money,  the  surviving  partner  may  bring  an  action  against  the  execu- 
tor to  recover  it.  Kutz  v.  Dreibelbi.s,  126  Pa.  335, 17  Atl.  609.  In  the  last  case  plain- 
tiff and  deceased  were  pmrtners  in  building  a  bridge,  and  payment  was  to  be  made, 
according  to  the  contract,  to  the  deceased  or  his  executor.  Payment  having  been  made 
to  the  executor,  the  survivor  was  allowed  an  action  ;  but  since  there  were  no  debts, 
and  the  whole  business  could  be  settled  in  a  single  action,  he  was  allowed  to  recover 
only  half  the  payment. 

Choses  in  action  as  well  as  choses  in  possession  pass  to  the  surviving  partner  ;  he 
has  the  sole  ownership  of  partnership  contracts.  Bassett  v.  Miller,  39  Mich.  133  ; 
Nehrboss  v.  Bliss,  88  N.  Y.  600.     He  alone  therefore  can  sue  ;  ante,  §  249. 

Since  the  surviving  partner  has  the  comidete  legal  title,  he  has  no  right  to  file  a  bill 
in  equity  to  wind  up  the  affairs.     McKay  v.  Joy,  70  Cal.  581,  11  Pae.  832. 

The  representative  of  the  deceased  partner  has  no  right  to  interfere  in  the  business, 
as  by  insisting  iii)on  a  continuance  or  a  sale  of  it.  His  only  right  is  a  right  in  pa-.ionam 
against  the  survivors  to  call  for  an  account.  Grim's  Appeal,  105  Pa.  375.  See  Haynes 
V.  Short,  88  Ala.  562,  7  So.  157.    This  it  is  his  duty  to  do  as  soon  as  may  be.    Gwynue 


§  345.]  OP    A    CHANGE    IN    THE    PARTNERSHIP.  435 

or  close  up  the  business ;  and  these  provisions  must  be  re- 
garded, {mvi) 

§  345.  Fiduciary  Position  of  Surviving  Partner.  —  Until  a  set- 
tlement, the  representatives  of  the  deceased  cannot  claim  or  take 
any  one  chattel,  or  any  portion  of    the  merchandise,  (p)     The 

(mm)  Suydain  v.  Owcii,  14  Gray,  195.  for  tliat  purpose,  of  assigning  any  chose  in. 

(■p)  A  s\u-viving  partner  has  a  right  to  action  belonging  to  the  estate.     Pinckney 

collect  all  debts  due   to  the  Hriu,  and  to  v.  Wallace,  1  Abb.  Pr.  82.     And  see  Koys 

sell  the  i)ro{>erty.     His   responsiliility  to  v.  Vilas,  18  Wis.  169. 
the  reprcjsentatives  of  the  deceased  partner  Real  estate,  purchased  by  i)artner.s,  for 

exists  only  after  the  partnership  affairs  are  the    partnership   business  and    with   the 

setthid.     Having  the  right  to  collect  and  iiartnershii)   funds,    though   conveyed  •  to 

dispose  of  the  property,  he  has  the  power,  theiu  by  sucli  a  deed  as,  in  case  of  other 

V.  Estes,  14  Lea,  662.  This  riglit  to  call  for  an  account  goes  of  course  to  the  executor 
or  administrator  ;  the  heir  or  next  of  kin  cannot  exercise  it.  In  case,  however,  of 
refusal  of  the  personal  rejiresentative  to  exercise  the  right,  by  collusion  or  otherwise, 
the  next  of  kin  may  hie  a  bill,  making  the  personal  representative  a  party.  Valentine 
V.  Wysor,  123  Ind.  47,  23  N.  E.  1076. 

Tlie  representative  of  the  deceased  partner  cannot  sue  on  a  partnership  claim,  even 
iu  e([uity,  without  alleging  a  wrongful  refusal  to  sue  on  the  part  of  the  survivor.  Kirby 
V.  L.  S.  &  M.  S.  R.  R.,  8  F.  R.  462.  But  he  may  maintain  a  bill,  alleging  such 
wrongful  refusal,  and  nmking  the  survivor  a  party.  Kirby  v.  L.  S.  &  M.  S.  R.  1!.,  14 
F.  R.  261. 

The  duty  of  the  surviving  partner  or  partners  to  the  estate  of  the  deceased  is  to  close 
up  the  business  by  paying  the  debts,  and  to  render  an  account  and  pay  over  the  share 
of  the  deceased  as  soon  as  may  be.  Clay  v.  Freeman,  118  TJ.  S.  97  ;  Sellers  v.  Shore, 
89  Ga.  416,  15  S.  E.  494  ;  Oliver  v.  Forrester,  96  111.  315  ;  Gable  v.  Williams,  59  Md. 
46  ;  Heath  v.  Waters,  40  Mich.  457.  Since  the  duty  of  settling  the  business  is  upon 
the  surviving  partner,  he  cannot  shift  it  to  the  estate.  Thus  where  the  surviving  ])art- 
ner  was  ill,  and  the  executors  of  tlie  deceased  settled  up  the  business,  they  could  get  no 
compensation  from  the  estate  of  the  deceased  ;  they  must  be  paid  out  of  the  assets  of 
the  business,  or  by  the  survivor.  Miller's  Appeal,  (Pa.)  7  Atl.  190.  Where  the  sur- 
vivor dies  before  the  business  is  settled,  the  duty  of  closing  it  up  passes  to  his  personal 
representative.     Dayton  v.  Bartlett,  38  Oh.  St.  357. 

We  have  already  seen  (ante,  §  155)  that  a  surviving  partner  has  no  right  to  compen- 
sation for  his  services  in  closing  up  the  business.  If,  however,  it  is  necessary  for 
another  to  do  the  work,  as  in  the  two  cases  just  cited,  the  stranger  is  of  course  entitled 
to  compensar.ion.  We  shall  see  later  (post,  §  415)  that  all  the  reasonable  expenses  of 
settling  tlie  business  may  be  defrayed  out  of  the  assets. 

All  executory  contracts  of  the  firm  which  do  not  call  for  the  personal  service  of  the 
decensed  continue  in  effect  and  bind  the  firm  ;  the  survivors  must  therefore  fulfil  such 
contracts,  at  the  expense  of  the  partnership  and  for  its  benefit.  Davis  v.  Sowell,  77 
Ala.  262  ;  Ayres  v.  C.  R.  I.  &  P.  R.  R.,  52  la.  478,  3  N.  W.  522  ;  Rust  v.  Chisolm, 
57  Md.  376  ;  Dowd  v.  Troup,  57  Miss.  204  ;  King  v.  Leighton,  100  N.  Y.386,  3  N.  E. 
594  ;  Tompkins  v.  Tompkins,  18  S.  C.  1.  If  the  contract  called  for  personal  service 
on  the  part  of  the  ileceased  jiartner,  the  survivor  of  course  cannot  complete  it.  Oliver 
V.  Forrester,  96  111.  315.  The  surviving  partner,  though  he  cannot  continue  in  busi- 
ness on  behalf  of  the  old  firm,  may  find  it  advisable  not  to  stop  business  at  once.  If 
necessary  for  the  proper  closing  up  of  the  business  the  survivor  may  make  purchases  or 
even  enter  into  contracts  at  the  expense  of  the  firtn.  Thus,  he  may  in  a  proper  case 
finish  up  unfinished  work.  Calvert  v.  Miller,  94  N.  C.  600.  Or  he  may  buy  merchan- 
dise if  necessary  for  closing  up  the  business.     Oliver  v.  Forrester,  96  111.  315. 


436 


THE    LAW    OF    PARTNERSHIP. 


[CH 


XII  r. 


survivors  arc,  from  the  death,  trustees  for  all  concerned  in  the 
partnershii)  ;  for  the  rei)rosont;itiv(^s  of  the  deceased,  for  the  cred- 
itors of  tlie  firm,  and  for  themselves,  (^)  ^  'J'heir  trust  is  to 
Avind  up  the  concern  in  the  best  numner  for  all  interested,  and, 
therefore,  without  unnecessary  delay  ;  and  their  powers  are  such 
as  enable  them  most  effectually  to  execute  that  trust.  Nor  do  we 
know  any  difference,  in  this  respect,  as  to  the  choses  m  possession 
and  those  in  action.^ 

The  surviving-  partners  are  held  strictly  as  trustees  ;  and  their 
conduct,  in  discharging  their  trust,  is  carefully  looked  after  by 
courts  of  equity,  (r)  Thus,  like  other  trustees,  they  cannot  sell 
the  property  of  the  firm  and  buy  it  themselves  ;  nor,  as  the  con- 
verse of    this,  can   they  buy  from  themselves  property   for  the 


parties,  would  make  them  tenants  in  com- 
mon, is  considered,  in  equity,  as  part  of 
the  partnership  stock  ;  and  is  to  be  applied, 
it'  necessary,  towards  i)aytneut  of  the  part- 
nership debts.  Though  such  estate  is  con- 
sidered at  law  as  the  several  property  of 
the  partners,  yet  it  is  held  subject  to  a 
trust  arising  by  implication  of  law,  by 
wliich  it  is  liable  to  be  sold,  and  the  pro- 
ceeds brought  into  the  partnership  fund, 
so  far  as  is  necessary  to  pay  the  debts  of 
the  hrm  ;  and  neither  the  widow  nor  the 
'  heirs  of  a  deceased  partner  can  claim  any 
beneficial  interest  in  such  estate,  until  the 
claims  of  the  creditors  of  the  iirm  are  first 
satisfied.  Burnside  v.  Merrick,  4  Met. 
537.  And  upon  the  dissolution  of  the 
partnership,  by  the  death  of  one  of  the 
partners,  the  survivor  has  an  equitable 
lien  on  such  real  estate  for  his  indemnity 
against  the  delits  of  the  firm,  and  for  secur- 
ing the  balance  that  may  be  due  to  him 
from  the  deceased  partner  on  settlement  of 
the  partnership  accounts  between  them  ; 
and  the  widow  and  heirs  of  such  deceased 
partner  have  no  beneficial  interest  in  such 
real  estate,  nor  in  the  rent  received  there- 
from after  his  death,  until  the  surviving 
partner  is  so  indemnified.  Dyer  v.  Clark, 
5  Met.  562.     See  ante,  §  272,  note. 

(q)  Case  v.  Abeel,  1  Paige,  393  ;  Lake 
V.  Gib.son,  1  Eq.  Ca.  Ab.  290,  affirmed  in 
3  P.  Wms.  158  ;  Jefferys  v.  Small,  1  Vern. 
217  ;  Elliot  v.  Brown,  cited  in  Jackson  v. 


Jackson,  9  Ves.  597  ;  Lyster  v.  Dolland,  1 
Ves.  Jr.  434,  435,  per  Lord  Thurlow  ; 
York  V.  Eaton,  2  Freem.  23  ;  Booth  v. 
Parks,  1  Molloy,  465  ;  Sigourney  v.  Munn, 
7  Conn.  11  ;  [Farley  v.  Moog,  79  Ala. 
148].  And  see  Egberts  v.  Wood,  3  Paige, 
517  ;  Ketchum  v.  Durkee,  1  Barb.  Cli. 
480  ;  Whiteright  v.  Siimpson,  2  Barb. 
379 ;  Innes  v.  Lansing,  1  Paige,  583  ; 
Campbell  v.  Mullet,  2  Swanst.  574  ;  West 
r.  Skip,  1  Ves.  237,  445  ;  Ex  parte  Ruffin, 
6  Ves.  126,  128  ;  Wood  v.  Dummer,  3 
Mason,  312;  Murry  v.  Murry,  5  Johns. 
Ch.  60  ;  Tajdor  v.  Fields,  4  Ves.  396  ; 
Young  V.  Keighle}%  15  Ves.  557.  And  see 
Marlett  v.  Jackman,  3  Allen,  287. 

(r)  Phillips  i;.  Ackerson,  2  Bio.  Ch. 
272  ;  Hartz  v.  Schrader,  8  Ves.  317  ;  Est- 
wick  V.  Conningsby,  1  Vem.  118  ;  Burden 
V.  Burden,  1  Ves.  &  B.  170 ;  Ames  v. 
Downing,  1  Bradf.  321  ;  Washburn  v. 
Goodman,  17  Pick.  519  ;  Case  v.  Abeel,  1 
Paige,  398,  per  Walworth,  Chancellor  : 
"The  surviving  partner  has  the  legal  right 
to  the  partnership  effects  ;  but  in  equity 
he  is  considered  merely  as  a  trustee  to  pay 
the  partnership  debts  and  dispose  of  the 
effects  of  the  concern  for  the  benefit  of 
himself  and  the  estate  of  his  deceased  part- 
ner. He  cannot,  therefore,  be  permitted 
to  make  anj-  gain  or  profit  by  the  use  of 
the  partnership  funds  and  effects  for  his 
own  exclusive  benefit."  And  see  Ogden 
V.   Astor,    4  Sandf.   311. 


1  Grim's  Appeal,  105  Pa.  375. 

3  This  language  was  approved  in  Davis  v.  Sovvell,  77  Ala.  262. 


§   345.]  OF    A    CHANGE    IN    THE    PARTNERSHIP.  437 

firm,  (s)  Their  trust  being  to  wind  up  the  concern,  their  powers 
are  commensurate  with  the  trust.  Hence,  they  may  collect,  com- 
promise, or  otherwise  arrange  all  the  debts  of  the  firm  ;  and 
their  receipts,  payments,  and  doings  generally,  in  this  behalf,  are 
valid,  if  honest,  and  within  the  fair  scope  and  purpose  of  the 
trust.  And  if  there  be  negligence,  delay,  misconduct,  or  gross 
mistake,  equity  will  interfere,  and  give  the  proper  relief.^ 

(.«)  But  equity  will  not  interfere  and  gence.  Evans  v.  Evans,  9  Paige,  178; 
deprive  the  surviving  partner  of  the  right  Jacquin  v.  Buisson,  11  How.  Pr.  385. 
of  closing  up  the  concern,  by  appointing  a  Nor,  in  closing  up  the  affairs  of  the  firm,  is 
receiver,  if  he  is  responsil)le  and  acts  in  there  any  such  principle  in  equity,  that 
good  faith.  So  held  where  the  survivor  surviving  partners  cannot  become  pur- 
resided  in  England,  but  was  engaged  in  chasers,  from  the  representatives,  of  the 
closing  up  the  affairs  of  the  firm,  by  a  share  of  deceased  partner.  Chambers  v. 
competent  agent,  with  all  reasonable  dili-  Howell,  11  Beav.  6,   12  Jur.  905. 

1  The  anomalous  position  of  the  surviving  partner,  who  is  in  a  fiduciary  position, 
yet  acts  in  his  own  right,  has  given  rise  to  nmch  conflict  in  the  cases.  A  consideration 
of  his  precise  position  may  perhaps  be  useful.  The  partnership  no  doubt  comes  to  au 
end  as  a  going  concern  upon  the  death  of  one  partner  ;  in  the  common  phrase,  it  is  dis- 
solved. Yet  it  still  remains  as  a  body  which  owns  property  and  owes  debts.  Its 
existence  is  not  terminated  until  the  business  is  wound  up  and  final  distribution  made. 
This  is  perfectly  well  recognized  in  the  business  world,  where  the  firm  name  is  still 
used  in  liquidation,  and  the  accounts  are  continued.  By  the  death  of  a  partner,  how- 
ever, the  partnership  can  act  only  through  the  survivors  ;  not  througli  the  representa- 
tive of  the  deceased,  since  he  was  not  a  partner.  The  position  of  a  survivor  toward 
the  assets  and  liabilities  of  the  partnership  is  unchanged  by  his  copartner's  death.  He 
continues  to  own  the  assets  in  trust  for  the  firm  ;  and  the  firm  continues  to  be  indebted 
to  its  creditors.  The  rights  of  the  creditors  in  the  partnership  property  are  therefore 
unchanged.  The  surviving  partners  hold  in  trust,  not  for  the  creditors  or  the  estate  of 
the  deceased,  but  for  the  firm.  But  as  in  the  case  of  an  active  partnership,  either  the 
representative  of  the  deceased  partner  or  the  firm  creditors  may  enforce  the  obligation. 
It  has  been  urged  that  the  survivor  takes  the  property  in  trust  for  the  creditois,  and 
that  it  must  therefore  be  distributed  on  equitable  principles  ;  but  that  is  evidently 
inexact.  The  property  continues  to  belong  to  the  firm,  and  firm  creditors  may  sue  the 
survivor  and  attach  the  firm  property.  Roach  v.  Brannon,  57  Miss.  490  ;  Krueger  v, 
Speith,  8  Mont.  482,  20  Pae.  664.  The  survivor  has  no  more  right  after  dissolution 
than  before  to  transfer  the  property  in  payment  of  his  individual  debts  ;  and  the  indi- 
vidual creditor  who  takes  it  with  notice  cannot  hold  it.  Hill  v.  Draper,  54  Ark.  395, 
15  S.  W.  1025  ;  Strauss  v.  Frederick,  91  N.  C.  121.  Since,  however,  he  has  the  entire 
legal  title,  it  might  be  held  that  a  transferee  without  notice  that  it  was  partnership 
property  would  hold  it  ;  sed  query.  We  have  seen  that  an  individual  creditor  of  one 
partner  could  not  hold  partnership  property  given  during  the  continuance  of  the  part- 
nership, though  he  had  no  notice  that  it  was  firm  property.     Anfe,  §  90, 

This  seems,  however,  to  be  opposed  to  the  rule  in  cases  of  set-off.  If  the  surviving 
partner  is  sued  on  a  separate  del)t  after  the  death  of  a  copartner  he  may  set  off  a  firm 
credit.  Slipper  v.  Stidstone,  1  Esp.  47,  5  T.  R.  493  ;  Johnson  v.  Kaiser,  40  N.  J.  L. 
286  ;  Nehrboss  v.  Bliss,  88  N.  Y.  600  {scmhle).  Contra,  Weil  v.  Jones,  70  Mo.  560. 
If  he  is  sued  as  surviving  partner,  he  may  set  off  an  individual  debt.  Lewis  v.  Culbert- 
son,  11  S.  &  R.  48.  On  the  other  hand,  if  he  sues  as  surviving  partner,  the  defendant 
may  set  off  a  debt  due  to  him  individuallj',  Holhrook  v.  Lackey,  13  Met.  132  (but 
see  Ross  v.  Pearson,  21  Ala.  473  ;   Wain  v.  Hewes,  5  S.  &  R.  468)  ;  and  if  he  sues  on 


438  THE    LAW    OF    PARTNERSHIP.  [CH,    XIII, 

It  is  said  that  the  surviving  partners  are  trustees,  in  part,  for 
themselves.  But  while,  as  trustees  they  have  all  power  and 
possession,  they  stand  as  cestuis  que  trustent  on  the  same  footing  as 
the  others  ;  or,  rather,  must  postpone  themselves  to  the  creditors 
of  the  firm ;  and  only  as  to  what  is  left  after  the  creditors  are 
paid  do  they  come  in  on  equal  terms  with  the  representatives  of 
the  deceased,  and  with  each  other.  And,  if  there  is  not  enough  to 
pay  the  debts  in  full,  then,  all  being  equally  liable,  they  must  do 
nothing  to  disturb  or  prevent  this  equality.  (^) 

§  346.  Survivors  continuing  Business.  —  The  SUrvivors  are  not 
bound  to  continue  the  business  at  all ;  and  would  probably  be 
permitted  to  wind  it  up  quite  abruptly,  if  they  chose  not  to  en- 
gage in  new  transactions  for  the  firm,  or  even  continue  old  ones, 
although  the  new  or  the  old  seemed  to  promise  a  much  better 
winding  up  at  the  close.  And,  moreover,  if  the  trustees  choose 
to  continue  the  property  in  trade,  or  to  go  on  in  business  under 
the  credit  and  risking  the  effects  of  the  firm,  not  only  will  equity 
restrain  them  doing  so,  if  injunction  be  desired  by  the  represent- 
atives of  the  deceased,  but  if,  by  such  new  business,  profit  is 
made,  the  survivors  will  be  bound  to  account  for  this  profit  as 
belonging  to  the  firm  (m)  ^     And  if  no  profit,  or  even  a  loss,  is 

(t)  See  cases  cited  in  previous  notes  to  Booth  v.  Parks,  1  Jlolloy,  465 ;  Crawshay 

this  section.    See  Saving  and  Loan  Society  c.   Collins,   15  Ves.    218,    2   Huss.    325  ; 

V.  Gibb,  21  CaL  595,  limiting  the  liability  Brown  v.  Litton,  1  P.  Wni.s.  224  ;  Ilam- 

of  the  surviving  partner,  21  Cal.  496.  mond  u.  Douglas,   5   Yes.  539;  Brown  v. 

(u)  Waring  v.  Cram,  1  Pars.  Sel.  Cas.  Dc  Tastet,  Jacob,  284,  292;  Heathcote  v. 

522  ;    Washburn    v.    Goodman,    17    Pick.  Hulme,  1  Jac.  &  W.  122. 
519 ;    Ogden    v.    Astor,    4    Sandf.    311  ; 

an  individual  claim,  the  defendant  may  set  off  a  debt  due  from  him  as  surviving  part- 
ner.    French  v.  Andrade,  6  T.  R.  582  ;  Ferris  v.  Burrows,  34  Hun,   104. 

Since  the  survivor  is  a  trustee,  not  for  the  estate  of  the  deceased  but  for  the  firm,  he 
may  buy  the  interest  of  the  deceased  from  his  representative.  Valentine  v.  Wysor, 
123  Ind.  47,  23  X.  E.  1076 ;  supra,  note  (s). 

In  Bush?;.  Clark,  127  Mass.  Ill,  it  was  held  that  the  interest  of  the  survivor  in 
the  assets  w^as  such  that  his  widow  might  have  an  allowance  from  them,  though  the 
partnership  was  insolvent.  Query.  The  widow  of  the  partner  first  deceased  can  cer- 
tainly have  no  allowance  ;  ante,  §  252. 

In  disposing  of  the  assets  the  survivor  must  be  faithful  to  the  interests  of  the  firm. 
If  he  disposes  of  them  fraudulently  at  too  low  a  price,  he  is  accountable  to  the  repre- 
sentative of  the  deceased  for  the  real  value.  Dewey  v.  Chapin,  156  Mass.  35,  30  N.  E. 
223.  If  there  are  two  survivors  who  act  fraudulently,  as  by  dividing  the  assets  among 
themselves,  they  are  liable  jointly.     Bundy  v.  Youmans,  44  Mich.  376,  6  N.  W.  851. 

1  Where  the  surviving  partner  makes  use  of  firm  assets  in  order  to  continue  the 
business,  whether  with  or  without  the  consent  of  the  representative  of  the  deceased,  he 
is  of  course  accountable.  If  he  converts  the  assets  to  his  own  use  he  is  liable  for  their 
value  at  the  time  of  the  death  of  his  copartner.  Theller  v.  Such,  57  Cal.  447  ; 
Brown's  Appeal,  89  Pa.  139.     If  the  taking  was  at  a  subsequent  time,  the  value  of  the 


§  346.]         OF  A  CHANGE  IN  THE  PARTNERSHIP  439 

made,  they  must  be  cliarged  with  interest  on  the  funds  they  use, 
and  the  whulc  loss  will  be  theirs,  (y)  It  seems,  however,  that,  if 
the  survivors  carry  the  business  on,  and  make  a  profit  which  is 
credited  to  the  firm,  they  may  be  allowed  some  compensation  for 
their  services,  unless  the  articles  of  agreement  provide  other- 
wise, (w)  And  a  surviving  partner  may  be  allowed  for  liis  time 
and  expenses,  under  especial  circumstances  justifying  such  a 
claim,  (ww^     The    survivors   do    not,  however,  bear  more    than 

(?')   Simpson    v.    Fcltz,   1   McCord  Ch.  the  debts.     His  legal  duty  was  to  collect 

213  ;  Goddard  v.   Hulow,   1  Nott  &  McC.  tiie  assets  and  wind  up  the  business  of  the 

45 ;  Honore  v.  Colmesnil,   7   Dana,  201  ;  firm  ;  a  duty  the  law  imposes  on  him  as 

Moon  V.  Story,   8  Dana,  233  ;  and  cases  an  incident  to  the  contract  of  partnership, 

in  previous  note.  and  for  the  performance  of  which  no  re- 

{w)  See  Collyer  on  Part.  §  328;  and  muneration  is  promised  or  implied.     Such 

see    Cook     v.     (Jollingridge,     Jac.     607  ;  a  claim  is  new  to  me,  and  I  am  not  aware 

Burden    v.    Burden,    1    Ves.    &   B.    170  ;  that  it  is  supported  by  precedent  or  au- 

Stocken    1-.  Da\v.son,   6  Beav.    371.     l>ut  thoiity."     i'.catty  v.   Wray,  19   Pa.   51*5; 

see    also,    contra,    Ames    v.    Downing,    1  Brown  v.  McFarlaiul's  Ex.  41  Pa.  129. 
Bradt'.  321,  in  which  tlie  Suriogate  says  :  (ww)  Newell    v,    Humphrey,     37     Vt. 

"  Nor  can  Mr.  Hicks  charge  conmiissifins,  265. 
as  surviving  partner,  for  the  collection  of 

assets  is  then  to  be  taken.  KJotz  v.  Macready,  39  La.  Ann.  638,  2  So.  203  ;  Parker  v. 
Broadbent,  134  Pa.  322,  19  Atl.  631.  He  is  therefore  responsilile  for  all  losses.  In 
Clay  V.  Field,  138  U.  S.  464,  however,  it  was  held  that  under  the  exceptional  cir- 
cumstances this  general  rule  wouhl  not  aj)ply.  In  that  case  the  surviving  partner  of 
a  southern  plantation,  before  the  war,  continued  to  operate  it  as  he  thougnt  best  for 
the  interests  of  all  concerned.  The  slaves  belonging  to  the  plantation  were  freed  by 
the  war.  It  was  held  that  the  surviving  partner  was  not  responsible  for  their  value. 
In  accordance  with  the  general  rule,  if  a  surviving  partner  occupies  real  estate  belong- 
ing to  the  firm  he  must  charge  himself  with  the  rent.  Beale  v.  Beale,  (111.)  2 
N.  E.  65. 

For  the  corresponding  rule  in  case  of  dissolutiou  inter  vivos  see  ante,  §  236. 

If  the  act  of  the  partner  in  continuing  the  busine.ss  was  wrongful,  the  represen- 
tative of  the  deceased  would  have  the  option  of  taking  advantage  of  the  dealings  or 
repudiating  them  ;  that  is,  he  might  demand  interest  on  the  sum  due,  or  a  share  of 
the  profits.     Theller  v.  Such,  57  Cal.  447  ;  Biown's  Appeal,  89  Pa.  139. 

In  arriving  at  a  proper  division  of  the  profits,  each  case  would  seem  to  depend  upon 
its  own  circumstances.  "There  is  no  inflexible  rule  governing  all  cases."  Robinson 
V.  Simmons,  146  Mass.  167,  15  X.  E.  558.  The  true  rule,  in  the  ab.sence  of  excep- 
tional circumstances,  is  to  deduct  from  the  net  profits  such  an  amount  as  is  attribut- 
able to  the  skill  and  services  of  the  survivors  in  managing  the  business,  and  to  divide 
the  balance  according  to  the  actual  shares  of  capital  of  the  various  partners  at  the 
time  of  the  dissolution.  Yates  v.  Finn,  13  Ch.  D.  839  ;  Robinson  v.  Simmons,  146 
Mass.  167,  15  N.  E.  558. 

One  surviving  partner  is  not  liable  to  the  representative  of  the  deceased  because 
his  surviving  copartner  continued  the  business,  if  he  himself  took  no  part  in  it. 
Matteson  v.  Xathanson,  38  Mich.  377. 

Where  the  articles  give  a  surviving  partner  the  option  of  taking  the  whole  business 
at  a  valuation,  the  profits  belong  to  him  exclusively  and  no  interest  in  them  to  the 
estate  from  the  time  the  option  is  exercised.  Harbster's  Appeal,  125  Pa.  1,  17  Atl. 
204. 


440  THE   LAW   OF    PARTNERSHIP.  [CH.    XIII. 

their  share  of  losses  resulting  after  the  death  of  the  deceased, 
from  t  ransactions  entered  upon  before,  and  only  carried  to  com- 
pletion by  the  survivors. 

S  347.  Survivor  vyhether  Responsible  for  Value  of  Good-will.  — 
If  the  survivor  or  survivors  carry  on  the  business,  they  may 
sometimes  realize  great  advantages  and  large  profits  from  the 
fact  that  the  business  was  so  well  established  during  the  lifetime 
of  the  deceased.  And  then  the  question  may  come,  whether  the 
court  will  require  them  to  make  an  allowance  to  the  represent- 
atives of  the  deceased,  for  their  profit.  The  question,  in  fact, 
amounts  to  this :  Is  the  good-will  of  the  concern  so  far  partner- 
ship property  that,  if  the  survivors  retain  it,  they  must  allow  for 
it  ?  There  is  but  little  adjudication  on  this  subject ;  but  that 
little  leads  to  the  conclusion,  that  the  good-will  goes  to  the  sur- 
vivors, without  payment  or  allowance  on  their  part.  There  are 
some  difficulties,  however,  attending  this  view.  The  stock  of 
goods,  the  lease,  or  the  right  or  expectancy  of  remaining  on  the 
premises,  all  belong  to  the  firm.  If  the  merchandise,  if  sold  in 
connection  with  the  lease  and  right,  will  bring  much  more  money 
than  if  sold  otherwise,  should  it  not  be  sold  in  this  way  ;  and  if 
the  survivors  buy  it,  or  take  it,  or  keep  it,  should  they  not,  in 
some  form,  allow  for  it  the  price  it  would  bring  if  others  bought 
it  as  they  buy  it?  So  mucli  of  the  good-will  —  the  meaning  of 
which  word  is  not  very  exactly  defined  —  as  attaches  merely 
to  the  goods  and  the  place,  and  the  existing  contracts,  belongs, 
we  should  say,  to  all  alike ;  but  so  much  of  it  as  is  personal,  and 
originates  in  the  way  of  carrying  on  the  business,  and  might  go 
with  the  survivors  wherever  they  engage  in  the  same  business, 
this  belongs  to  them  exclusively,  (z) 

(x)  An  examination  of  the  authorities  sisting  of  the  subscription  list,  &c. )  of  a 

will  show  considerable   conflict  on   these  newspaper   is  partuership  property  ;   and 

questions.     Crawshay  i>.  Collins,  15  Ves.  when  One  of  the  partners  dies,  it  does  not 

218,  227  ;  Crutwell  v.  Lye,  17  Ves.  336  ;  survive  to  the  surviving  partner,  but  is  to 

Farr    v.    Pearce,  3  Madd.    74  ;    Lewis    v.  be  sold,  with  the  presses,  types,  and  me- 

Langdon,  7  Sim.   421  ;    Willett  v.   Blan-  chanical  appliances  of  the  establishment, 

ford,  1  Hare,  253,  271.     It  was  held  in  In  tlie    case  of   Wedderburn   v.   Wedder- 

Williams   v.  Wilson,    4  Sandf.    Ch.  379,  burn,   22    Beav.    104,  the  Jklaster   of  the 

that  the  good-will  of  a  business,  built  up  Rolls,  in  delivering  judgment,  says:  "The 

by  a  copartnership,  is  an  important  and  good-ivill  of  a  trade,  although  inseparable 

valuable   interest,   which   the   law  recog-  from  the  business,  is  an  appreciable  part 

nizes  and  will  protect  ;  and  in  Dougherty  of  the  assets  of  a  concern,  both  in   fact 

r.  Van  Nostrand,    1    HofE.   Ch.   68,  that,  and  in  the  estimation  of  a  court  of  equity, 

upon  a  dissolution,  it  must  be  sold,  and  Accordingly,  in  reported  cases.  Lord  Eldon 

that   it   does   not   survive.     In    Holden's  held,  that  a  share  of  it  properly  and  as 

Admr.    v.    McMakin,    1    Pars.     Sel.    Cas.  of   right    belonged   to   the   estate   of  the 

270,  it  was  held,  that  the  good- will  (con-  deceased  partner.     It  does  not  survive  to 


348.] 


OP    A    CHANGE   IN   THE   PARTNERSHIP. 


441 


§  348.    Right  of   Survivors   to  take  at  Valuation.  —  It  haS  some- 
times been  supposed  that  the  surviving  partners  have  a  right  to 


the  remaining  partners,  unless  by  express 
agreement ;  but  it  may  by  agreement,  as 
it  may  be  agreed  that  any  particular  por- 
tion of  the  partnership  assets  shall  so 
survive.  Good-will  manifestly  forms  a 
portion  of  the  subject-matter  which  pro- 
duces the  profits  (which  constitutes  part- 
nership property)  ;  and  which  is  to  be 
divided  between  the  surviving  partners 
and  the  estate  of  the  deceased  partner, 
according  to  the  terms  of  the  contract, 
and,  when  that  is  silent,  according  to 
their  shares  in  the  concern.  There  is 
considerable  difficulty  in  defining,  accur- 
ately, what  is  included  under  this  term 
good-will:  it  seems  to  be  that  species  of 
connection  in  trade  which  induces  cus- 
tomers to  deal  with  a  y)articular  firm.  It 
varies  almost  in  every  case  ;  but  it  is  a 
matter  distinctly  appreciable,  which  may 
be  preserved  (at  least  to  some  extent),  if 
the  business  be  sold  as  a  going  concern, 
but  which  is  wholly  lost  if  the  concern  is 
wound  up,  its  liabilities  discharged,  and 
its  assets  got  in  and  distributed.  I  am 
of  opinion,  then,  that  both  on  principle, 
on  the  authority  of  the  decided  cases,  and 
on  the  ordinary  rules  of  common  sense,  I 
must,  whenever  there  is  a  reputation  and 
connection  in  business,  constituting  good- 
will,  treat  that  as  part  of  the  assets  of 
the  concern."  See  further,  on  this  rpies- 
tion,  Hammond  v.  Douglas,  5  Ves.  539  ; 
Farr  v.  Piiurce,  3  Madd.  74  ;  Chipj)endale 
V.  Tomlinson,  Cooke's  Baukr.  L.  431  ; 
Silk  V.  Osborn,  1  Esp.  140  ;  Coslake  v. 
Till,  1  Russ.  876  ;  Kennedy  v.  Lee,  3 
Meriv.  441,  452  ;  Webster  v.  "Webster,  3 
Swanst.  490,  n.  ;  Harrison  v.  Gardner, 
2  Madd.  198  ;  Butler  v.  Burleson,  16  Vt. 
176.  In  Lewis  v.  Langdon,  7  Sim.  421, 
it  was  contended  that  the  right  to  use  the 
designation  of  a  partnership  ranges  itself 
under  the  head  of  good-will,  and  that 
good-will  survives,  —  the  personal  repre- 
sentatives of  the  deceased  partner  having 
nothing  to  do  with  it.  The  Vice-Chan- 
cellor.  Sir  L.  Shadwell,  in  sustaining  this 
position,  said  :  "  The  question  in  this 
case  depends  on  the  right,  in  the  surviv- 
ing partner,  to  carry  on  the  business 
under  the  name  of  the  partnership.     Lord 


Eldon,  certainly,  has  expressed  a  doubt, 
in  the  case  of  Crawshay  v.  Collins  (15 
Ves.  227),  upon  what  has  been  under- 
stood as  the  proposition  laid  down  by 
Lord  Rosslyn,  in  the  case  of  Hammond 
V.  Douglas  (5  Ves.  539).  It  is  true,  that, 
the  (juestion  might  have  been,  to  a  certain 
degree,  whether,  having  regard  to  what 
had  taken  place,  the  money  should  be 
considered  to  belong  to  one  ])arty  rather 
than  to  another  :  and  it  is,  also,  observ- 
able, that  Lord  Eldon  might  have  been 
throwing  out  his  observations  with  refer- 
ence to  a  supposed  connection  between 
the  place  where  the  business  was  carried 
on  and  the  good-will.  But  it  occurs  to 
me,  that,  if  the  good-will  is  to  be  consid- 
ered as  a  salable  article  which  belongs  to 
the  partnershi}),  then  this  consequence 
must  follow  ;  namely,  that  the  surviving 
partner  must  be  under  an  obligation  to 
carry  on  the  trade  for  some  time  after  his 
partner's  death,  in  order  that  the  thing 
wliich  is  said  to  be  salable  may  be  pre- 
served until  it  can  be  sold.  If  a  part- 
nership were  carried  on  between  A.  and 
B.,  under  the  name  of  Smith  &  Co.,  and 
the  surviving  partner  chose  to  discontinue 
the  business,  and  to  write  to  the  cus- 
tomers, and  say  that  his  partner  was 
dead,  and  that  the  business  was  at  an 
end,  —  the  effect  would  be,  that  that 
which  is  said  to  be  salable  would  cease  to 
exist.  Now,  what  power  is  there  in  a 
court  of  equity  to  compel  a  partner  to 
carry  on  a  trade  after  the  death  of  his 
copartner,  merely  that,  at  a  future  time, 
the  good-will  (as  it  i§  called)  may  he 
sold  ?  It  is  plain  that,  unless  there  is 
such  a  power  in  this  court,  it  must  be  in 
the  discretion  of  the  surviving  partner  to 
determine  what  shall  be  done  with  the 
good-will  ;  and,  if  that  is  the  case,  it 
must  be  his  property.  I  cannot  but  think, 
when  two  partners  carry  on  a  business  in 
partnership  together,  under  a  given  name, 
that,  during  the  partnership,  it  is  the 
joint  right  of  them  both  to  carry  on  busi- 
ness under  that  name  ;  and  that,  upon 
the  death  of  one  of  them,  the  right  which 
they  before  had  jointly  becomes  the  sepa- 
rate riirht  of  the   survivor."     It  was  ac- 


442  THE   LAW   OF   PARTNERSHIP.  [CH.    XIII, 

take  all  the  effects  and  merchandise  (after  the  debts  are  paid  or 
secured)  at  a  vahiation.  And,  undoubtedly,  there  may  be  cases 
in  which  this  would  be  a  just  and  beneficial  mode  of  settlement, 
and  the  court  would  therefore  permit  or  order  it.  But  it  must  be 
clear  that  they  have  no  such  right.^  Indeed,  the  right  on  this 
point  is  on  the  other  side;  for  it  would  seem,  both  from  the 
reason  of  the  case  and  on  the  authorities,  that  the  representatives 

corJingly  held,    that,  as  the   plaintiff  in  the  good-will  he  must  account  for  it  ;  hnt 

this  case  had  never  abandoned  the  right  the  value  of  the  good-will   is   mateiinlly 

which  accrued  to  him  on  the  death  of  his  affected   by  the    fact   that   the   surviving 

]iartner,  an  injunction  would  be  granted  partner,  like  any  one  else,  may  start  the 

to   restrain  the   defendant,   who  was   ex-  same  business  in  the  same  place,  without 

ecutor  of  the  deceased  partner,  from  using  appropriating  the  good-will  if  he  refrains 

the  partnership  name  in  carrying  on   his  from   securing    any   advantage    from    his 

business.    See  Wade  v.  Jenkins,  2  Giffard,  direct  connection  with   the  old  business. 

509.     [The   rule   laid   down    in    Wedder-  See  the  subject  fully  discussed   and   the 

burn  V.  Wedderburn  has  finally  prevailed,  authorities  collected  ante,  §  181,  note  1.] 
and  if  the  surviving  partner  appropriates 

1  When  the  surviving  partner  continues  the  business,  whether  with  or  without  the 
consent  of  the  representative  of  the  deceased,  the  equitable  title  of  the  old  fiini  to  its 
assets  is  not  changed.  The  firm  still  owns  them,  and  the  creditors  of  the  old  firm  can 
subject  them  to  the  payment  of  debts.  The  survivor  will  in  the  regular  course  of 
things  sell  part  of  the  assets,  buy  other  merchandise,  and  contract  new  debts.  In 
selling  the  assets,  the  survivor  acts  within  his  rights ;  he  passes  title,  and  is  personally 
accountable  for  the  proceeds.  A  creditor  of  the  old  firm  has  no  right  therefore  to  the 
assets  thus  sold.  And  he  can  establish  no'claim  to  the  merchandise  bought  by  the 
survivor,  since  the  latter  bought  it  as  an  individual  trader.  The  old  creditors  there- 
fore are  entitled  to  priority  on  all  the  assets  of  the  old  firm  which  remain  «i  specie ; 
the  merchandise  bought  sin(;e  dissolution  is  the  separate  ]n'operty  of  the  survivor.  Ex 
parte  Morley,  L.  E.  8  Ch.  1026  ;  Ex  parte  Manchester  Bank,  12  Ch.  D.  917  ;  Ex  parte 
Butcher,  is"  Ch.  D.  465  (C.  A.);  Citizens'  Ins.  Co.  v.  Ligon,  59  Miss.  305  ;  Tiemann 
V.  Molliter,  71  Mo.  512  ;  Allen  v.  Second  Nat.  Bank,  6  Lea,  558  ;  Cowan  v.  Gill,  11 
Lea,  674.  If  the  partnership  is  continued  after  death  (see  ante,  §  343,  note  1)  all 
creditors  are  firm  creditors  and  all  assets  firm  assets ;  and  all  the  creditors,  whether 
their  debts  accrued  before  or  after  the  death  of  a  partner,  share  alike.  In  re  Simpson, 
L.  K.  9  Ch.  572. 

It  is  always  to  be  borne  in  mind  that  creditors  of  the  firm  may  be  estopped  from 
setting  up  their  claims.  They  have  the  right  to  call  for  immediate  payment  out  of  the 
assets.  If  knowing  of  the  dissolution  they  allow  the  assets  to  remain  in  the  hands  of 
the  surviving  partner  in  such  a  way  as  to  lead  the  public  to  believe  him  the  sole  owner, 
and  to  credit  him  as  such,  they  may  be  postjioned.  That  is  the  case  when  the  rejire- 
sentative  of  the  deceased  partner  allows  the  assets  to  be  used  for  a  long  time'  in  the 
business  of  the  surviving  partner.  Hoyt  v.  Sprague,  103  U.  S.  613.  But  it  must  be 
an  unusual  state  of  circumstances  which  would  estop  the  creditoi's. 

In  Fitzpatrick  v.  Flannagan,  106  U.  S.  648,  it  was  held  that  the  creditors  of  the 
old  firm  would  be  postponed  to  an  assignee  of  the  surviving  partner  in  consideration 
of  an  individual  debt,  even  as  to  assets  remaining  in  specie,  on  the  authority  of  Case  v. 
Beauregard,  99  U.  S.  119  {ante,  §  248,  note  1).  That  case  has  already  been  criticised, 
and  the  same  objection  would  apply  to  the  present  case.  An  opposite  conclusion  was 
reached,  in  the  case  of  an  assignment  by  the  surviving  partner,  iu  Allen  v.  Second 
Nat.  Bank,  6  Lee,  558,  supra. 


§  SJ9.] 


OF    A    CHANGE    IN    THE    PARTNERSHIP. 


443 


of  the  deceased  have  a  right  to  require  a  sale  of  the  effects,  as 
the  only  certain  way  of  ascertaining  their  vahie  and  making  a 
fair  division.  But  this  again,  although  a  rule,  cannot  be  deemed 
a  universal  rule  ;  for  equity  may  find  in  particular  circumstances 
good  reason  for  not  decreeing  a  sale,  although  it  must  be  admitted 
that  it  strongly  inclines  to  that  mode  of  settlement,  as,  on  the 
whole,  the  fairest  and  the  safest,  (y)  That  the  representatives 
of  the  deceased  may  have  an  account  taken  —  or,  rather,  that 
their  right  in  this  respect  is  as  complete  as  the  right  of  the  de- 
ceased while  he  lived  and  was  a  partner  —  seems  to  be  certain.  (2) 
§  349.  Survivorship  in  Actions.  —  At  law,  the  creditors  of  the 
firm  must  bring  their  actions  against  the  surviving  partners  only; 
who,  of  course,  charge  what  payments  they  are  obliged  to  make, 
in  account  with  the  estate  of  the  deceased.  On  the  other  hand, 
the  survivors  alone  bring  any  action  to  collect  a  partnership  debt, 
in  their  own  names.  At  common  law,  the  executor  or  adminis- 
trator of  the  deceased  cannot  be  joined  ;  and  the  executors  or 
administrators  of  the  last  survivor  sue  alone,  without  joining  the 
representatives  of  the  first  or  of  any  later  deceased,  (a) 


{y)  Crawshay  v.  Maule,  1  Swanst.  495, 
523;  Featherstonliaugh  v.  Fenwick,  17 
Ves.  298 ;  Cook  v.  Collingridge,  Jac.  607  ; 
Simmons  v.  Leonard,  3  Hare,  581.  In 
winding  up  the  concerns  of  a  partnership, 
after  a  dissolution,  one  partner  cannot 
take  the  partnersliip  stock  at  a  vahiation  ; 
but  its  vahie  must  be  ascertained  by  the 
conversion  of  it  into  money.  Sigourney 
V.  Munn,  7  Conn.  11  ;  Evans  v.  Evans,  9 
Paige,  178  ;  Dougherty  v.  Van  Nostrand, 
1  Hotf.  Ch.  68  ;  Conwell  v.  Sandidge,  8 
Dana,  278.  See  also,  on  this  subject, 
Mifflin  V.  Smith,  17  S.  &  R.  165  ;  Bradley 
V.  Chaniberlin,  16  Vt.  613  ;  U.  S.  Bank 
V.  Binney,  5  Mason,  185  ;  Dickinson  v. 
Bold,  3  Desaus.  501  ;  Wilson  v.  Green- 
wood, 1  Swanst.  471  ;  Leach  v.  Leach,  18 
Pick.  75 ;  Fereday  v.  Wightwick,  1  Tam- 
lyn,  261  ;  Rigden  v.  Pierce,  6  Madd.  353  ; 
Pierce  v.  Trigg,  10  Leigh,  406. 

(z)  Waring  v.  Cram,  1  Pars.  Sel.  Cas. 
622  ;  Washburn  v.  Goodman,  17  Pick. 
519  ;  Ogden  v.  Astor,  4  Sandf.  311.  In 
Scott  V.  Milne,  5  Beav.  215,  the  court  re- 
lused  to  open  accounts,  though  of  a  gen- 
eral and  summary  nature,  not  containing 
the  items,  and  which  had  been  indorsed 
by  a  surviving  partner  to  the  representa- 


tives of  a  deceased  partner,  and  had  re- 
mained unquestioned  for  twenty-two  years; 
but  it  decreed  an  account  limited  to  the 
subsequent  receipts  of  the  surviving  part- 
ner, which,  it  was  admitted,  had  taken 
place.  In  Wedderbnrn  v.  Wedderburn, 
22  Beav.  84,  it  is  said,  that  the  liability 
to  account  for  profits  derived  from  trade, 
carried  on  after  the  death  of  the  testator, 
must  depend,  in  the  absence  of  contract, 
upon  the  nature  of  the  trade,  the  mode  of 
carrying  it  on,  the  capital  employed,  the 
state  of  the  account  between  the  partner- 
ship and  the  deceased  partner,  and  the 
conduct  of  the  parties  after  his  death. 
And  see  Stoughton  v.  Lynch,  1  Johns. 
Ch.  469  ;  Brown  v.  Litton,  1  P.  Wins. 
140  ;  Hammond  v.  Douglas,  5  Ves.  539  ; 
Brown  v.  Vidler,  15  Ves.  223  ;  Brown  v. 
De  Tastet,  Jac.  284  ;  Fearns  (-•.  Young,  9 
Ves.  549. 

(a)  Barney  v.  Smith,  4  H.  &  J.  485  ; 
Murray  v.  Mumford,  6  Cow.  441 ;  Davis 
V.  Church,  1  W.  &  S.  240  ;  Clark  v. 
House,  23  Me.  560  ;  Peters  v.  Davis,  7 
Mass.  257  ;  Wallace  v.  Fitzsimmons,  1 
Dall.  248  ;  McCarty  v.  Nixon,  2  Dall.  65, 
note  ;  Smyth  v.  Hawthorn,  3  Rawle,  355  ; 
Yale  V.  Eames,  1  Met.  487 ;  Beach  v.  Hay- 


444 


THE    LAW    OF    PARTNERSHIP, 


[CH.    XIII. 


S  350.  Settlement  of  Estate  of  Deceased  Partner.  —  The  estate 
of  the  partnership  would  he  settled,  in  a  case  of  dissolution  by 
death,  entirely  on  equitable  principles ;  and  no  doubt  it  would 
be  required  that  the  claims  of  the  several  creditors  and  those  of 
the  joint  creditors  should  be  kept  entirely  distinct,  each  having 
its  separate  fund,  and  passing  over  to  the  other  only  in  case  of 
a  surplus.  Indeed,  as  we  have  already  intimated,  the  decided 
tendency  of  common-law  adjudication  seems  to  be  in  that  direc- 
tion, {b)  But  the  question  seems  not  to  be  so  fully  settled  by 
authority  as  we  think  it  to  be  on  principle.     In  the  whole  matter 


ward,  10  Ohio,  455  ;  Pfeffer  v.  Steiner,  27 
Mich.  537.  In  Louisiana,  the  .surviving 
partner  does  not  possess  the  right,  until  he 
is  authorized  by  the  Court  of  Probate,  to 
sue  alone  for,  or  to  receive,  partnership 
debts.  Flower  v.  O'Connor,  7  La.  194; 
Connelly  v.  Cheevers,  16  La.  130  ;  Hyde 
V.  Brashear,  19  La.  402  ;  Babcock  v. 
Brashear,  19  La.  404,  On  actions  against 
surviving  partners,  and  actions  against 
executors,  see  Richards  v.  Heather,  1  B. 
&  Aid.  29  ;  Given  i;.  Albert,  1  W.  &  S. 
333  ;  Osgood  v.  Spenser,  2  H.  &  G.  133  ; 
Grace  v.  Shurter,  1  Wend.  148  ;  Lang  v. 
Keppell,  1  Binn.  123;  Calder  v.  Ruther- 
ford, 1  Br.  &  B.  302,  7  Moore,  158.  In 
Thorpe  v.  Jackson,  2  Younge  &  C.  Exch. 
553,  it  was  held,  that  joint  contractors, 
whether  partners  or  not,  are  in  equity 
jointly  and  severally  liable  ;  and,  if  one 
die,  his  assets  are  liable,  but  other  con- 
tractors should  be  joined.  See  also  Schole- 
field  V.  Heaficld,  7  Sim.  607  [See  ante, 
§  249.] 

{b)  W^ilder  V.  Keeler,  3  Paige,  167; 
Morgan  r.  His  Creditors,  20  Martin  (La.) 
599  ;  M'Culloh  v.  Dashiell,  1  H.  &  G.  96  ; 
Payne  v.  Matthews,  6  Paige,  19  ;  Hall  v. 
Hall,  2  McCord  Ch.  32  ;  Bowden  v. 
Sehatzell,  1  Bail.  Eq.  360;  Cammack  v. 
Johnson,  1  Green  Ch.  163  ;  Ex  parte 
Moult,  1  Deac.  &  Ch.  44,  73,  1  Mont, 
292.  A  deceased  partner's  estate,  after 
payment  of  his  separate  debts,  is  applied 
in  payment  of  such  partnership  debts  as 
remain  ixnsatisfied  after  applying  the 
whole  partnership  assets  in  liquidation 
thereof ;  and,  if  his  personal  estate  is  in- 
sufficient, the  real  estate  of  the  deceased 
partner  is  to  taken.  Addis  v.  Knight,  2 
Meriv.    117,    119.      As  to   the   power  of 


survivors  to  make  a  new  contract  to  keep 
alive  a  debt  against  the  estate  of  a  de- 
ceased partner,  see  Braithwaite  v.  Britain, 
1  Keen,  221.  By  j)artnership  articles,  D. 
was  to  be  a  partner  with  A.  and  B.  in 
profits,  but  not  in  the  capital  stock  ;  and  he 
was  not  required  to  find  any  capital.  D.'s 
partner.ship  was  to  continue  for  twelve 
years,  at  the  expiration  of  which  term  his 
interest  in  the  concern  was  to  cease.  If 
D.  died  during  such  term,  his  represen- 
tatives were  to  receive  a  proportionate 
part  of  his  share  of  the  profits  of  the  cur- 
rent half-year,  for  the  period  up  to  his 
decease,  to  be  ascertained  according  to 
the  average  of  the  last  two  preceding 
half-yearly  stock-takings.  D.  died  :  after 
which  the  business  was  carried  on  by  A. 
and  B.  until  A.'s  death,  and  then  by  B. 
alone.  A  creditor  of  the  firm,  in  respect 
of  a  debt  contracted  while  the  firm  con- 
sisted of  A.,  B.,  and  D.,  claimed  to  have 
the  whole  of  B.'s  estate  ajiplied  in  pay- 
ment of  all  the  creditors  of  A.,  B.,  and 
D.,  without  regard  to  whether  their  debts 
were  contracted  before  or  after  the  death 
of  D.,  or  before  or  after  the  death  of  A, 
There  were  in  existence  specific  assets 
which  had  belonged  to  the  firm  while  it 
consisted  of  A.,  B.,  and  D.  It  was  held, 
that  under  the  partnership  articles,  D.'s 
executors  had  a  right  to  have  the  debts 
existing  at  D.'s  death  paid  out  of  the  then 
existing  assets  ;  that  the  assets  then  on 
hand,  and  now  existing  in  specie,  must 
therefore  be  applied  in  payment  of  the 
creditors  of  the  original  firm  of  A.,  B.,  and 
D,  ;  and  that,  therefore,  such  creditors 
could  not  take  B.'s  separate  assets  until  his 
separate  creditors  had  been  paid  in  full.  Ex 
parte  Dear,  In  re  White,  1  Ch.  D.  514. 


§  360.]  OP    A    CHANGE    IN    THE    PARTNERSHIP.  445 

of  the  settlement  of  such  an  estate,  there  are  yet  questions  wliich 
cannot  be  considered  as  positively  determined.  Thus,  after  some 
conflict  and  uncertainty,  it  seems  now  to  be  settled  in  England, 
that,  on  the  death  of  a  partner,  a  creditor  of  the  firm  may  pro- 
ceed at  once  in  equity  against  the  estate  of  the  deceased,  whether 
the  firm  or  the  surviving  partners  be  solvent  or  otherwise;  the 
court  re(piiring,  however,  that  the  surviving  partners  should  be 
made  parties,  because  they  are  interested  in  the  account,  (c)  It 
may  be  said,  however,  that  if  the  firm,  or  the  surviving  partner, 
is  solvent,  nothing  is  gained  by  this  :  the  estate  which  pays  the 
debt  charges  it  in  account  with  the  firm,  or  against  the  surviving 
partner ;  and  there  seems  to  be  little  more  reason  why  a  joint 
creditor  should  have  this  power  after  the  death  of  a  partner 
than  during  his  life,  (c?)  It  is  derived,  however,  from  the  prin- 
ciple, that  in  equity  all  the  conti'acts  of  a  partnership  are  con- 
sidered to  be  joint  and  several.  In  tiiis  country  this  rule  has 
been  a  good  deal  questioned;  and,  although  some  acknowledged 
princi})les  would  lead  to  it,  it  may  perhaps  be  doubted  whether 
the  result  of  a  final  adjudication  of  equity  on  this  point  will  not 
protect  the  estate  of  the  deceased  against  such  process,  unless 
special  circumstances  lead  to  the  conclusion  that  justice  to  the 
creditor,  in  that  particular  case,  requires  it.^ 

The  authorities  lead  also  very  strongly  to  the  rule,  that  where 
there  is  no  joint  fund,  and  no  surviving  partner  who  is  solvent, 
the  joint  creditor  shall  have  the  benefit  of  the  separate  estate  of 
a  deceased   partner,  pari  passu,  with  the   separate  creditors  of 

(c)  Wilkinson  v.  Henderson,   1  Mylne  waite  v.  Britain,  1  Keen,  219.     See  Kim- 

&  K.  582  ;  Devaynes  v.  Noble,  2  Russ.  &  ball  v.  Whitney,  15  Ind.  280. 
M.   495  ;    Thorpe  v.  Jackson,  2  Y.  &  C.  (d)  See   Ridgway   v.   Clare,    19    Beav. 

553  ;  Sleech's  Case,  1  Meriv.  539  ;  Braith-  111. 

1  In  accordance  with  the  English  doctrine,  it  is  held  in  some  jurisdictions  in  this 
country  that  on  the  death  of  a  partner  a  creditor  of  the  firm  may  at  once  proceed  in 
equity  against  the  estate.  Nelson  v.  Hill,  5  How.  127  ;  Fiske  v.  Gould,  12  F,  R. 
372;  Silverman  v.  Chase,  90  111.  37;  Ralston  v.  Moore,  105  Ind.  243  (by  statute); 
Rice,  appellant,  7  All.  112  (by  statute);  Irl)y  v.  Graham,  46  Miss.  425  {xcviblc);  Blair 
r.  Wood,  108  Pa.  278  (by  statute)  ;  Higgins  v.  Rector,  47  Tex.  361.  In  other  juris- 
dictions it  is  held  that  the  firm  creditor  cannot  proceed  against  the  deceased  unless  the 
liim  and  the  survivor  are  insolvent.  Troy  Iron  &  Nail  Factory  v.  Winslow,  11  Blatch. 
513  ;  Alsop  V.  Mather,  8  Conn.  584  ;  Filley  v.  Phelps,  18  Conn.  294  (scmb/c) ;  Pullen 
V.  Whitfield,  55  Ga.  174  ;  Anderson  v.  Pollard,  62  Ga.  46  ;  Buckingham  v.  Ludlum, 
37  N.  J.  E(i.  137  ;  Pope  v.  Cole,  55  N.  Y.  124  ;  First  Nat.  Bank  v.  Morgan,  73  N.  Y. 
593  ;  Horsey  v.  Heath,  5  Ohio,  353  ;  Pearce  v.  Cooke,  13  R.  I.  184  ;  Sherman  v. 
Krenl,  42  Wis.  33.  The  partnership  creditors  may  of  course  prove  their  claims  against 
the  estate,  and  secure  payment  of  their  claims,  if  necessary,  out  of  any  balance  left 
after  paying  the  separate  creditors  of  the  deceased.  Greene  v.  Butterworth,  45  N.  J. 
Eq.  738,  17  Atl.  949. 


446  THE    LAW    OF    PARTNERSHIP,  [CH.    XTII. 

that  partner,  (g)  We  see  no  more  justice  in  this  rule,  and  no 
more  reason  for  it,  than  for  saying  that  the  separate  creditor,  if 
there  be  no  separate  estate,  may  come  in  upon  the  joint  property 
equally  with  the  joint  creditors ;  and  this  has  never  been  per- 
mitted. And  the  strong  disapproval  of  the  rule  sometimes  met 
with,  (/)  connected  with  the  general  tendency  of  the  law  at  this 
day  to  complete  its  recognition  of  a  partnership  as  a  body  by 
itself,  with  its  own  means  appropriated  to  its  own  debts,  lead  us 
to  doubt  of  the  propriety  and  of  the  permanency  of  the  rule. 

§  351.  Notice  of  Death. — The  estate  of  a  deceased  partner 
may  be  discharged  by  payment  of  the  debt,  involving,  however, 
the  question  of  appropriation  of  payment  or,  by  a  transfer  of  the 
account,  involving  the  question  of  novation,  much  in  the  same 
way  in  which  a  retiring  partner  may  be  discharged  ;  and  the 
view  taken  of  these  questions,  when  considering  the  discharge 
of  a  retiring  partner,  leads  to  the  conclusion,  that  notice  of  a 
dissolution  by  death  is  not  necessary  to  prevent  the  estate  of  the 
deceased  from  becoming  liable  for  new  debts  of  any  kind. 

The  Supreme  Court  of  Massachusetts  has  considered  very  fully 
the  question,  whether  the  surviving  partners  are  bound  to  give 
notice  of  the  death  of  a  partner,  and  a  dissolution  by  his  death. 
It  is  decided,  for  reasons  which  seem  unanswerable,  that  there  is 
no  such  necessity  to  avoid  a  liability  caused  by  the  subsequent 
misuse  of  the  copartnership  name  by  one  of  tlie  firm.  The  court 
say,  Bigelow,  C.  J.,  giving  the  opinion,  that,  by  a  well-settled  rule, 
no  notice  need  be  given  by  the  representatives  of  the  deceased,  to 
avoid  liability  on  future  contracts  ;  and  they  see  no  reason  for 
imposing  a  duty  of  giving  notice  of  the  dissolution  of  the  firm  on 
surviving  partners.  (^) 

(c)  Sparhawk  v.  Russell,  10  Met.  305  ;  Stauffer,    1    Pen.    &  W.  198.      That  the 

Emanuel  v.  Bird,   19  Ala.  596.     And  see  separate  property  of  each  member  of  the 

Smith  V.  Mallory,  24  Ala.  628  ;  Wilby  v.  firm  is  liable  at  law  to  be  taken  in  execu- 

Phinney,  15  Mass.   116  ;  Busby  v.  Chen-  tion  by  any  creditor  of  the  firm,  see  Allen 

ault,  13  Ij.  Mod.  554  ;  Bell  v.  Newman,  5  v.  Wells,  ubi  sup.  ;    Newman  v.   Bagley, 

S.  &  R.  78.  16  Pick.  570  ;  M'CuUoh  v.  Dashiell,  1  H. 

(/)  M'Culloh  V.  Dashiell,   1  H.  &  G.  &  G.  96  ;  Tucker  v.  Oxley,   5  Cranch,  35. 

96  ;  Irby  v.  Gi-ahani,   46   Miss.  425.     See  See  this  question  fully  discussed  in  Silk  v. 

also  Pierce  v.  Jackson,  6  Mass.  242  ;  Eddie  Prime,  2  Lend.  Cas.  in   Etj.  313,   Hare  & 

V.  David.son,  1  Doug.  650  ;  Field  v.  Clark,  Wallace's  notes. 

4  Ves.  396  ;  Fisk  v.  Herrick,  6  Mass.  271  ;  (g)  Marlett  v.  Jackman,  3  Allen,   287. 

Allen  V.  Wells,  22  Pick.  450  ;  Melville  v.  And  see   Webster  v.   Web.ster,  3  Swanst. 

Brown,  15  Mass.  82  ;  Tappan  v.  Blaisdell,  490,  n.  ;  VuUiamy  v.  Noble,  3  Meriv.  614  ; 

6  N.  H.  190.     But  see  Lord  v.  Baldwin,  6  Washburn  v.  Goodman,  17  Pick.  519.  Aa 

Pick.  348  ;    French  v.  Chase,  6  Me.  166 ;  exception  as  to  the  necessity  of  .such  a 

Church  V.  Knox,  2  Conn.  514  ;  Barber  v.  notice  has  been  made,  when  the  surviving 

Hartford  Bank,   9  Conn.  407  ;  Donner  v.  partners,  or  one  of  them,  are  executors  ol 


§  352.]  OF    A    CHANGE    IN    THE    PARTNERSHIP.  447 

The  surviving  partners,  if  they  hold  claims  or  a  balance 
against  the  deceased  partners,  are  treated  like  other  creditors. 
And  if  as  creditors  they  have  any  advantage,  —  as,  for  example, 
by  being  specialty  creditors,  —  this  advantage  is  preserved  to 
them,  (h)  This  advantage  is  greater  in  England  than  here. 
There,  an  administrator  was  not  permitted  to  retain  his  own 
simple  contract  debts,  against  a  surviving  partner,  with  whom 
the  deceased  partner  had  covenanted  to  pay  certain  debts,  and 
had  not  {)aid  them. 

§  352.  Survivor  made  Executor  of  Deceased.  —  If  a  deceased 
partner  has  made  liis  partner  his  executor,  certain  consequences 
still  result  in  England  which  would  not  take  place  here ;  as  tlie 
rules  that  an  executor  should  have  all  property  undisposed  of,  and 
that  the  appointment  of  hira  as  executor  discharges  any  debt  due 
from  him,  which  have  lost  much  of  their  force  and  influence  there, 
have  none  whatever  here.  It  is  very  common  in  this  country 
for  a  partner  to  appoint  a  co{)artner  iiis  executor  :  this  adds  to 
his  power  as  surviving  partner  that  of  executor ;  but  the  combi- 
nation of  these  two  characters  gives  him  no  new  rights  or  powers 
in  either  of  them.  It  has  been  said  that  the  duties  of  these  two 
characters  are  inconsistent,  and,  therefore,  the  practice  objection- 
able ;  but  they  are  not  found  to  be  so  in  fact  in  this  country. 
Doubtless,  the  executor  would  be  watched  very  carefully,  to  guard 
against  his  using  his  executorship  as  a  means  of  securing  undue 
personal  advantage  to  himself  as  a  partner.  The  watchfulness 
of  a  court  of  equity  on  this  point  is  well  illustrated  by  an  Englisli 
case,  in  which  the  court  opened  accounts  and  arrangements  be- 
tween executor  partners  and  legatees,  after  they  had  been  con- 
firmed by  being  acted  upon  for  some  thirty  years.  (2) 

How  the  acts  of  a  person  who  is  both  executor  and  surviving 
partner  are  distinguished,  so  that  what  he  does  in  one  capacity 
shall  not  affect  rights  or  interests  in  his  hands  in  another,  may 
be  illustrated  by  the  rule,  that  payments  by  a  firm,  after  the 
death  of  a  partner,  even  under  its  old  name,  vrhere  one  of  the 
firm  is  executor  of  the  deceased,  shall  not  be  considered  pay- 

the  deceased  partner  :  for  then,  in  order  to  general  question,  Murray  v.   Muniford,  6 

exonerate  his  estate  from  future   liability.  Cow.  441  ;  Canfield  v.  Hard,  6  Conn.  184  ; 

it  is  said  that  due  Tiotice  ought  to  be  given  Burwell    v.    Mandeville,     2     How.     560; 

of  his  death,  to  the  creditors  of  the  firm  ;  Downs  i\  Collins,  6  Hare,  418. 
because,  in  the  absence  of  sueh  notice,  the  (h)  Musson  v.  May,   3  Ves.  &  B.   194  ; 

e.xccutor  partner,  in   his  character  of  per-  Kerr  v.    Hawthorne,   4  Yeates,  170.     See 

sonal  representative  of  the  deceased,  has  Newell  v.  Humphrey,  37  Vt.  265. 
power  to  bind    his  estate.      V\illianiy  r.  (/)    Weddeiburn    v.     Wedderburn,    2 

Noble,    3  Meriv.   714.     See  also,    on  the  Keen,  722,  4  Mylne  &  Cr.  41. 


448  THE   LAW   OF    PARTNERSHIP.  [CH    XIII. 

nients  by  that  partner  as  executor  of  the  deceased,  if  such  pay- 
ments would  have  the  effect  of  preventing  the  operation  of  the 
statute  of  limitations  as  against  debts  due  from  his  estate.  (./  ) 

§  353.  Power  of  Appointment  given  by  the  Articles.  —  We  have 
already  remarked  that  the  articles  forming  the  partnership,  or  an 
agreement  between  the  partners  subsequent  to  the  articles,  may 
provide  either  that  certain  representatives  of  a  partner  shall,  at 
ills  death,  become  partners,  or  a  partner  in  his  place,  or  that  the 
partner  may  make  provision  to  this  effect  in  his  will.  If  no  such 
agreement  is  made  between  the  partners,  no  one  of  them  has 
any  power,  in  this  respect,  excepting  over  his  own  estate.  He 
may  leave  this  to  whom  he  will,  and  on  what  condition  he  will. 
And  if  he  says  therein  that  such  a  person,  whether  devisee  or 
legatee,  shall  become  a  partner  in  the  firm,  the  person  so  pointed 
out  must  submit  to  the  conditions,  and  offer  himself  as  partner. 
'J'his  is  equally  true  whether  the  deceased  has  a  power  of  ap- 
])ointment  or  not;  for  it  is  merely  an  application  of  the  rule 
that  he  who  would  take  the  benefit  of  a  testamentary  provision 
must  comply  with  its  requirements.  And  doubtless,  if,  by  an 
agreement,  a  partner  bound  his  estate  to  the  continuance  of  a 
partnership,  it  would  be  regarded  by  the  law  as  so  bound,  unless 
the  provision  were  obviously  foolish  or  inequitable ;  and  all  the 
rights  of  the  representatives  would  be  subject  to  this  obliga- 
tion, {k) 

(j)  Way  V.  Bassett,  5  Hare,  55.  In  executorof  the  deceased  partner,  and  which 
this  case,  A.  deposited  moneys  with  B.,  the  surviving  partners  were  in  that  charac- 
C,  &  D.,  who  were  bankers  in  partnership  ;  ter  bound  to  do,  cannot  prima  facie  be 
and  received  from  them  notes,  in  which  considered  to  have  been  done  in  the  charac- 
they  promised  to  pay  him  tlie  amount  three  ter  of  executor.  For  authority  that  the 
months  after  sight,  with  interest.  B.  died  acts  of  the  surviving  or  continuing  part- 
in  March,  1837,  having  appointed  C.  and  ners  cannot  keep  alive  a  debt  or  obligation, 
another  his  executors.  C.  &  D.  continued  or  otlierwise  augment  or  prolong  any  lia- 
the  banking  business  in  the  same  name  bility  of  the  estate  of  the  deceased  partner, 
until  1842  ;  and  interest  was  regularly  see  Atkins  v.  Tredgold,  2  B.  &  C.  23  ; 
paid  on  the  notes  by  the  firm  until  that  Slater  v.  Lawson,  1  B.  &  Ad.  396  ;  Ault 
time,  the  payment  being  indorsed  ujion  v.  Goodrich,  4  Euss.  431  ;  Scholey  w.  Wal- 
the  notes,  and  signed  by  one  of  the  part-  ton,  12  M.  &  W.  510  ;  Barker  v.  Buttress, 
ners  or  their  clerk.  In  December,  1843,  7  Beav.  134  ;  Ex  imrte.  Woodward,  3 
the  executors  of  A.  filed  their  bill  against  Mont.  &  A.  232.  A  surviving  partner, 
the  executors  of  B.,  and  the  devisees  under  being  the  executor  of  his  deceased  partner, 
his  will,  for  payment  of  the  amount  of  is  not  entitled  to  an  allowance  for  carrying 
the  notes  out  of  the  personal  or  real  estate  on  the  business,  after  his  partner's  decease, 
of  B.  It  was  held  tliat  the  acts  of  the  for  the  benefit  of  the  estate.  Burden  v. 
surviving  partners  of  B.  had  not  the  effect  Burden,  1  Ves.  &  B.  170;  Stocken  v.  Daw- 
of  taking  the  debt  upon  the  notes  out  of  son,  6  Beav.  371. 

the  operation  of  the  statute  of  limitations,  {Jc)  Pemberton  v.  Oakes,   4  Russ.  154  ; 
as  against  the  real  or  personal  estate  of  the  Ponton  v.  Dunn,  1  Russ.  &  M.  402  ;  Craw- 
deceased  partner  ;  and  also,  that  acts  done  shay  v.  Maule,  1  Swanst.  512. 
by  one  of  the  surviving  partners,  who  was 


§  354.]  OF    A    CHANGE    IN    THE    PARTNERSHIP.  449 

Whether,  however,  this  continuance  be  provided  for  by  the 
articles,  irrespective  of  the  will  of  one  who  should  die,  or  by  the 
will  of  a  deceased  partner  under  the  authority  of  the  articles,  we 
have  already  stated  our  opinion  that  it  is  called  a  continuance  of 
the  partnership  inaccurately  ;  it  being,  in  fact  and  in  law,  only  a 
provision  for  the  formation  of  a  new  partnership  which  shall 
stand  in  a  certain  relation  to  the  old  one. 

§  354.  Appointee  becomes  Partner  only  by  his  Consent.  —  It  is 
admitted  that  any  such  appointment  or  direction  by  will  shall  be 
construed  very  liberally  towards  the  appointee,  whether  executor 
or  not,  so  as  to  give  him  an  election  whether  he  will  become  a 
partner  or  not.  (Z)  But  it  must  be  obvious  that  if  there  be.no 
room  for  this  construction,  —  that  is,  if  the  requirement  be  in 
terms  the  most  perem})tory  and  absolute,  —  it  cannot,  of  itself, 
make  the  appointee  a  partner.  He  does  not  become  one  until 
he  assumes  that  relation  by  his  own  act.  The  deceased  may  have 
bound  his  estate  effectually ;  but,  if  the  appointee  chooses  to 
renounce  the  estate,  he  is  certainly  no  ))artner.  And  this  proves 
that  it  is  not  a  mei'e  continuance  of  the  same  partnership  with  a 
new  member.  So  it  is  said,  that,  if  such  appointees,  executors, 
or  others  are  silent,  even  if  the  right  of  choice  be  given  to  the 
executors,  their  consent  will  be  assumed,  and  they  will  be  re- 
garded as  partners.  (7?i)  But,  in  the  first  place,  their  consent 
would  hardly  be  assumed  from  their  mere  silence;  and  not  unless 
they  acted  in  some  way  to  show  that  they  were  partners,  or  un- 
less the  being  partners  was  productive  of  some  direct  benefit  to 
them,  as  by  a  legacy  which  they  indicated  their  purpose  of  taking. 
And,  in  the  next  place,  the  very  presumption  of  their  consent 
shows  that  it  was  necessary,  and  was  really  that  which  made 
them  partners,  and  made  the  new  partnership.  It  is  even  held  as  a 
rule  in  equity,  that  such  appointee  has  not  only  the  right  of  elec- 
tion, but  a  right  to  inspect  the  books  and  accounts  of  the  partner- 
ship, that  he  may  know  how  to  exercise  this  right,  (w) 

(Z)  Pigottv.  Bagley,  McClel.  &Y.  569;  sentative  of  the  partner  so  dying,  should 

Wainwright  v.   Waterman,    1   Ves.    311  ;  be  let  into  the  partnership,  and  become  a 

Crawsliay  v.   Maule,    1  Swanst.   512,   per  partner  therein,  in  the  same  manner,  and 

Lord    Eldon  ;    Kershaw   v.   Matthews,    2  upon  the  same  terms  and  conditions.     It 

Russ.  62.  was  held  that  this  was  not  an  absolute  or 

(m)  Morris  v.   Harrison,  Colles,  P.  C.  imperative  obligation  on  the  widow  or  per- 

157.  sonal  representative  to  become  a  partner  ; 

(n)  By  partnership  articles,  it  wasstipu-  but  only  an  option  so  to  do,  with  a  stipu- 
lated, that  the  partnership  should  con-  lation  by  the  surviving  partner  to  admit 
tinue  for  nineteen  years  ;  and  that,  if  either  them.  It  was  also  held  that  the  widow, 
of  the  partners  should  die,  during  the  term,  or  personal  representative,  was  entitled  to 
the  widow,  or  other  legal  personal  repre-  a  reasonable  time  to  inspect  and  examine 

29 


450  THE   LAW    OF   PARTNERSHIP.  [CH.    XIII. 

Whether  an  appointee  becomes  partner  on  his  own  account,  or 
an  executor  or  trustee  becomes  partner  for  the  benefit  of  the 
representatives  of  the  deceased,  or  there  is  no  new  member, 
although  the  estate  of  the  deceased,  or  some  part  of  it,  remains 
in  the  partnership  and  in  the  business,  for  the  benefit  of  his 
representatives  or  appointees, — we  consider  that  the  former  part- 
nership came  to  its  end  by  his  death,  and  that  the  firm  now  going 
on,  however  composed  as  to  persons  or  estate  or  business,  is  a 
new  one.  Nor  is  it  in  law  any  less  a  new  one  because  it  stands 
in  very  close  relations  with  the  former,  and  may  be  considered  its 
immediate  successor  or  substitute  or  representative,  (o) 

§  355.  Estate  Liable  only  so  far  as  Expressly  Provided.  —  What- 
ever powers  of  this  kind  are  given  to  an  executor,  eitlier  to 
become  partner,  or,  being  partner,  to  carry  on  the  business  for 
the  benefit  of  the  representatives  of  the  deceased,  or  to  leave  the 
estate  of  the  deceased  in  the  partnership  and  in  the  business,  on 
any  terms  and  for  any  purpose,  these  powers  would  probably 
be  strictly  construed  ;  at  least,  they  would  never  be  enlarged  by 
implication.  Thus,  it  is  clear  that  the  deceased  may  limit  the 
amount  or  proportion  of  his  estate  which  shall  remain  in  the 
partnership  or  go  into  it,  at  his  own  pleasure ;  and  the  executors 
or  aftpointees  can  no  more  enlarge  this  than  they  can  violate  any 
other  of  his  directions.  Nor  will  such  a  disposition  or  limitation 
in  any  way  affect  the  rights  of  the  creditors  of  the  partnership. 
But  it  seems  to  be  regarded  in  equity  somewhat  as  a  proposition 
made  to  them,  to  which  they  may  assent  if  they  please.  They 
have  the  power  of  having  all  his  estate  brought  forth  and  made 
answerable  for  the  debts.  But  they  need  not  execute  this  power, 
unless  they  see  fit  to  do  so ;  and  delay  and  silence  on  their  part 
will  be  considered  as  a  confirmation  of  the  provision  of  a  deceased 
partner,  (jo  ) 

So,  the  creditors  of  the  new  partnership  have  no  claim  what- 
ever upon,  and  no  interest  in,  the  general  assets  of  the  deceased, 
or  any  part  of  them,  but  that  which  he  expressly  places  in  the 
new  partnership ;  which  is  also  another  illustration  of  the  prin- 

the  partnership  accounts,  but  not  to  have  titled   to  know  the  precise  value  of  the 

the  accounts  taken,    before   they   elected  benefit  intended,    before  election.     Pigott 

whether  they  would  become  partners.    The  v.  Bagley,  1  McClel.  &  Y.  569. 

usual  case  of  election  is,  where  a  person  (o)  See  cases  cited  infra. 

has  a  right,  independent  of  a  testator,  and  (j>)  Downs  v.   Collins,    ti   Hare,    418; 

the  testator  gives  such  person  some  other  Ex  parte   Garland,   10  Ves.  119.     On  the 

right  or  benefit,  on  condition  of  the  former  question  of  silence  being  a  confirmation  of 

being    relinquished,    as    the   dower  of  a  the    provision,    see    Monis    v.    Harrison, 

widow  ;  and,  in  such  case,  the  party  is  eu-  Colles,  P.  C.  157. 


§  356.]  OF   A    CHANGE   IN   THE   PARTNERSHIP.  451 

ciple,  that  this  continued  partnership,  so  called,  is  a  new  one.^ 
If  a  part  of  the  property  goes  into  the  new  partnership,  but  no 
person  is  added  to  it,  the  creditors  of  the  new  firm  have  only  the 
security  of  this  part.  ((/) 

§  356.  Trustee  or  Other  Appointee  may  be  liable  Personally.  — If 
a  person  goes  with  the  business  and  takes  part  in  it,  either  as 
executor,  or  as  trustee,  the  creditors  generally  have  his  personal 
liability  as  partner,  in  the  same  way  as  that  of  the  other  partners  ; 
for  it  seems  to  be  laid  down  as  a  positive  rule,  that  an  executor 
who  carries  on  the  business  of  his  testator  pledges  his  own  respon- 

(q)   Harwell  /;.  Mandeville,  2  How.  560  ;  sible  to  hold  that  the  trade  is  to  be  carried 

Cutbush  V.   Cutbush,   1    Heav.  184  ;  Wil-  on,  perhaps  for  a  century  ;  and  at  the  end 

lianison   v    Naylor,   3  Y.    &  C.  208  ;   Ex  of  that  time  the  creditors,   dealing  with 

parte  Garland,  10  Ves.  110,  by  Lord  Eldon,  that  trade,  are,  merely  because  it  is  directed 

that  under  the  bankruptcy  of  an  executor  by  the  will  to  be  carried  on,  to  pursue  the 

and  trustee  directed   by  the  will  to  carry  general  assets,  distributed  perhaps  to  fifty 

on  a  trade,  and  a  limited  sum  to  be  paid  families."     See  also   Pitkin  v.   Pitkin,   7 

to  him  by  the  trustees  for  that  purpose,  Conn.  307  ;  Ex  parte  Richardson,  3  JIadd. 

the  genera!  assets  beyond  that  fund  are  not  138,  157  ;  Thompson  v.  Andrews,  1  Mylne 

liable.     The  Lord  Chancellor  says  :   '*  My  &  K.  116. 
opinion  upon  this  case  is,  that  it  is  impos- 

1  Where  the  articles  provide  or  the  deceased  partner  directed  that  his  interest 
should  remain  in  the  business,  that  does  not,  without  a  special  provision  to  that  effect, 
render  the  general  estate  of  the  deceased  liable  for  the  debts  later  contracted.  An 
estate  cannot  be  a  partner.  Siibseiiuent  creditors  have  the  personal  security  of  such 
persons  as  actually  take  part  in  the  business,  and  may  levy  upon  all  the  property  of 
the  partnership  ,  the  interest  of  the  deceased  in  the  property  being,  of  course,  post- 
poned to  the  claim  of  the  creditors.  But  the  risk  of  the  estate  is  confined  to  the 
money  actually  invested  in  the  business  at  the  time  of  the  death.  Smith  v.  Ayer,  101 
U.  S.  320  ;  Cook  v.  Rogers,  3  F.  R.  69  ;  Vincent  v.  Martin,  79  Ala.  540  ;  Brasfield  v. 
French,  59  Miss.  632  ;  Wild  v,  Davenport,  48  N.  J.  L.  129,  7  Atl.  295  ;  Nat.  Bank 
of  Newburgh  v.  Bigler,  83  N.  Y.  51  ;  Stewart  v.  Robinson,  115  N.  Y.  328,  22  N.  E. 
160  ;  Lucht  v.  Behrens,  28  Oh.  St.  231.  And  the  estate  is  not  even  liable  for  divi- 
dends of  profits  received  by  it  if  they  were  bona  Jide  ordered  by  the  partners,  and  did 
not  when  made  diminish  the  capital  or  hinder  the  payment  of  debts.  Jones  v.  Walker, 
103  U.  S.  444. 

The  curious  analogy  between  the  position  of  the  estate  in  this  case  and  that  of  a 
special  partner  under  limited  partnership  acts  is  to  be  noted.  It  is  perhaps  worthy  of 
consideration  whether  some  method  might  not  be  found,  apart  from  the  statute,  of 
investing  money  in  a  partnership  without  becoming  liable  for  more  than  the  amount 
invested.  Compare,  for  example,  cases  of  loan  to  a  partnership  to  be  compensated  by 
a  share  in  the  profits,  ante,  §  70. 

The  deceased  can,  it  would  seem,  render  his  general  estate  liable  by  explicit  direc- 
tions to  that  effect ;  but  it  must  appear  unequivocally  that  he  so  intended.  Brasfield 
V.  French,  59  Miss.  632  ;  Exchange  Bank  i\  Tracy,  77  Mo.  594  ;  Willis  v.  Sharp,  113 
N.  Y.  586,  21  N.  E.  705.  But  see  Blodgett  v.  American  Nat.  Bank,  49  Conn.  1. 
Though  a  signature  in  the  firm  name  by  the  surviving  partner  would  not  bind  the 
estate,  a  transfer  of  property  by  the  survivor,  such  as  an  assignment  for  the  benefit  of 
creditors,  passes,  of  course,  all  interest  of  the  estate  in  the  property  so  transferred. 
Shaw,  Appellant,  81  Me.  207,  16  Atl.  662  ;  Bell  v.  Hepworth,  134  N.  Y.  442,  31  N.  E. 
918. 


452 


THE   LAW   OF   PARTNERSHIP. 


[CH.    XITI. 


sibility  to  the  creditors ;  and  this  although  it  is  certain  that  he 
continues  the  business  in  no  degree  for  his  own  benefit,  but  for 
that  of  the  infant  children  of  the  deceased. (r)  ^  In  this  country, 
a  person  may  be  appointed  by  equity  to  carry  on  a  business  for  the 
benefit  of  an  infant  partner ;  (s)  and,  doubtless,  an  English  court 
of  equity  has  this  power;  and,  although  we  know  of  no  case  in 
which  it  has  been  exercised,  there  are  cases  in  which  reference  is 
made  to  this  power,  (t)  But  we  do  not  think  that  a  person  so 
appointed  by  the  court  would  be  held,  unless  a  liberal  compensa- 
tion were  made  to  him,  subject  to  the  stringent  liabilities  which, 
according  to  the  authorities,  would  seem  to  attach  to  an  executor 


(r)  Wightman  i'.  Townroe,  1  M.  &  S. 
412,  per  Bayley,  J.  :  "The  executors  in 
this  case  are  mere  volunteers.  At  law, 
they  became  the  legal  {iroprietors  in  re- 
spect of  everything  belonging  to  the 
trade  ;  and  consequently  are  liable  for  the 
legal  debts."  Lord  Ellenborough,  C.  J.  : 
"The  fund  subsisting  at  the  death  of  the 
testator,  under  a  due  administration  of 
the  will,  should  have  been  disposed  of  by 
the  executors,  and  converted  into  money, 
and  distributed  as  assets.  Instead  of  this, 
it  is  embarked  dc  novo  in  the  trade  in  the 
purchase  of  other  barley,  and  a  variety 
of  other  contracts,  to  which  the  infant  is 
not  privy,  nor  bound  by  them,  but  may 
renounce  when  she  comes  of  age  as  dam- 
nosa  hcereditas.  If,  then,  the  infant  has 
such  an  option,  who  but  the  executors 
can  be  liable  ?"  See  the  remarks  of  Lord 
Mansfield  in  Barker  r.  Parker,  1  T.  R. 
295.  See  also  Ex  parte  Richardson,  1 
Buck.  209;  Owen  v.  Body,  5  A.  &  E. 
28  ;  Alsop  D.  Mather,  8  Conn.  587.  If 
an  executor,  without  any  authority  from 
the  will,  take  upon  himself  to  trade  with 
the  assets,  the  testator's  estate  will  not  be 
liable  in  case  of  his  bankruptcy  ;  the 
testator's  creditors  and  legatees  will  have 
a  right  to  prove  demands  for  such  of  the 


assets  as  have  been  wasted  by  the  executor 
in  the  trade,  in  projiortion  to  their  re- 
spective interests ;  and  with  respect  to 
such  of  the  assets  as  can  be  specifically 
distinguished  to  be  a  part  of  the  testator's 
estate,  they  will  not  pass  to  the  as- 
signees ;  the  executor  holding  them  alieno 
jure,  they  will  not  be  liable  to  his  bank- 
ruptcy. Ex  parte  Garland,  10  Ves.  110; 
Toller  on  Executors,  487  ;  Ex  parte  Rich- 
ardson, 1  Buck,  202. 

(s)  Thompson  v.  Brown,  4  Johns.  Ch. 
619  ;  Powell  v.  North,  3  Ind.  392. 

(t)  In  Sayer  v.  Bennett,  cited  1  Mon- 
tagu on  Partnership,  Appendix,  20,  1 
Cox,  107,  Lord  Kenyon,  in  a  case  where 
there  was  an  application  for  the  exercise 
of  this  power  by  chancery  for  the  benefit 
of  a  lunatic,  observed  :  "  It  is  said  that 
equity  should  appoint  some  person  to 
carry  on  the  business  for  the  benefit  of 
the  lunatic,  as  they  would  have  done  for  an 
infant;  but  I  say,  God  forbid."  And  in 
Barker  v.  Parker,  1  T.  R.  295,  Lord 
Mansfield  said  :  "If  executors  carry  on 
a  trade,  they  must  do  it  as  individuals, 
for  their  own  advantage.  I  remember 
many  instances  of  trade  being  carried  on 
under  the  direction  of  the  court  of  chan- 
cery." 


1  Where  the  executor,  according  to  directions  in  the  articles  or  otherwise,  takes 
part  in  the  business  he  becomes  personally  liable  as  a  partner.  Ante,  §  74  ;  Mattison 
V.  Farnham,  44  Minn.  95,  46  N.  W.  347  (semb/e)  ,  Citizens'  Ins.  Co.  v.  Ligon,  59 
Miss.  305  ;  Wild  v.  Davenport,  48  N.  J.  L.  129,  7  Atl.  295  ;  Willis  v.  Sharp,  113  N.  Y. 
586,  21  N.  E.  705.  But  the  executor  is  not  liable  personally  if  he  merely  leaves  the 
share  of  the  deceased  in  the  business,  without  taking  part  in  it.  Avery  v.  Myers,  60 
Miss.  367  ;  Wild  v.  Davenport,  48  N.  J.  L.  129,  7  Atl  295.  If  the  executor  becomes  a 
partner  it  is  in  a  new  firm,  and  he  is  not  liable  personally  for  an  old  debt.  Mattison 
V.  Farnham,  44  Minn.  95,  46  N.  W.  347. 


§  356.] 


OF   A    CHANGE   IN    THE   PARTNERSHIP. 


453 


who  carries  on  the  business  in  this  way.  It  would  seem  that 
administrators  are  not  chargeable  personally  with  a  loss  to  the 
assets  of  tiieir  intestate,  which  were  in  good  faith  and  for  good 
reason  left  for  a  time  in  the  business,  unless  some  negligence  or 
other  fault  imputable  to  them  can  be  considered  as  a  cause  of  the 
loss,  (w) 


{ji)  In  Rowtli  V.  Howell,  3  Ves.  565, 
it  was  held,  tiiat  executors  were  not  liable 
for  a  loss  by  the  insolvency  of  a  banker 
whom  the  testator  had  trusted,  and  with 
whom  they  suffered  stock,  deposited  by 
the  testator,  to  remain  altliough  they 
were  directed  to  pay  debts,  and  lay  out 
the  residue  in  mortgages  with  all  conven- 
ient speed.  They  had  not  been  guilty  of 
laches.  In  Thompson  v.  Brown,  4  Johns. 
Ch.  628,  the  distinction  which  exists  in 
the  two  classes  of  cases  is  very  clearly 
stated  by  Chancellor  Kent.  See  also 
Knight  I'.  The  Earl  of  Plymouth,  3  Atk. 
480,  Dickens,  120  ;  Wilkinson  v.  Stafford, 
1  Ves.  Jr.  41  ;  Vez  v.  Emery,  5  Ves.  144. 
To  authorize  executors  to  carry  on  a  trade, 


or  to  permit  it  to  be  carried  on  with  the 
property  of  a  testator  held  by  them  in 
trust,  there  ought  to  be  the  most  distinct 
and  positive  authority  and  direction  given 
by  the  will  itself  for  that  purpose.  Kirk- 
nian  v.  Booth,  11  Beav.  273,  280.  By 
partnership  articles,  testator's  capital  was 
to  remain  in  the  concern  for  eighteen 
months  after  his  death.  By  his  will,  he 
conveyed  his  property  to  his  executois,  in 
trust  to  paj'  the  rent,  issues,  and  profits, 
dividends,  interests,  and  income  of  his 
real  and  personal  estate  to  his  wife,  for 
life.  It  was  held  that  the  wife  was  en- 
titled to  the  profits  of  the  capital  in  the 
partnership  until  it  was  separated.  Skir- 
ving  V.  Williams,  24  Beav.  275. 


454  THE   LAW   OF   PARTNERSHIP.  [CH.   XIV. 


CHAPTER   XIV. 

OF   DISSOLUTION    BY    DECREE. 

§  357.  Method  of  Dissolving  Partnership.  —  The  COUrts  of  com- 
mon law  have  no  power  whatever  of  decreeing  or  causing  a  dis- 
sokition  of  a  partnership,  (a)  In  some  cases,  in  which  equity 
would  make  such  a  decree,  as  where  a  partnership  was  formed 
through  fraud,  courts  of  law  might  apply  the  principle  that  a  con- 
tract so  vitiated  never  had  force,  and  on  this  ground  declare  it 
null,  and  avoid  the  partnership.  But  courts  of  equity  have  full 
power  over  this  matter  ;  and  upon  a  bill  filed  by  any  partner,  alle- 
ging a  sufficient  cause,  and  upon  proper  evidence,  if  the  facts  are 
not  admitted,  the  court  decrees  a  dissolution  of  tlie  partn'^r- 
ship.  (6)  A  decree  or  judgment  for  winding  up  the  affairs  of  a 
partnership  may  divide  the  stock  and  property,  after  the  debts  are 
paid,  among  the  partners  ,  or  order  it  sold,  and  divide  the  proceeds 
in  a  certain  way,  which  is  the  more  common  case. (56)  Whichever 
is  done,  the  decree  should,  it  is  said,  not  be  in  the  alternative,  but 
positive  and  definite,  (hhh') 

The  decree  may  declare  that  the  partnership  never  existed.^  If 
fraud,  or  oppressive  or  wrongful  or  illegal  purpose,  or  extreme  and 
certain  folly,  in  the  inception  and  formation  of  the  contract,  be 
alleged  and  proved,  the  court  would  declare  that  the  original  for- 
mation of  a  partnership  so  tainted  had  no  validity  in  law,  and 
that  the  partnership  never  existed,  (c)  This  procedure  is,  how- 
la)  Story  on  Part.  §  284  ;  1  Storj'  on  (bh)  Watney  v.  Wells,  L.  R.  2  C'h, 
Eq.  Jur.  §  673  ;  Stone  v.   Fouse,  3  Cal.     250. 

294  ;    Nugent     v.    Locke,    4    Cal.     320  ,  (hhb)  Harper  v.  Lami)ing,  33  Cal.  641. 

"Wilson  V.  Lassen,  5  Cal.  116 ;  Barnstead  (c)  Lord     Eldon,     in     Tattersliall     r. 

V.  Km]. ire  Mining  Co.,  5  Cal.  299.  Groote,  2   B.  &    P.    135,    said  :  "  Courts 

(h)  See  eases  cited  in  the  following  of  equity  interfere  in  cases  where  fraud 
notes.  And  see  Baxter  v.  West,  1  Drewry  has  been  practised,  and  onier  the  con- 
&  Srn.  173  ;  and  Dumont  v.  Ruepprecht,  sideration  to  be  returned  ;  and  then  they 
38  Ala.  175  ;  Meaher  i*.  Cox,  37  Ala.  201.     treat  the  articles  as  a  nullity,  in   conse- 

^  Such  a  decree  will  not  be  entered  for  misconduct  of  a  partner  merely,  in  the 
absence  of  fraud.     Oteri  v.  Scalzo,  145  U.  S.  578. 


§  358.] 


OF   DISSOLUTION    BY   DECREE. 


455 


ever,  rare.     The  far  more  common  way  is  to  decree  a  dissolution 
of  the  partnership  for  causes  occurrin^^  after  its  formation.^ 

§  358.  Dissolution  for  Misconduct  of  Partner.  —  Causes  for  disso- 
hition  are  divisible  into  two  classes  :  those  which  imply  misconduct 
on  the  part  uf  one  or  more  partners,  and  those  which  do  not.  Of 
the  first  it  is  always  said,  that  any  misconduct  of  any  kind,  pro- 
vided it  be  such  in  its  character  and  intensity  as  to  expose  the 
other  partners  to  important  injury  of  any  kind,  will  be  considered 
a  sufficient  ground  for  dissolution.  (J)  But  it  is  also  frequently 
remarked,  that  this  is  a  grave  exercise  of  power,  and  will  not  be 
made  for  slight  reasons,  (^e}     Bad  temper,  overbearing  and  oi> 


qnence  of  the  fraud."  Howell  v.  Harvey, 
5  Ark.  278.  "  The  jurisdiction  of  a  court 
of  eijuity,  in  cases  of  eopartuership,  flow- 
ing from  the  peculiar  trusts  and  duties 
growing  out  of  that  connection,  is  of  the 
most  extensive  and  beneficial  character. 
It  often  declares  partnerships  utterly  void, 
in  eases  of  fraud,  imposition,  and  oppres- 
sion in  the  original  agreement."  And 
see  Ex  parte  Broome,  1  Rose,  69  ;  Ham- 
ilton V.  Stokes,  4  Price,  161,  Daniel,  20  ; 
Oldaker  v.  Lavender,  6  Sim,  239  ;  Green 
V.  Barrett,  1  Sim.  45  ;  Jones  v.  Yates, 
9  B.  &  C.  .532  ;  Colt  v.  Wollaston,  2  P. 
Wms.  154  ;  Fogg  &  Vanderslice  v.  John- 
ston, 27  Ala.  432.  Fraud  of  one  partner 
against  the  firm  is  a  good  ground  for  dis- 
solution before  the  expiration  of  the  term. 
Cottle  i;.  Leitch,  35  Cal.  434. 

(d)  In  Howell  v.  Harvej-,  5  Ark.  278, 
the  court  said  :  "  Habitual  drunkenness, 
great  extravagance,  or  unwarrantable  neg- 
ligence in  conducting  the  business  of  the 
partnership,  justifies  a  dissolution  ;  bnt 
then  it  must  be  a  strong  and  clear  case  of 
positive  or  meditated  abuse,  to  authorize 
such  a  decree.  For  minor  misconduct 
and  grievances,  if  they  require  redress, 
the  court  will  interfere  by  way  of  injunc- 
tion to  prevent  the  mischief.''  Baring 
V.  Dix,  1  Cox,  213;  Goodman  v.  Whit- 
comb,  I  Jac.  &  W.  574  note  ;  Waters  v. 
Taylor,  2  Ves.  &  B.  299 ;  Loscombe  v. 
Russell,  4  Sim.  8;  Gratz  v.  Bavard,  11 
S.  &  R.  41,  48  ;  Littlewood  v.  Caldwell, 
11  Price,  97,  99  ;  Marshall  v.  Coleman,  2 
Jac.  &  \V.  266  ;  Chapman  v.  Beach,  1  Jac. 


&  W.  594;  Xorway  v.  Rowe,  19  Ves. 
148.  But  misconduct  will  not  justify  a 
partner  in  treating  the  partnership  as 
ended  without  a  decree  and  proceeding  to 
take  exclusive  control  of  the  partnershi[) 
affairs.  Ambler  v.  Whipple,  20  Wall. 
546. 

{()  Acting  on  this  principle,  it  was 
held,  where  articles  of  partnership  pro- 
vided, that,  if  either  of  the  partners 
should  give  guaranties  without  consent, 
the  other  might  dissolve  on  giving  notice, 
and  one  of  the  partners,  in  the  course  of 
eight  years,  gave  a  guaranty  for  52/.,  and 
the  other  gave  notice  to  dissolve,  that  this 
alone  was  not,  in  equity,  a  sufficient 
ground  for  a  dissolution.  Anderson  v. 
Anderson,  25  Beav.  190.  And  in  Wray 
V.  Hutchinson,  2  Mylne  &  K.  238,  the 
Master  of  the  Rolls  observed,  that,  upon 
the  opening  of  the  pleadings,  he  had 
doubted  whether  the  jilaintiff  had  stated 
a  case  which  entitled  him  to  a  dissolution 
of  the  partnership  ;  for  although  a  part- 
nership would  be  dissolved  in  equity,  if  a 
defendant  had  substantially  failed  in  the 
jierformance  of  his  part  of  the  agreement, 
yet  it  was  not  the  office  of  a  court  of 
eipiity  to  enter  into  a  consideration  of 
mere  partnership  squabbles.  And  see 
Lord  Eldon,  in  Goodman  v.  Whitcomb.  1 
Jac.  &  W.  592  ;  Hem  v.  Walsh,  2  Edw. 
Cli.  129.  Rut  only  little  more  is  needed  ; 
and  dissolution  will  be  granted,  where 
dissension  ])revents  all  hope  of  advantage. 
Bi.>liop  V.  Rreckle.s,  1  Hoff.  Ch.  534  ; 
Seighortner  v.  Weissenborn,  20  N-  J.    Eq. 


1  Fraud  in  inducing  one  to  enter  into  a  partnership,  is  a  ground  for  dissolution. 
Kosensteiu  v.  Burns,  41  F.  R.  841. 


456 


THE   LAW   OF   PARTNERSHIP. 


[CH.    XIV. 


prcssivo  conduct,  quarrelling,  indolence,  and  inattention,  intem- 
perance, or  bad  habits,  and  disgraceful  conduct,  wild  speculation, 
gross  extravagance,  absenting  himself  from  his  business,  or  enter- 
ing into  other  business  engagements  inconsistent  with  his  duty  to 
his  partners,  or  any  conduct  which  brings  disgrace  upon  the  firm 
or  impairs  their  credit,  (/)  —  are  all  causes  which  may  be  suffi- 
cient, if  their  degree  be  sufficient ;  and  otherwise  not.  For  one 
instance  of  the  kind,  or  two,  or  three,  the  court  may  not  interfere, 
but  will  leave  the  parties  to  themselves,  and  hope  for  their  reform 
and  reconciliation.  Nor  will  the  decree  of  dissolution  be  pro- 
nounced merely  because  one  of  these,  or  similar  modes  of  miscon- 
duct, goes  so  far  as  to  expose  the  other  partners  to  some  inconve- 
nience, or  to  bring  discomfort  upon  them.  And  if  the  mischief 
complained  of  is  specific,  and  a  habit,  and  persisted  in,  the  court 


172.  A  decree  for  a  dissolution  will  be 
warranted,  if  it  is  impossible  that  the 
partnership  should  be  beneficially  contin- 
ued :  namely,  if  the  piinciples  on  which 
the  scheme  is  based  are  found,  on  exam- 
ination, to  be  erroneous  and  im])ractica- 
able,  Beaumont  v.  Meredith,  3  Ves.  & 
B.  180;  Clough  v.  Radclille,  1  De  G.  & 
S.  164  ;  or  where  the  partnership  is  formed 
to  effect  a  particular  object,  which  is 
found  to  be  impracticable,  and  wholly 
fails,  Nockells  v.  Crosby,  3  B.  &  C.  814, 
5  Dow.  &  E.  751  ;  Seighortner  v.  Weis- 
senborn,  20  N.  J.  Eq.  172  ;  or  where  the 
circumstances  have  so  changed  as  to 
render  it  impossible  to  carry  on  the  part- 
nership without  injury  to  all  the  partners, 
Harrison  v.  Tennant,  21  Reav.  482  ;  or 
where  the  object  of  a  partnership  is  de- 
stro}'ed,  as  a  steamboat,  Claiborne  v. 
Creditors,  18  La.  501  ;  or  if  one  partner 
excludes  or  claims  to  exclude  the  other 
from  his  jiroper  share  of  control  in  the 
business ;  or  if,  though  not  in  terms 
excluding  him,  he  is  .so  conducting  him- 
self, as  to  render  it  impossible  that  the 
business  should  be  conducted  on  the  stip- 
nlated  terms.  Goodman  v  "Whitcomb,  1 
Jac.  &  W.  569  ;  Hale  v.  Hale,  4  Beav, 
369  ;  Smith  v.  Jeyes,  4  Beav.  503  ; 
England  v.  Cowling,  8  Beav.  129  ;  Chap- 
man V.  Beach,  1  Jac.  &  W.  594 ;  JIarshall 
V.  Colman,  2  Jac.  &  W.  266  ;  Richards  v. 
Davies,  2  Russ.  &  M.  347.  See  also  Ken- 
nedy V.  Kennedy,  3  Dana,  239  ;  Gowan  v. 
Jefifries,    2  Ashm.  296  j  Maude  v.  Rodes, 


4  Dana,  144  ;  Story  v.  Moon,  8  Dana, 
331  ;  Garretson  v.  Weaver,  3  Edw.  Ch. 
385.  In  determining  whether  the  court 
will  decree  a  dissolution,  it  will  consider 
the  state  of  the  partnership  business  and 
the  probable  effect  of  a  decree  thereon. 
Richards  i:  Baurman,  65  N.  C.  162.  See 
also  Popper  v.  Scheider,  7  Abb.  Pr.  N.  s. 
56.  And,  on  a  decree  for  dissolution, 
equity  will  make  such  an  order  as  to 
render  the  decree  effective  ;  namely,  by 
ordering  a  defendant,  in  England,  to  sign 
a  notice  of  dissolution  in  "The  London 
Gazette."  Troughton  v.  Hunter,  18  Beav. 
470. 

(/)  Norway  v.  Rowe,  19  Ves.  148; 
Waters  v.  Taylor,  2  Ves.  &  B.  304  ; 
Howell  V.  Harvey,  5  Ark.  278  ;  Master 
V.  Kirton,  3  Ves.  74 ;  De  Berenger  v. 
Hammell,  7  Jarm.  Conv.  26  ;  Gow  on 
Part.  (3d  edit.)  227  ;  Wilson  v.  Green- 
wood, 1  Swanst.  481  ;  Blakeney  v.  Dufaur, 
15  Beav.  40  ;  Hall  v.  Hall,  12  Beav.  414, 
and  note  to  419  ;  Williamson  v.  Wilson, 
1  Bland,  418  ;  Fogg  &  Vanderslice  v. 
Johnson,  27  Ala.  432  ;  Durbin  v.  Barber, 
14  Ohio,  311  ;  Loomis  v.  McKennie,  31 
Iowa,  425.  Excluding  one  elected  trustee 
in  an  unincorporated  company  may  be  good 
ground  for  a  decree  dissolving  the  part- 
nership. Berry  v.  Cross,  3  Sandf.  Ch.  1. 
Or  excluding  a  joint  stockholder  from  his 
right  to  participate  in  the  management 
of  the  partnership  concerns.  Werner  v. 
Leisen,  31  Wis.  169. 


§  359.]  OF   DISSOLUTION   BY   DECREE.  457 

may  see  that  injunction  will  answer  as  well  as  dissolution ;  and 
this  is  to  be  preferred,  because  it  is  a  less  violent  remedy,  {g)  ^ 

§  359.  Dissolution  where  Continuance  Injurious.  —  Such  is  the 
general  language  of  courts  and  text-writers.  But  behind  all  this 
lies  the  general  question,  whether  a  court  of  equity  would  insist 
upon  binding  together,  in  this  relation,  two  or  more  parties,  one 
of  whom  distinctly  desired  a  separation,  and  this  for  grounds  ori- 
ginating in  any  kind  of  misconduct  of  the  others.  No  application 
for  dissolution  by  a  court  is,  of  course,  made  where  either  partner 
may  dissolve  it  at  his  pleasure  :  none,  therefore,  is  made,  unless 
there  is  a  valid  contract  of  partnership  to  last  for  a  time  certain. 
And,  in  any  such  case,  we  cannot  but  think  the  practical  rule  in 
this  country  would  be  to  permit  the  parties  to  separate,  provided 
it  were  obvious  that  harmonious  and  profitable  co-operation  was 
not  to  be  expected  ;  and  especially  if  this  were  made  impossible 
by  the  fault  of  one  partner,  and  the  other  desired  the  dissolution. 
The  cases  cited  in  our  notes  will  show  that  carelessness  and  waste 
in  the  business  of  the  partnership,  the  non-entry  in  the  books  of 
money  received,  the  exclusion  of  the  partners  plaintiff  from  an 
inspection  of  the  books  and  accounts,  or  from  their  due  share  of 
influence  and  power  in  the  concerns  of  the  firm,  and  permission 
of  a  partner  in  a  banking-house  to  a  customer  to  overdraw,  coupled 
with  the  taking  security  therefor  to  himself  personally,  —  have 
all  been  declared  sufficient  causes  for  dissolution,  {h)  And  it  has 
been  said,  that  where  the  affairs  of  a  partnership  are  rightly  before 
the  court,  and  it  appears  that  these  causes  for  dissolution  exist, 

(g)  Howell  v.  Harvey,  5  Ark.  279  ;  tnge,  4  Madd.  143 ;  Goodman  v.  Whit- 
Taylor  v.  Davis,  3  Beav.  388,  note  (e)  ;  comb,  1  Jac.  &  W.  689  ;  Marshall  v. 
Baring  v.  Dix,  1  Cox,  213 ;  Hall  v.  Colman,  2  Jac.  &  W.  266 ;  Richards  v. 
Hall,  12  Beav.  414.  In  the  matter  of  Davies,  2  Russ.  &  M.  347  ;  Smith  t'.  Jeyes, 
dissolution,  courts  will  exercise  a  wide  4  Beav.  503  ;  Wallworth  v.  Holt,  4  Mylne 
discretion,  and  will  not  act  upon  slight  &  C.  635  ;  Fairthorne  v.  Weston,  3  Hare, 
grounds  ;  dissension  may  in  some  cases  be  387  ;  Richardson  r.  Hastings,  7  Beav.  325  ; 
a  suthcient  ground.  Slemmer's  Appeal,  Bailey  v.  Ford,  13  Sim.  495  ;  Carlen  v. 
58  Pa.  168.  Bat  see  note  to  Hall  v.  Hall,  Drury,  1  Ves.  &  B.  158.  Equity  will 
12  Beav.  414,  at  p.  419,  in  which  the  not  interfere  to  decree  the  specific  execu- 
decision  was  reversed,  on  the  ground  that  tion  of  an  agreement  for  a  partnership,  as 
the  bill  did  not  seek  a  dissolution  of  the  it  might  be  dissolved  immediately  after- 
partnership.  See  also,  as  to  this,  Oliver  wards.  Henry  v.  Birch,  9  Ves.  357. 
V,  Hamilton,  2  Anst.  453  ;  Waters  v.  [h)  See  cases  cited  in  preceding  notes. 
Taylor,   15   Ves.   10  ;  Harrison    v.   Armi- 

1  Equity  will  decree  a  dissolution  for  the  misconduct  of  a  partner.  Oteri  v.  Scalzo, 
145  U.  S.  578.  As  where  a  partner  persistently  violates  the  articles.  Rosenstein  v. 
Burns,  41  F.  R.  841.  So  where  he  excludes  his  copartner  from  participation  in  the 
business.     Groth  v.  Payment,  79  Mich.  290,  44  N.  W.  611. 


458  THE   LAW   OF   PARTNERSHIP.  [CH.    XIV. 

and  in  a  degree  to  make  the  partnership  injurious  to  innocent  per- 
sons, the  court  will  decree  dissolution,  even  although  that  relief 
has  not  been  specifically  prayed  for.  (^) 

§  3G0.  Inability  to  perform  Agreements.  —  So,  pecuniary  inability 
to  fulfil  material  cngageinonts  with  the  other  partners,  whether  it 
were  the  fault  or  the  misfortune  of  the  partner,  would  be  deemed 
a  sufficient  cause.  As,  if  the  partnership  rested  either  expressly 
or  by  implication,  and  substantially,  upon  the  agreemeut  of  one  of 
the  partners  to  contribute  at  any  certain  time,  or  under  certain 
circumstances,  a  certain  amount  to  the  funds  of  the  partnership, 
or  to  pay  certain  debts,  or  make  certain  purchases  for  the  firm, 
and  he  fails  to  perform  this  promise,  through  pecuniary  inability, 
it  would  be  a  sufficient  cause  for  dissolution,  (m)  So,  if  he  werj 
unable  to  do  his  duty  to  the  firm,  by  disease,  not  in  its  nature 
temporary,  but  likely  to  continue  for  a  long  time,  if  it  be  not  incur- 
able,—  as  by  palsy,  for  example  ;  or  if  he  permanently  loses  health 
or  strength  in  any  way,  or  his  skill,  or  makes  it  apparent  that  he 
does  not  possess  the  skill  which  is  needed  for  the  proper  execution 
of  the  work  he  undertakes  to  do,  —  any  cause  of  this  kind  would 
be  sufficient,  (o) 

§  361.  Insanity.  — Insanity,  of  course,  would  be  among  the 
strongest  grounds  for  decreeing  dissolution,  especially  as  the  in- 
sane partner  could  not  of  himself  agree  to  the  dissolution,  how- 

(i)   Loscombe   v.   Russell,  4    Sim.    11.  has  been  contracted  between  two  persons. 

But  see  Hall  v.  Hall,  12  Beav.  414,  419  n.  founded  on  the  contribution  of  capital  by 

(»)  Turnipseed    v.    Goodwin,    9    Ala.  the  one,  and  of  personal  labor  and  skill  by 

372.     This  case  holds  that,  a  partnership  the  other,  and  the  latter  should  become 

being  formed  for  the  purpose  of   buying  disabled  by  the  palsy  to  afford  either  the 

and  selling  lands,  each  partner  to  furnish  labor  or  skill,  the  partnership  would  be 

an  equal  share  of  money,  if  one  should  dissolved,    because  the  object  of  it  could 

refuse  to  make  the  necessary  advances,  it  not  be  fulfilled.     Traite  du  Con.  de  Soc, 

•would  be  good  cause  for  putting  an  end  to  Kos.  142,  152  ;  2  Bell's  Comm.  634,  635  ; 

the  partnership  ;  but,  as  long  as  the  part-  3  Kent's  Comm.  (9th  ed.)  71;    Story  on 

nership  subsisted,  a  larger  advance  by  one  Part.  §§  291-294.     In  Sayer  v.  Bennet,  1 

partner   than   it   was   his   duty   to   make  Cox,   107,   109,   Lord  Kenyon   said:     "I 

would   be   compensated  by  allowing  him  think,  indeed,  it  may  be  laid  down  as  a 

interest  on  such  excess,  or  it  might  fur-  general  rule  (without  considering  the  par- 

nish  a  cause  of  action  for  a  breach  of  the  ticular   circumstances   of   the  case),   that 

articles   of    copartnership.      See   also,    on  where  partners  are  to  contribute  skill  and 

this  point,    Boyd  v.  Mynatt,   4  Ala.  79.  industry,  as  well  as  capital,  if  one  ]>artner 

The  same  result  would  arise  if  one  of  the  becomes  unable  to  contribute  that  .skill,  a 

partners  had  lost  his  capacity  to  act  sui  court  of  equity  ought  to  interfere  for  both 

juris,  by  conviction  and  attainder  of  trea-  their  sakes."     Jones  v.  Noy,  2  Mylne  & 

son,  or  by  ab.sconding  for  debt  or  crime  or  K.  125, 129,  130  ;  Wrexham  v.  Hudlestou, 

felony,  or  any  state-prison  offence.    Whit-  1  Swanst.  514,  note  ;    Waters  v.  Taylor,  2 

man  v.  Leonard,  3  Pick.  117.     See  Hunt  Ves.  &  B.   299  ;    Wray  v.  Hutchinson,  2 

t;.  Clark,  6  De  G.  M.  &  G.  232.  Mylne  &  K.  235,  238. 
(oj  Pothier  says,  that  if  a  partnership 


§  362.]  OF   DISSOLUTION    BY   DECREE.  459 

ever  desirable  for  himself.  And  here,  undoubtedly,  a  decree  of 
dissolution  would  be  granted  upon  the  petition  of  those  having 
charge  of  the  insane  person  and  his  property,  even,  perhaps, 
without  any  cause  additional  to  tlie  fact  of  insanity,  (jt?)  One 
qualification  belongs  to  this  cause,  as  it  does  to  most  of  those 
which  have  been  mentioned :  it  is  that  of  degree.  Of  course, 
delirium  from  fever,  or  from  a  blow  on  the  head,  lasting  a  short 
time  and  passing  entirely  away,  would  not  be  sufficient  cause. 
But,  while  there  can  be  no  specific  rule  as  to  the  measure  of  in- 
sanity which  will  determine  its  sufficiency  as  a  cause  for  the  dis- 
solution of  partnership,  equity  would  decide  such  a  question  by  a 
reference  to  the  universal  standard  which  determines  all  ques- 
tions of  this  kind:  Is  the  insanity  such,  in  cause,  character,  and 
degree,  as  to  incapacitate  the  partner  from  a  reasonable  perform- 
ance of  his  duty  now,  and  to  take  away  all  reasonable  hope  of  his 
so  performing  it  within  a  reasonable  time  ?  {q)  ^ 

§  362.  Insanity  does  not  Operate  of  itself  to  Dissolve. — There 
is  one  other  question,  which,  although  it  bears  somewhat  on  tlie 
other  causes  enumerated,  is  far  more  important  in  its  reference  to 
insanity;  and  that  is,  whether  the  insanity  —  supposing  it  to  be 
certain,  complete,  and  incurable  —  of  itself  terminates  the  partner- 
ship, or  is  only  good  cause  for  a  decree  of  dissolution,  (r)     The 

(p)  A  leading  case  on  this  point  is  Langdale,  Ld.  Ch.,  in  giving  judgment  in 
Sayer  v.  Bennet,  1  Cox,  108.  Lord  this  last  case.  See  also  Crawshay  v. 
Eldon  refers  to  this  case  in  deciding  that  Maule,  1  Swaust.  514,  note, 
a  dissolution  of  partnership,  on  the  lunacy  (r)  This  is  the  precise  question  decided 
of  a  partner,  is  to  be  obtained  only  by  in  Jones  );.  Xoy,  2  Mylne  &  K.  125.  The 
decree,  and  not  by  the  act  of  the  surviv-  Master  of  the  Rolls  said  :  "  It  is  clear, 
ors,  nor  as  long  as  they  carry  on  business  upon  principle,  that  the  complete  incapa- 
with  his  capital.  He  says  :  "  It  was  city  of  a  party  to  an  agreement  to  perform 
supposed  that  I  had  contradicted  Lord  that  which  was  a  condition  of  the  agree- 
Kenyou's  doctrine  in  Sayer  v.  Bennet.  ment  is  a  ground  for  determining  the  con- 
Certainly  I  did  not  contradict  that  doc-  tract.  The  insanity  of  a  partner  is  a 
trine  ;  nor  did  I  make  any  decree  which,  ground  for  the  dissolution  of  the  partner- 
duly  considered,  was  an  assent  to  it."  ship,  because  it  is  immediate  incapacity; 
Waters  v.  Taylor,  2  Ves  &  B.  303.  See  but  it  may  not,  in  the  result,  prove  to  be 
also  Kirby  v.  Carr,  3  Y.  &  C.  184  ;  The  a  gi'ound  of  dissolution,  for  the  partner 
Cape  Sable  Co.'s  Case,  3  Bland,  606-674  ;  may  recover  from  his  malady.  When  a 
Griswold  v.  Waddington,  15  Johns.  57  ;  partner,  therefore,  is  affected  with  insan- 
Leaf  V.  Coles,  1  De  G.  M.  &  G.  171  ;  ity,  the  continuing  partner  may,  if  he 
Sadler  v.  Lee,  6  Beav.  324  ;  Jones  v.  Noy,  think  fit,  make  it  a  ground  of  dissolution  ; 
2  Mylne  &  K.  125  ;  Wrexham  v.  Hudle-  but,  in  that  case,  I  consider  with  Lord 
ston,  1  Swanst.  514,  note.  Kenyon,  that,  in  order  to  make  it  a  ground 

(q)  Pearce  v.  Chamberlain,  2  Ves.  33  ;  of  dissolution,  he  must  obtain  a  decree  of 

Sayer  v.   Bennet,  1  Cox,  107  ;    Sadler  v.  the  court.     If  he  does  not  apjtly  to  the 

Lee,  6   Beav.    324.     See   the  remarks  of  court  for  a  decree  of  dissolution,  it  is  to  be 

1  Raymond  c.  Vauglin,  128  111.  256,  21  N.  E.  566. 


460 


THE   LAW   OF   PARTNERSHIP. 


[CH.    XIV. 


question  might  come  up  iu  this  form :  A  partner  is  taken  to-day 
with  an  insanity,  which  is  soon  found  to  be  hopeless  and  entire. 
Next  week,  or  month,  before  lawfully  appointed  guardians  have 
obtained,  or  could  have  obtained,  a  decree  of  dissolution,  his 
partners,  because  they  arc  deprived  of  his  sagacity  or  relieved 
from  his  control,  rush  into  mad  or  even  fraudulent  speculations, 
and  not  only  lose  all  the  property  of  the  firm,  but  bring  upon  it 
an  insolvency  which  it  will  require  all  the  insane  man's  private 
property  to  pay.  He  is  not  liable  for  these  debts,  if  his  insanity 
terminated  the  partnership ;  and,  we  should  say,  he  would  not 
then  be  liable  even,  without  notice,  (s)  on  the  same  grounds  on 
which  notice  is  not  needed  where  the  dissolution  is  by  death. 
But,  if  his  insanity  did  not  terminate  his  partnership,  he  and  his 
property  are  liable  to  all  innocent  parties  for  all  debts  contracted 
before  the  decree. 

This  question  has  been  somewhat  considered.  There  are  not 
wanting  strong  reasons  and  high  authority  for  the  conclusion, 
that  insanity,  certain,  complete  and  hopeless,  of  itself  and  at 
once  dissolves  the  partnership.  (^)  But,  we  think,  the  decided 
weight  of  authority,  in  England  and  in  this  country,  opposes  this 


considered  tliat  he  is  willing  to  wait  to 
see  whether  the  incapacity  of  his  partner 
may  not  prove  merely  temporary.  If  he 
carry  on  the  partnership  business  in  the 
expectation  that  his  partner  may  recover 
from  his  insanity,  so  long  as  he  continues 
the  business  with  that  expectation  or  hope 
tliere  can  be  no  dissolution."  See  also 
Kirby  v.  Carr,  3  Y.  &  C.  184  ;  Besch  v. 
Frolich,  1  Phillips  Ch.  172,  7  Jur.  73  ; 
Sander  v.  Sander,  2  Collyer,  276.  Besch 
V.  Frolich  holds  that,  on  a  bill  to  dissolve 
a  partnership  on  the  ground  of  the  lunacy 
of  a  partner,  the  court  will  not  make  its 
decree  retrospective  even  to  the  filing  of 
the  bill  ;  still  less  to  the  time  when  the 
defendant  first  became  incapable  of  attend- 
ing to  business. 

(s)  In  reference  to  the  effect  of  a  notice 
of  dissolution  to  an  insane  partner,  it  has 
been  held,  that  such  a  notice  is  sufficient 
to  put  an  end  to  a  partnership.  Mellersh 
V.  Keen,  27  Beav.  236  ;  Robertson  v. 
Lockie,  10  Jur.  533  ;  Bagshaw  v.  Parker, 
10  Beav.  532. 

(t)  C.  J.  Parker,  in  Davis  v.  Lane,  10 
N.  H.  161,  says:  "It  has  been  held,  in 
England,  that  the  insanity  of  one  partner 
does  not  operate  as  a  dissolution  of  the 


])artnershlp  ;  but  that  object  must  be  at- 
tained through  a  court  of  ecjuity.  But 
the  soundness  of  this  princi[ile  may,  per- 
haps, be  doubted.  It  certainly  could  not 
have  been  applied  here  prior  to  1832,  as 
we  had  before  that  time  no  court  through 
whose  decree  in  equity  a  dissolution  could 
have  been  effected.  Admitting  it  to  be 
correct  in  its  fullest  extent,  however,  it 
would  not  affect  this  case  (a  question  of 
the  agency  of  a  wife  during  the  senseless 
state  of  her  husband);  for  each  partner 
has  an  interest,  by  the  partnership  con- 
tract, and  the  interest  of  one  partner 
would  not  be  terminated  by  the  insanity  of 
another.  In  making  a  sale  or  contract,  he 
does  not  act  as  agent,  but  in  his  own  riglit; 
and  the  partnership  name  mny  be  used  by 
one,  without  any  supposition  that  another 
acts  individually,  or  has  any  knowledge 
or  volition  in  relation  to  the  matter.  But, 
so  long  as  the  partneishi[)  continues,  tiie 
act  of  one  binds  the  others  ;  and  as  it  is, 
in  its  effect,  the  act  of  all  the  jjartners,  it 
may  deserve  great  consideration,  whether 
the  insanity  of  one,  in  the  absence  of  any 
stipulation  to  the  contrary,  does  not  opei- 
ate  ipso  facto  as  a  dissolution  of  the  part- 
nership itself." 


§  364.]  OF    DISSOLUTION    BY    DECREE.  461 

conclusion,  and  holds  that  the  partnership  continues  until  it  is 
dissolved  by  decree,  (m) 

§  363.  Judicial  Determination  of  Insanity.  —  There  is  one  ex- 
ception which  the  courts  might  allow.  If  the  insanity  were 
determined  by  due  inquest,  under  process  of  law,  and  due  public 
notice  were  given,  this  might  be  held  to  operate  a  dissolution  as 
effectually  as  death,  and  with  many  of  the  incidents  of  a  dissolu- 
tion by  death.  It  is  true  that,  in  such  case,  in  this  country,  a 
guardian  would  probably  be  at  once  appointed  ;  and  this  appoint- 
ment would,  as  we  have  seen,  effect  a  dissolution.  We  think, 
however,  that  a  legal  finding  and  declaration  of  insanity  might 
have  this  effect.  It  may  be  well,  also,  to  remark,  that,  in  a  case 
of  insanity,  when  the  appointment  of  guardians  would  cause 
much  delay,  we  have  no  doubt  a  court  of  equity  would  receive  a 
petition  from  any  proper  person  acting  as  the  next  friend  of  the 
insane,  and,  upon  cause  shown,  issue  summarily  a  decree  of  dis- 
solution. A  verdict  of  an  inquisition  of  lunacy  should  not,  how- 
ever, have  any  retrospective  influence  by  relation,  and  affect  any 
honest  transaction  which  took  place  previous  to  the  verdict,  (v) 

§  364.  Business  Success  becoming  Impracticable.  —  Besides 
these  causes,  it  is  possible  that  the  continuance  of  a  partnership 
may  become  impracticable  for  any  honest  purpose,  by  something 
in  the  nature  or  the  condition  of  the  business  for  which  it  was 
formed.  As  if  to  carry  on  a  cotton  manufactory,  and  the  build- 
ings are  burned  down,  and  the  partners  have  no  means  to  build 
others  ;  or  to  carry  on  mining,  and  it  can  be  shown  that  the  busi- 
ness is  disastrous  and  wasteful,  and  that  only  reckless  and 
improvident  persons  could  pursue  it.  We  have  seen  that  such 
circumstances  might,  at  once,  dissolve  the  partnership.  If  they 
had  not  this  effect,  equity  would  certainly  give  the  proper  relief 

(u)  See  cases  cited  in  preceding  notes.  and  so  it  was  held  by  the  circuit  judge,  and, 
(f)  In  Isler  v.  Baker,  6  Humph.  85,  as-  we  think,  correctly  ;  for,  both  upon 
the  court  held  that  an  inquisition  of  lun-  principle  and  authority,  the  inquisition  of 
acy  found  against  a  member  of  a  partner-  lunacy,  as  found,  did  dissolve  the  partner- 
ship dissolves  ipso  facto  the  partnership,  ship,  t/jso  fado,  and  H.  H.  Bryan,  at  the 
Turley,  J.,  in  delivering  the  opinion  of  time  he  executed  the  note,  could  only 
the  court,  said:  "Upon  the  trial,  it  was  bind  himself  thereby."  In  Milne  v.  Bart- 
contended  for  Isler,  the  administrator  of  let,  3  Jur.  358,  it  was  held,  that  a  com- 
Joseph  H.  Bryan,  that  the  partnership  pre-  mission  of  lunacy  finding  the  fact  of 
viously  existing  between  him  and  Henry  insanity  was  sufficient  evidence  to  justify 
H.  Bryan  was  dissolved  by  the  commis-  a  decree  for  dissolution,  without  a  refer- 
sion  of  lunacy  found  against  Joseph  H.  encetothe  master  for  an  inquiry.  As  to 
Bryan  ;  and  that,  therefore,  Henry  H.  the  retrospective  effect  of  a  decree  of  dis- 
Bryan  had  no  power  or  authority  to  bind  solution  for  insanity,  see  Besch  v.  f  rolich 
him  by  the  note  executed  as  before  stated,  cited  ante,  note  (r). 


462  THE   LAW   OF   PARTNERSHIP.  [CH.    XIV. 

to  any  partners  who  would  otherwise  be  bound  by  their  contract 
to  continue  in  a  business  which  could  only  destroy  their  remain- 
ing means,  or  had  become  an  entirely  different  thing  from  that 
whicli  they  had  contemplated,  (w)  ^ 

§  365.  Arbitration.  —  We  doubt  whether  a  dissolution  can  be 
said  to  be  made  by  an  award  of  arbitrators  to  that  effect,  even 
where  the  award  is  wholly  unobjectionable.  Perhaps  partners 
would  seldom  refuse,  except  on  grounds  which  would  justify 
setting  aside  any  other  award.  And,  if  they  did  so  refuse, 
equity  would  probably  deem  such  an  award  as  a  cause  for  decree 
of  dissolution  which  was  entitled  to  much  consideration.  But 
still  it  must  be  the  acceptance  of  the  award  by  the  parties,  and 
carrying  it  into  effect,  or  a  decree  carrying  it  into  effect,  which 
operates  the  dissolution,  and  not  the  award  itself.  We  have  seen 
that  equity,  as  well  as  law,  would  be  reluctant  to  enforce  an 
agreement  to  refer  this  or  any  other  question  to  arbitrators  ;  and 
for  the  reason  that  it  dislikes  to  oust  itself  of  its  proper  jurisdic- 
tion. "  This  court,"  said  Lord  Eldon,  "  is  as  likely  to  decide  aright 
as  any  arbitrators."  But  as  the  law  holds  parties  to  any  award 
made  upon  questions  actually  and  properly  submitted,  and  open 
to  no  objection  from  insufficiency  of  power,  or  erroneous  exercise 
of  power  on  the  part  of  the  arbitrators,  so  would  equity  ;  and, 
therefore,  we  think  it  would  compel  a  dissolution  so  awarded,  {x) 

{w)  Baring  v.  Dix,  1  Cox,  213;   Clai-  Street  v.   Rigby,   6  Ves.   815  ;    Heath  v. 

borne   v.  Creditors,   18   La.   501  ;    Beau-  Sansoin,  4  B.  &  Ad.  172  ;    Maley  v.  New- 

mont    i;.    Meredith,    3   Ves.    &    B.    180  ;  man,   5    Dow.    &  R.    317 ;    Byers  v.  Van 

Clough  V.  Radcliffe,  1   De  G.  &  S.   164  ;  Deusen,  5  Wend.  268  ;  Rolle  Arbitr.  b.  2 ; 

Nockels  V.  Crosby,  3  B.  &  C.  814,  5  Dow.  3  Vin.  Abr.  42.      If  an  arbitrator  be  ap- 

&  R.  751  ;  Harrison  v.  Tennant,  21  Beav.  pointed    to    arbitrate  a   certain    measure 

182.  contemplated    between    two   parties   as    a 

(x)  The  leading  case  on  the  power  of  dissolution  of  partnership,  he  is  not  ne- 
ftrbitrators  to  dissolve  a  pai'tnership  when  cessarily  bound  to  direct  that  the  partner- 
til  matters  in  difference  are  referred,  is  ship  shall  be  dissolved.  Simmons  v. 
fireen  v.  Waring,  1  W.  Bl.  475.     See  also  Swaine,  1  Taunt.  549. 

1  Where  it  has  become  evident  that  the  partnership  cannot  be  continued  without 
great  loss,  equity  will  decree  a  dissolution.  Rosenstein  v.  Burns,  41  F.  R.  841  ;  Hol- 
laday  v.  Elliott,  8  Ore.  84. 


3673 


OP   BANKRUPTCY   AND   INSOLVENCY. 


463 


CHAPTER  XY. 

OP   BANKRUPTCY    AND    INSOLVENCY. 

SECTION   I. 

WHEN    AND    HOW    A    BANKRUPTCY   DISSOLVES   A    PARTNERSHIP. 

§  366.  Dissolution  upon  Bankruptcy.  —  It  is  a  wcll-established 
rule  of  law  and  of  equity,  that  Bankruptcy  or  Insolvency,  mean- 
ing hereby  legal  and  technical  bankruptcy  or  insolvency,  whether 
of  one  partner  or  of  the  Wrm  per  se,  operates  a  dissolution  of  the 
partnership,  (a) 

§  867.  Time  of  Dissolution.  —  A  question  exists,  however,  as 
to  the  time  when  a  dissolution  from  this  cause  takes  place.  In 
England,  it  seems  now  well  settled,  that  the  dissolution  does  not 
take  place  until  it  is  formally  declared  by  competent  authority ; 
but  then  it  goes  back  in  its  effect,  by  relation,  to  the  time  when 
an  act  of  bankruptcy  was  committed,  (b)  We  should  say,  that 
the  dissolution  took  place  as  soon  as  the  assets  were  vested  in 


{a)  Fox  V.  Hanbury,  Cowp.  445  ;  Ex 
parte  Smith,  5  Ves.  295  ;  Wilson  v. 
Greenwood,  1  Swanst.  471  ;  Ciavvshay  v. 
Collins,  15  Ves.  217  ;  Marquand  v.  New 
York  Manuf.  Co.,  17  Jolius.  525  ;  Gris- 
wold  f.  Waddington,  16  Johns.  436,  491  ; 
Williamson  v.  Wilson,  1  Bland,  418 ; 
Gowan  v.  JeH'iies,  2  Ashm.  296  ;  Smith  v. 
De  Silva,  Cowp.  471  ;  Ex  parte  Ruffin,  6 
Ves.  126  ;  Crawshay  v.  Maule,  1  Swanst. 
507,  note  ;  Wilkins  v.  Davis,  15  N.  B.  R. 
460,  Lowell,  J.  ;  Halsey  v.  Norton,  45 
Miss.  703.  One  who  permits  himself  to 
be  held  out  as  a  partner  may  be  made  a 
bankrupt,  as  a  member  of  the  firm,  at  the 
suit  of  a  creditor.  Re  Krueger,  2  Low. 
66;  Re  Disideri,  L.  R.  11  Eq.  242;  Ee 
Rowland,  L.  R.  1  Ch.  421  ;  Campbell  v. 
Hastings,  29  Ark.  512  ;  Carmichael  o. 
Greer,  55  Ga.  116.  An  insolvent  member 
of  a  dissolved  firm,  who  had  given  a  bond 
with  a  solvent  surety  to  his  former  copart- 
ners to  pay  the  debts  of  the  firm,  cannot 


petition  his  late  copartners  (the  latter 
being  solvent)  into  bankruptcy.  Re  Beu» 
nett,  2  Low.  400.  A  person  who  is  part- 
ner in  two  firms  may  be  adjudged  bankrupt 
with  each  firm.  /?ire  Jewett,  15  N  B.  R. 
126.  A  petition  of  one  member  of  a  firm 
to  have  the  firm  declared  bankrupt  is  no 
bar,  before  adjudication,  to  a  suit  by  one 
of  the  partners  on  a  claim  due  him  indi- 
vidually. Booth  V.  Meyer,  14  N.  B.  R. 
575.  When  all  the  members  of  one  firm 
are  partners  in  another  firm,  they  cannot 
prove  its  debt  against  the  latter.  In  re 
Savage,  16  N.  B.  R.    368. 

(h)  Fox  V.  Hanbury,  Cowp.  445  ; 
Hague  V.  Rolleston,  4  Burr.  2174  ;  Ec 
parte  Smith,  5  Ves.  295  ;  Harvey  n.  Crick- 
ett,  5  M.  &  S.  336  ;  Dutton  v.  Morrison, 
17  Ves.  194  ;  Barker  v.  Goodair,  11  Ves. 
78  ;  Thomason  v.  Frere,  10  East,  418  ; 
Siegel  V.  Chidsey,  28  Pa.  287  ;  Smith  v. 
Stokes,  1  East,  364. 


464  THE    LAW   OF   PARTNERSHIP.  [CH.    XV. 

the  assignee,  with  perhaps  a  retrospective  effect,  carrying  back  the 
dissolution  to  the  time  of  the  filing  of  the  petition  of  bankruptcy, 
or  possibly  only  to  the  issuing  of  the  warrant,  (c) 

§  868.  Reason  of  Dissolution  upon  Bankruptcy.  — That  the  cause 
why  bankruptcy  operates  dissolution,  is  its  taking  all  interest  and 
property  in  the  partnership  stock  out  of  the  bankrupt's  hands, 
seems  to  be  clear.  Whatever  has  this  effect  causes  a  dissolution. 
Thus,  if  there  be  a  prayer  for  an  account  and  a  receiver,  the 
appointment  of  a  receiver  operates  a  dissolution,  if  he  takes  all 
the  property  into  his  own  hands  and  possession ;  so  that,  after 
such  appointment,  the  power  of  giving  preferences  among  the 
creditors  is  gone,  ((i)  But  if  he  is  appointed  rather  as  a  man- 
ager or  overseer,  leaving  the  property  where  it  stood  before,  we 
should  doubt  whether  it  would  have  the  effect  of  a  dissolution. 
How  far  it  would  control  or  restrain  the  power  of  disposing  of 
the  effects  would  probably  depend  upon  the  terms  of  the  decree. 
Moreover,  it  was  distinctly  held,  where  there  were  no  statutes  of 
insolvency,  properly  so  called,  that  actual  insolvency,  or  inability 
and  refusal  to  pay  debts,  does  not  operate  a  dissolution  ;  and  the 
reas(m  assigned  is,  that  it  does  not  of  itself  transfer  the  property 
of  the  insolvent  to  assignees.  And,  even  in  England,  absconding 
is  held  not  to  operate  a  dissolution,  although  a  very  strong  act  of 
bankruptcy,  on  which  a  sequestration  may  be  founded,  which 
shall  go  back  by  relation  to  the  absconding,  (e) 

(c)  Morton,  J.,  in  Arnold  v.  Brown,  24  (d)  Egberts   v.  Wood,   3  Paige,    517. 

Pick.  93,  held  that  "  the  insolvency  of  one  The  receiver  is  entitled  to  the  possession  of 

or  both  partners,  we  think,  would  not  pro-  the  books  of  the  firm.     Succession  of  An- 

duce  this  effect.     The  insolvency  of  one  drew,  16  La.  Ann.   197. 

might  furnish  to  the  other  sufficient  ground  (c)  Morton,  J.,  in  Arnold  y.  Brown,  24 

for  declaring  a  dissolution.     But,  in   this  Pick.  94,  said  :  "  In  England,  the  abscond- 

State,  the  inability  to  pay  the  company  or  ing  would  be  an  act  of  bankruptcy;  and  the 

the  private  debts  of  the  partners  would  not  bankruptcy,  when  determined  by  regular 

per  se  operate  as  a  dissolution."     In  Eng-  adjudication,  would  create  a  dissolution, 

land,    bankruptcy,   and   in   some    of   our  But  the  absconding  is  never  relied  on  as  a 

States   where  insolvent   laws   exist,  legal  dissolution."  And  it  was  held, in  accordance 

insolvency    may    produce    a    dissolution,  with  the  above,  that  the  absconding  of  one 

Wherever  the  one  or  the  other  operates  to  of  the  partners  of  a  firm  will  not  produce 

vest  the  bankrupt's  or  insolvent's  property  a  dissolution  in  this  country  ;  overruling 

in  assignees  or  other  ministers  of  the  law,  Whitman  v.  Leonard,  3  Pick.  179,  on  this 

it  would  produce  that  effect.     Probably  a  point.     And  see  Ex  parte  Smith,  5  Ves. 

voluntary  assignment  by  a  partner,  of  all  295  ;  Hilliard  on  Bankruptcy,  §  17  ;  Fox 

his  property,  would  do  the  same.    In  Penu-  v.  Hanbury,  Cowp.  445  ;  Crispe  r.  Perritt, 

sylvania,  it  is  held,  that  simple  insolvency,  Willes,  467,  1  Atk.  133  ;  Hague  i'.  Rolles- 

without  an  assignment  or  any  judicial  pro-  ton,    4  Burr.   2174;    Smith   v.   Stokes,  1 

cess,   does  not  work  a  dissolution  of  the  East,  363  ;    Smith  v,  Oriell,   1  East,  368 ; 

partnership,    nor   divest   the    partners   of  ^j:  ^ja/Ye  Williams,   11  Ves   5;  Wilson  v. 

their  dominion  over  the  partnership  prop-  Greenwood,    1    Swanst.    482  ;    Harvey   v. 

erty.     Siegel  t;.  Chidsey,  28  Pa.  237.  Crickett,  5  M.  &  S.  336  ;  Barker  v  Good- 


§  370.]  OF   BxXNKRUPTCY   AND   INSOLVENCY.  465 

§  3G9.  Analogy  between  Bankruptcy  and  Death.  —  Formal  and 
complete  bankruptcy  acts  upon  a  partnership  in  many  respects 
like  death.  (/)  If  it  be  the  bankruptcy  of  the  firm,  it  is  like 
the  death  of  all  the  partners.  If  the  bankruptcy  of  one  partner, 
it  is  like  his  death.  And  we  should  expect  this  result  upon  a 
mercantile  partnership,  because  bankruptcy  is  the  death  of  the 
bankrupt  as  a  merchant.  If  discharged,  he  may  begin  again,  free 
from  his  old  debts,  and  without  his  old  means,  and  he  begins  as  a 
new  man.     ^ 

Some  of  the  consequences  which  illustrate  the  analogy  between 
bankruptcy  and  death  are  these  :  The  bankrupt  loses  all  posses- 
sion of  his  property,  and  all  power  over  it,  and  all  interest  in  it. 
There  is  always  a  legal  possibility  that  the  assets  may  pay  his 
debts  and  leave  a  surplus  ;  and  when  this  happens  in  fact,  the 
interest  and  right  of  the  party  revive,  because  he  is  no  longer  a 
bankrupt ;  but,  while  he  is  one,  his  property  is  taken  wholly  from 
his  hands.  (^) 


SECTION  II. 

OF  THE  EFFECT  OF  THE  BANKRUPTCY  OF  A  PARTNER  UPON  SOLVENT 

PARTNERS. 

§  370.  Rights  of  Assignee.  —  His  property,  rights,  and  interests 
pass  from  the  bankrupt  to  his  assignees.  They  do  not  become 
partners  in  his  stead,  because  the  d'dectus  personarum,  and  other 
principles  of  the  law  of  partnership,  prevent  this.  But  they 
become  tenants  in  common  with  the  partners,  and  have  the  rights 
and  obligations  of  tenants  in  common,  with  some  qualifications, 
and,  perhaps,  some  additions,  which  arise  from  the  peculiar 
origin  of  the    tenancy,  (h)      Thus,  the  assignees  may  claim  an 

air,  11  Ves.  78;  Button  y.  Morrison,  17  Ves.  11   Ves.  5.      See  Rothwell  v.  Devvees,   2 

193;  Marquand  V.  N.  York  Manuf.  Co.,  17  Black,  613. 

Johns.  529.  If  a  partner  absconds,  liis  co-  (g)  Barstow  v.  Adams,  2  Day,  70  ;  Kit- 
partner  may  take  exclusive  possession  of  clien  w.  Bartsch,  7  East,  53;  Cohen  ?;.  Gibbs, 
the  property  of  the  firm  for  the  benefit  of  1  Hill  (S.C.),  206  ;  Stouffer  v.  Coleman, 
the  firm;  and  it  has  been  held,  that  the  ap-  1  Yeates,  399.  The  assignment  of  an  in- 
pointment  of  a  receiver  to  take  charge  of  the  solvent  debtor  has  the  same  effect.  Cooper 
property  of  the  absconding  partner  does  v.  Henderson,  6  Binn.  189  ;  Shirley  v. 
not  divest  the  partner  remaiiung  of  his  Long,  6  Rand.  735  ;  Bank  v.  Horn,  17 
right  to  the  partnershi[)  property.     Hamil  How.  157. 

V.  Hamil,  27  Md.  679.  (/t)  Fox  v.  Hanbury,  Cowp.  449;  West 

(/)  Lord  Eldon  in  Ex  parte  Wlliams,  v.  Skip,  1  Ves.  239  ;    Smith  v.  Stokes,  1 

30 


466 


THE   LAW    OF   PARTNERSHIP. 


[CH.    XV. 


account,  and  require  a  prompt  and  complete  settlement  of  the 
concern.  (0  They  cannot  take  the  property  and  business  into 
tiieir  own  hands,  and  settle  it  themselves,  because  the  solvent 
partners,  at  least  in  equity,  hold,  in  somewhat  the  same  way  that 
surviving  partners  do,  all  tlie  effects  and  property,  and  for  the 
same  purpose, —  that  of  winding  up  the  concern.  For  this  they 
have  the  same  power  and  duty,  and  are  under  the  same  obliga- 
tions, and  may  be  reached  by  the  same  process,  and  compelled  to 
discharge  their  dutv  as  surviving  partners.  And  the  assignees 
have  the  same  rights  and  remedies  as  the  representatives  of  a 
deceased  partner.  (^ )  It  has,  however,  been  held,  that  the 
assignees  become  at  once  tenants  in  common  with  the  solvent 
partners,  their  representatives  or  assigns  :  they  can  neitlier  bring 
trover  against  the  partners  for  the  partnership  effects,  nor  can 
the  solvent  partners  get  their  effects  out  of  the  hands  of  the 
assignees  when  they  have  taicen  possession  ;  for  it  is  said,  that 
at  law,  they  are  equally  entitled  to  tiie  possession.  (Jc) 


East,  363  ;  Smith  v.  Oriell,  1  East,  368  ; 
Wilkins  v.  Davis,  15  N.  B.  R.  66.  In 
Barker  v.  (ioodair,  11  Ves.  85,  Lord  Eldon 
says  :  "  When  one  partner  becomes  a 
bankrupt,  his  interest  in  the  partnership 
property  is  vested  in  his  assignees  ;  and, 
according  to  the  doctrine  of  this  court, 
jjerhaps  with  equities  in  them,  vastly 
beyond  what  tenants  in  common  have, 
where  no  bankruptcy  has  occurred."  And 
Chancellor  Kent,  in  Murray  v.  Murray,  5 
Johns.  Ch.  78  :  "  The  solvent  partner, 
upon  the  dissolution  of  the  partnership  by 
bankruptcy,  being  a  tenant  in  common, 
may  retain  and  distribute  the  funds  in  his 
possession  ;  and  may,  as  was  held  in  Fox 
V.  Hanbury,  .sell  those  partnership  effects 
for  a  valuable  consideration,  and  without 
fraud.  They  cannot  be  called  out  of  his 
possession  by  his  co-tenants,  the  assignees, 
unless  under  the  direction  of  this  court,  on 
a  bill  filed  by  them  for  contribution ;  or, 
perhaps,  where  an  account  of  the  joint 
fund  is  directed  to  be  taken  in  bankruptcy. 
But,  on  the  other  hand,  there  is  no  founda- 
tion, in  law  or  equity,  for  the  solvent 
partner  to  call  to  account  either  the  part- 
nership debtors  who  have  bond  fide  settled 
with  the  assignees,  or  the  assignees  them- 
selves, for  the  funds  in  their  possession. 
They  hold  those  funds  by  an  equal  title  in 
law  with  him,  as  tenants  in  common  ;  and 
by  a  superior  equitable  title,  as  trustees, 


charged  with  the  payment  of  both  the  joint 
aud  separate  debts."  Anon.,  12  Mod.  446; 
Wilson  V.  Greenwood,  1  Swanst.  482 ; 
]\Lirquand  v.  N.  Y.  Man.  Co.,  17  Johns. 
525.  See  Richardson  v.  Tobey,  3  Allen, 
81. 

(/)  Hilliard  on  Bankr.  and  Ins.  60  ; 
Crawshay  v.  Collins,  15  Ves.  218. 

U)  Crawshay  v.  Collins,  15  Ves.  218  ; 
Brown  v.  De  Tastet,  Jac.  284.  In  Hub- 
bard V.  Guild,  1  Duer,  662,  it  was  held, 
that  a  solvent  partner  is  not  entitled  by 
law  to  the  sole  administration  of  the  assets 
of  the  partnership,  which  is  dissolved  by 
the  separate  insolvency  of  one  or  more  of 
the  partners.  The  court  added,  that  they 
saw  no  reason  why  the  solvent  partner 
should  not  himself  be  appointed  the  re- 
ceiver, if  he  would  give  the  necessary 
security.  It  seemed  to  them  that  in  all 
cases  where  the  dissolution  of  a  partnership 
is  occasioned  solely  by  the  insolvency  of 
one  of  the  partners,  the  solvent  partner 
ought  to  be  appointed  receiver,  when  his 
capacity  and  integrity  are  unque.stioned. 
The  appointment  was  made  accordingly. 
See  also  Freeland  v.  Stansfield,  2  Sni.  &  G. 
479. 

(k)  Murray  v.  Murray,  5  Johns.  Ch.  70; 
Smith  V.  Stokes,  1  East,  363;  Salomons  v. 
Nissen,  2  T.  R.  674  ;  Fox  v.  Hanbury, 
Cowp.  445  ;  Smith  v.  Oriell,  1  East,  368  ; 
Binford  v.  Dommett,  4  Ves.  756. 


§  373.]  OF    BANKRUPTCY   AND   INSOLVENCY.  467 

§  371.  Dissolution  results  necessarily.  —  Whether  the  partner- 
ship be  deterniinaljle  at  will,  or  established  for  a  time  certain,  it 
is  equally  and  immediately  dissolved.  And  even  if  there  were  a 
provision  in  the  articles,  that  in  case  of  bankruptcy  of  one  part- 
ner, the  other  partner  should  take  all  his  share  and  interest,  at 
a  certain  valuation,  and  continue  the  business,  and  this  provision 
were  carried  into  full  effect,  there  is,  nevertheless,  a  dissolution 
of  the  i)artnership.  (?)  For  the  loss  of  his  property  and  interest 
takes  out  the  bankrupt  partner,  and  the  loss  of  this  partner  dis- 
solves the  partnership.  There  is  much  doubt,  however,  whether 
a  provision  of  this  kind  is  not  avoided  by  bankruptcy,  because  it 
gives  to  the  ]>ankrupt  a  power  over  the  disposition  of  his  property 
w^hich  all  the  principles  of  the  bankrupt  laws  deny  to  him  ;  but 
the  question  can  hardly  be  considered  as  settled.  (???) 

§  372.  Notice  not  required.  —  So,  too,  no  notice  or  knowledge 
of  the  bankruptcy  or  of  the  dissolution  is  requisite,  any  more 
than  in  the  case  of  dissolution  by  death,  to  prevent  the  partner 
or  his  assets  from  being  bound  for  new  contracts  or  debts,  and 
to  prevent  the  solvent  partners  from  acting  for  him,  except  to 
liquidate  and  realize  the  balance  due  to  him.  The  rule  arises, 
in  part,  from  the  notoriousness  of  the  fact  of  legal  bankruptcy, 
and,  in  part,  from  the  taking  from  him,  by  the  law,  of  all  his 
means  of  satisfying  a  liability,  (w) 

§  373.  Solvent  Partners  continuing  Business.  —  If  the  solvent 
partners,  instead  of  winding  up  the  concern,  continue  the  busi- 
ness, without  stay  or  interruption,  they  do  so  at  their  own  peril, 


{!)  Comyn  on  Cont.  (4th  Am.  ed.)  528.  Madd.  124  ;  Ex  jiartc  Hodgson,   19   Ves. 

(m)  See  Featherstonhaugh  v.  Fenwick,  206.     And  see  Brandon  v.  Robinson,  18 

17  Ves.  298;  Rigden  v.   Pierce,    6  Madd.  Ves.  429.     The  general  distinction  seems 

353  ;  Cook  v.  Collingridge,  Jac.  607,  620.  to  be  that  the  owner  of  the  property  may, 

In  Cookson  i'.  Cookson,    8  Sim.  543,  the  on  alienation,  qualify  the  interest  of  his 

case  of  Cook  v.  Collingridge  is  criticised,  alienee  by  a  condition  to  take  effect  on 

The  following  are  some  of  the  principal  bankruptcy  ;    but  cannot,   by  contract  or 

authorities  applicable  to  the  main  point  :  otherwise,  qualify  his  own  interest  by  a 

Lockyer  v.  Savage,  2  Strange,  947;  Hunter  like  condition,  determining  or  controlling 

V.  Galliers,  2  T.  R.   133  ;    Ex  parte  Hill,  it  in  the  event  of  his  own  bankruptcy,  to 

Cooke's  B.  L.  228,  1  Cox,  300  ;  Ex  parte  the  disappointment  or  delay  of  his  credit- 

Bennet,  Cooke's  B.  L.  229  ;  In  re  Murphy,  ors  ;  the  jus  disponendi,  which  for  the  first 

1  Sch.  &  L.  44  ;  Ex  parte   Henecy,  cited  purpose  is  absolute,    being,   in  the  latter 

id.;    In  re  JMeaghan,    1  Sch.  &  L.    179;  instance,    subject  to  the  disposition  pre- 

Dommett  v.  Bedford,  6  T.  R.   684,  3  Ves.  viously   prescribed   by   law.      Note   to   1 

149;  Ex  parte  Cook,  8  Ves.  353;  Ex  parte  Swanst.  481. 

Hinton,  14  Ves.  598  ;    Ex  parte  Oxley,  1  [n)  Vulliamy  v.  Noble,  3  Meriv.   614  ; 

Ball  &  B.  257  ;  Higinbotham  v.  Holme,  19  Lacy    v.     Woolcot,     2    Dow.    &    R.   458  ; 

Ves.  88;    Ex  parte  N ere,   19  Ves.  93,   1  Thomason  r.  Frere,  10  East,  418;  Franklin 

Rose,  281  ;  Ex  parte  Young,  Buck,  179,  3  v.  Brownlow,  14  Ves.  550,  557. 


468  THE   LAW   OF   PARTNERSHIP.  [CH.    XV. 

and  upon  precisely  the  same  terms  and  responsibility  which  have 
already  been  stated  in  reference  to  surviving  partners,  (o) 

§  374.  Effect  of  Bankruptcy  on  Attachment.  —  It  may  be  stated, 
as  another  instance  of  the  analogy  between  the  actual  death  of  a 
partner  and  that  bankruptcy  which  is  a  commercial  death,  that 
the  latter  suspends,  or,  rather,  annuls,  any  attachment  or  execu- 
tion of  his  property  or  his  interest  in  the  firm,  (p)  ^  We  should 
say,  however,  that  the  American  rule  of  bankruptcy  would  be 
applied  to  this  case,  if  it  were  a  foreign  bankruptcy.  That  is,  if 
there  were  a  foreign  firm,  which  went  into  bankruptcy  abroad, 
and  a  creditor  of  one  of  the  partners,  in  this  State,  attached  or 
was  levying  upon  his  interest  in  property  within  this  State, 
belonging  to  the  firm,  the  foreign  bankruptcy  would  not  suspend 
this  attachment  or  levy.  But,  if  the  foreign  assignee  had  taken 
possession  of  the  property,  his  possession  would  have  completed 
his  title,  and  would  prevent  the  attachment  or  levy.  And,  in  this 
respect,  our  States  are  foreign  to  each  other,  (q) 

§  375.  Actions  by  or  against  Firm.  —  All  actions  for  recovery 
of  debts  due  to  the  firm  may  be  brought  in  the  name  of   the 

(o)  Crawshay  v.  Collins,   15  Ves.  218  ;  support  the  text,  which  is  the  American, 

Brown  V.   De  Tastet,  Jac.   392;    West  y.  in  opposition  to  the  English,  doctrine.    We 

Skip,  1  Ves.  239,  456.  furnish  a  number  of  tne  authorities,  both 

(p)  Barker   i'.   Goodair,    11    Ves.    78  ;  early   and   recent.      Proctor  v.   Moore,   1 

Dutton  V.    Morrison,    17  Ves.  193  ;  In  re  Mass.   198  ;    Baker  v.   Wheaton,  5  Mass. 

Wait,  1  Jac.  &  W.  605.     The  interest  of  509  ;    Watson  v.   Bourne,    10  Mass.  337  ; 

each  partner  being  his  share  of  the  surplus,  Ogden  v.  Saunders,  12  Wheat.  213;  Pren- 

subject   to  all  the  partnership   accounts,  tiss  v.   Savage,   13  Mass.  20  ;    Tappan  v. 

that  interest  only  is  liable  to  the  execution  Poor,  15  Mass.  419,422;    Blake  r.  Wil- 

of  a  creditor ;  and,  by  the  bankruptcy  of  liams,  6  Pick.  286,   306  ;  Agnew  v.  Piatt, 

one,  his  interest  is  divested,  and  vests  in  15  Pick.  417  ;    Betts  v.   Bagley,    12  Pick, 

the  assignees,   by  relation   to  the  act  of  572,  579  ;  Savage  v.  Marsh,  10  Met.  594  ; 

bankru]rtcy.  Brickwood  v.  Miller,  3  Meriv.  Fiske  v.  Foster,  10  Met.   597  ;  Springer  v. 

279 ;  Ex  parte  Farlow,  1  Rose,  421 ;  Cald-  Foster,  2  Story,  383 ;    Shaw  v.   Bobbins, 

well   V.   Gregory,   1   Price,   119-130;    Ex  12  Wheat.  369,  note;    Milne  y.  Moreton, 

parte  Peake,  1  Madd.  358;  Ex  parte  Ruffin,  6  Binn.  353;  Harrison  v.  Sterry,  5  Cranch, 

6  Ves.  126  ;  Ex  parte  liowlandson,  1  Rose,  289,  302  ;    The  Watchman,  1  Ware,  232, 

419  ;  Campbell?;.  MuUett,  2  Swanst.  551-  237  ;  Dawes  v.  Head,  3  Pick.  128  ;  Rich- 

575  ;  Egberts  v.  Wood,  3  Paige,  517.    See  ards  v.  Dutch,  8  Mass.  506  ;  Burk  v.  Mc- 

"Willis  V.  Freeman,  35   Vt.  44.     The  sub-  Clain,    1   H.   &   McH.    236  ;    Wallace  i;.- 

ject  of  the  attachment  of  a  partner's  inter-  Patterson,   2  H.   &  McH.  463  ;  Ward  v. 

est  is  discussed  in   Day  v.  McQuillan,  13  Morris,  4  H.  &  McH.  330  ;  Smith  v.  Smith, 

Minn.  205.  2  Johns.  235  ;    Bird   v.  Caritat,  2  Johns. 

(q)  The  authorities  on  these  points  are  342.     See  Nicholson  v.   Ricketts,  2  E.  & 

very  numerous,  and  at  one  time  were  very  E.  497. 
conflicting.  The  later  authorities  generally 

1  The  reason  of  this  is  that  the  bankruptcy  and  assignment  pass  the  title  to  the 
assignee ;  and  the  creditors  of  the  partners  cannot  attach  property  belonging  to  the 
assignee  and  the  solvent  partner.  See  however  Fern  v.  Gushing,  4  Gush.  357,  contra; 
see  also  Forsaith  v.  Merritt,  1  Low.  336  (semble). 


376.] 


OF   BANKRUPTCY   AND    INSOLVENCY. 


469 


solvent  partners  and  the  assignees  of  the  bankrupt  partners  ;  (r)  ^ 
and  all  actions  against  the  firm  should  be  brought  against  all 
the  partners  by  name,  (s)  including  the  bankrupt,  (i)  unless  he 
has  been  discharged,  (w)  If  he  has  been  discharged,  and  is  still 
made  defendant,  it  would  seem  that  he  may  have  judgment 
against  the  plaintiff;  and  the  plaintiff  may  have  judgment  against 
the  other  partners,  (y)  In  suits  in  equity,  different  rules  prevail 
from  those  which  govern  suits  at  law.  The  general  principle 
there  may  be  said  to  be,  that  the  parties  actually  interested  must 
always  be  joined,  whether  as  plaintiffs  or  defendants.  Qw') 

§  376.  Effect  of  Discharge  of  one  Partner.  —  If  one  partner  be 
bankrupt,  his  discharge  does  not  discharge  the  other  partners, 
nor  affect  their  indebtedness,  excepting  as  to  the  sum  which  the 
creditor  takes  by  way  of  dividend ;  which  is,  of  course,  deducted 
from  the  debt  due  to  him.  If  all  the  partners,  or  the  firm  as 
such,  become  bankrupt,  it  is  still  true  that  the  discharge  of  one 
or  more  affects  only  those  discharged,  {x}^     If  other  partners 


(r)  Thomason  v.  Frere,  10  East,  418  ; 
Murray  v.  Murray,  5  Johns.  Ch.  70  ; 
Hacker  i'.  Shepherd,  2  Chitty,  652  ;  Gra- 
ham V.  Robertson,  2  T.  R.  282.  An  action 
does  not  abate  by  the  bankruptcy  of  the 
plaintiff.  The  assignees  can  continue  the 
action  in  his  name.  Waugh  v.  Austen, 
3  T.  R.  437. 

(s)  Bristow  V.  James,  7  T.  R.  2.^7  ; 
Byers  v.  Dobie,  1  H.  Bl.  236  ;  Ditchburn 
V.  Spracklin,  5  Esp.  31  ;  Dodge  v.  Dicas, 
3  B.  &  Aid.  611  ;  Eice  v.  Shute,  5  Burr. 
2611  ;  Vernon  v.  Jefferys,  2  Strange, 
1146.  But  see,  under  a  peculiar  state  of 
facts,  Colwell  v.  Lawrence,  38  Barb.  643. 

(0  1  Chit.  PI.  (10th  Am  ed.)  o3. 

(ti)  Tuttle  V.  Cooper,  10  Pick.  291. 

(v)  "  Where  a  defence  can  be  made  by 
one  or  more  of  the  defendants,  either  by 
plea  or  by  proof  on  the  trial  which  admits 
the  making  of  the  original  joint  contract, 
but  shows  matter  of  personal  exemption 
or  discharge,  whether  such  exemption 
arises  from  an  incapacity  to  contract  (as 
in  case  of  coverture  or  infancy)  or 
by  matter  of  subsequent  discharge  (as 
in  case  of  bankru{)tcy),  but  which  leaves 
the  other  contracting  parties  liable  to  the 
performance  of  the  contract,  such    party 


may  have  a  separate  judgment  against  the 
plaintiff,  and  the  plaintiff  may  have  a 
valid  judgment  against  the  other  contract- 
ing parties."  Per  Shaw,  C.  J.,  in  Tuttle 
V.  Cooper,  10  Pick.  291.  A  discharge  in 
bankruptcy  granted  to  one  member  of  a 
partnership,  after  he  alone  had  been 
adjudged  bankrupt,  in  a  proceeding  affect- 
ing him  alone,  to  which  his  copartner  was 
not  a  party,  is  not  a  bar  to  an  action, 
against  him  and  his  copartners,  by  a  part- 
nership creditor,  when  the  creditor  shows 
affirmatively,  that,  at  the  time  of  the 
petition,  there  were  partnership  assets  as 
well  as  partnership  debts.  Crompton  v. 
Conkling,  15  N.  B.  R.  417.  But  see  Wilkins 
V.  Davis,  15  N.  B.  R.  60  ;  In  re  Jewett 
15  N.  B.  R.  126,  139. 

{w)  Mechanics'  Bank  v.  Seton,  1  Pet. 
299  ;  Story  v.  Livingstone,  13  Pet.  359  ; 
Hussey  v.  Dole,  24  Me.  20  ;  McConnell  v. 
McConnell,  11  Vt.  290  ;  Noyes  v.  Sawyer, 
3  Vt.  160  ;  Crocker  v.  Higgins,  7  Conn. 
342  ;  Hawley  v.  Cramer,  4  Cow.  717  ; 
Oliver  v.  Palmer,  11  G.  &  J.  426  ;  Park  v. 
Ballentine,  6  Blackf.  223  ;  West  v.  Ran- 
dall, 2  Mass.  181. 

(x)  A  partner  who,  after  getting  his 
certificate,  has  taken  up  the  notes  of  the 


1  McNutt  V.  King,  59  Ala.  597  ;  Halsey  v.  Norton,    45  Miss.  703  ;  Browning  v. 
Mai-vin,  22  Hun,  547.     But  see  contra,  Cunningham  i'.  Munroe,  15  Gray,  471. 

a  Where  a  partner  becomes  bankrupt  individually  and  is  discharged,  the  firm  assets 


470  THE   LAW   OF   PARTNERSHIP.  [CH.    XV. 

are  not  discharged,  each  of  them  mav  be  sued  for  the  whole  of 
the  bahince  of  the  debt  which  remains  unpaid,  (v/)  The  bank- 
ruptcy itself  operates  a  discharge  of  an  execution  against  the 
partnership,  because  it  supersedes  all  remedies  which  any  cred- 
itor resorts  to,  in  favor  of  all  the  creditors,  for  whose  equal  benefit 
it  takes  possession  of  all  the  property.  (2) 

§  377.  Power  of  Solvent  Partner.  —  There  are  many  cases  in 
England  turning  upon  the  right  of  the  solvent  partner  to  pay 
debts,  or  otherwise  dispose  of  the  common  property,  after  an  act 
of  bankruptcy  by  a  partner,  but  before  a  declared  bankruptcy. 
There,  as  soon  as  the  decree  of  bankruptcy  is  made,  it  goes  back 
by  relation,  as  we  have  before  remarked,  and  makes  the  bank- 
ruptcy effectual  from  the  first  act  of  bankruptcy.  And,  with  us, 
all  transfers  or  payments  before  the  bankruptcy,  made  in  con- 
templation of  it,  or  within  a  certain  period  before  it,  are  avoided 
as  against  the  general  creditors,  (a)  We  apprehend  this  rule,  on 
principle,  must  apply  here  to  the  acts  of  the  solvent  partner.  In 
general,  these  acts  cannot  affect  the  creditors  of  the  firm,  because 
the  solvent  partner  is  bound  in  solido  to  pay  them.  What  he  does, 
however,  may  waste  his  means,  so  that  he  ceases  to  be  solvent, 
or  it  may  indirectly  affect  the  several  debtors,  by  lessening  a  sur- 
plus of  his  interest  in  the  joint  fund  to  which  they  might  look. 
But,  to  any  questions  of  this  kind,  there  is  but  one  principle 
applicable  in  practice.  It  is,  that  the  solvent  partner  has  pos- 
session of,  and  full  power  over,  all  tlie  effects  of  the  partnership  ; 
after  the  bankruptcy  is  declared,  that  partnership  is  dissolved  ; 

firm   is   permitted    to    prove  against  the  ton  v.  Morrison,  17  Ves.  19S  ;  /ji-reWait, 

joint    estate.     Atkins    v.    Atkins,    Buck,  1  Jac.  &  W.  605. 

479.  (a)  Everett  v.  Stone,  3  Story,  446  ;  Has- 

(?/)  ^x  par/f  Bolton,  Buck,  13  ;    Heath  sels  r.  Simpson,  Doug.   92;  McKenzie  r. 

V.  Hall,   4  Taunt.  326;    Sleeeh's  Case,   1  Garrison,     10    Rich.     234;    Atkinson    v. 

Meriv.  570  ;  Browne  v.  Carr,  7  Bing.  508.  Farmers'  Bank,  Crabbe,  529  ;  Fidgeon  v. 

{£)  Barker  v.  Goodair,  11  Ves.  78  ;  Dut-  Sharp,  1  Marsh.  198. 

not  being  conveyed  nor  the  firm  creditors  included  in  the  schedule,  the  bankrupt  is 
not  discharged  from  his  firm  debts.  Glenn  v.  Arnold,  56  Cal.  631  ;  Corey  v.  Perry,  67  Me. 
140  ;  Poillon  V.  Lawrence,  77  N.  Y.  207  (semble).  Consequently  where  A.  was  a  member 
of  two  firms,  and  A.  himself  and  one  of  the  firms  became  bankrupt  and  obtained  a  dis- 
charge, A.  was  not  discharged  from  the  debts  of  the  other  firm.  Perkins  v.  Fisher,  80  Ky. 
11.  But  it  has  been  held  that  a  discharge  of  a  bankrupt  from  all  his  debts  ojjcrates 
necessarily  to  discharge  him  from  the  debts  of  a  firm  to  which  he  belongs  ;  Hawley  v, 
Campbell,  62  Cal.  442  ;  and  it  has  been  held  in  some  jurisdictions  that  since  the  part- 
nership debts  are  provable  against  the  individual  partner,  any  discharge  of  the  part- 
ner necessarily  protects  him  against  the  partnership  obligations.  Ex  parte  Hammond, 
L.  R.  16  Eq.  614  ;  In  re  Webb,  4  Sawy.  326  ;  Willson'  v.  Gomparts,  11  Johns.  193. 
See  Barclay  v.  Phelps,  4  Met.  397. 


§  378.]  OF    BANKRUPTCY    AND    INSOLVENCY,  471 

and  now  this  solvent  partner  holds  and  disposes  of  the  effects,  as 
tnistec,  for  all  interested,  (i)  ^  And  if,  in  the  exercise  of  his 
undouhtcd  power,  either  before  or  after  the  declaration  of  bank- 
ruptcy, he  commits  a  fraud,  actual  or  constructive,  all  those  whom 
it  would  injui'c  may  avoid  it,  or  have  their  remedy  against  him 
for  the  damatres  it  causes,  (e) 

§  378.  Proof  by  Partner  against  Copartner.  —  A  rule  has  been 
laid  down  in  England,  and  referred  to  a  special  provision  in  what 
is  there  called  Sir  Samuel  Romilly's  act,  which  rests  also  on  gen- 
eral ])rinciples  and  sound  reason,  and  has,  we  consider,  been 
adopted  in  the  jurisi)rudence  of  this  country.  It  is  tliis :  Each 
partner  is  liable  for  all  the  debts  of  the  firm ;  but  each  partner  is 
liable,  as  a  principal  debtor,  for  his  own  share,  and  as  a  surety 
for  the  other  partners  for  the  remainder.  Hence,  a  solvent  part- 
ner who  pays  all  the  debts  of  the  concern  may  prove,  against 
assignees  of  the  insolvent  partner,  that  proportion  of  what  the 
solvent  partner  has  paid  which  the  insolvent  would  have  paid  if 
also  solvent.  (cZ)  Thus,  if  a  firm  consist  of  three  persons,  and 
owes  large  debts,  two  of  the  three  become  insolvent,  and  the  third 
pays  all  the  joint  debts.  He  has  paid  one-third  as  his  own  debt, 
and  two-thirds  as  the  debts  of  the  other  partners,  one-third  each. 
But  it  seems  that  the  solvent  partner  cannot  consider  the  other 
two  as  sureties  for  each  other  to  him.  If,  therefore,  one  of  the 
two  has  a  large  separate  estate,  and  the  other  little  or  nothing, 
all  he  can  do  is  to  prove  his  third  against  the  one,  and  the  other 
third  against  the  other,  although  he  may  get  no  dividend  on  this 
latter  third.  This,  at  least,  would  seem  to  be  the  prevailing 
doctrine  in  the  decided  cases,  (e)  But  Lord  Eldon  expressed  a 
different  opinion,  and  remarked,  that  he  thought  the  equity  whicli 


(b)  Fox     V.      Hanhury,     Cowp.    445  ;  (c)  Ramsbottom  v.  Duck,  1   Jlont.  on 

Harvey    v.   Crickett,    5    M.  &    S.     336  ;  Part.  135,  appendix ;  Bicrgs    v.    Fellows, 

Parker  y.  Muggridge,  2  Story,  346;  Wood-  8  B.    &   C.    402.     See    Ransom    t:    Van 

bridge  v.  Swann,  4  B.  &  Ad.  633  ;  In  re  Deventcr,  41  Barb.  307  ;    Walsh  v.  Kelly, 

Robinson,    1    Mont.   &  A.   18  ;  Smith   v.  42  Barb.  98. 

Oriel),  1  East,  368  ;   De  Tastet  v.  Carroll,  (d)  Watson  v.   Sheath,  4  IMadd.  477  : 

1  Stark.  88  ;  In  re  Wait,  1  Jac.  &  W.  605.  Butcher  v.  Forman,  6  Hill,  585,  per  Nel- 

See  Westcott  v.  Tyson,  38  Pa.  389,  on  the  son,  C.  J. 

question  of  one  of  the  insolvent  partners  (c)  Ex  parte  Yonge, 2  Ves.  &B.Zd  called 

assisting  a  third  party  in  the  purchase  of  Ex  parte  Young  in  2  Rose,  40  ;  Ex  parte 

the  creditors'  claim.  Ogilby,  3  Ves.  &   B.  133,  called  Ex  parte 


1  So  where  two  firms  entered  into  an  adventure  in  partnership,  and  one  of  the  firms 
became  insolvent,  the  other  firm  had  a  right  to  take  all  the  assets  of  the  joint 
adventure  for  the  purpose  of  settling  the  accounts.     Meador  v.  Hughes,  14  Bush,  652. 


472 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XV. 


made  them  sureties  to  each  other  for  each  other  continued  after 
the  bankruptcy.  (/)  And  this  rule  seems  to  have  been  applied 
in  one  case.  (//)  ^ 

§  379.  Acceptance  'of  Assignee  as  Debtor.  —  The  assignees  and 
the  creditors  may  lose  their  claim  against  a  retiring  partner  for 
debts  due  from  the  pai-tnership,  by  the  assignees  making  them- 
selves responsible.  Thus,  if  after  the  retirement,  and  an  agree- 
ment between  the  partners  that  the  remaining  partner  shall 
continue  the  business  and  pay  all  the  debts,  and  a  part  of  that 
business  was  to  act  for  the  assignees  in  settlement  of  a  bankrupt 
estate;  and  the  assignees,  knowing  the  retirement  and  agi-eement, 
continued  to  employ  the  remaining  partner  alone,  and  he  became 
insolvent,  and  it  turned  out  that  the  partnership  owed  a  large 
balance  to  the  estate  or  to  the  assignees,  —  the  creditors  have  no 
power  to  hold  the  retiring  partner,  because  the  assignees  have  dis- 
charged him  by  their  acts ;  but  they  will  hold  the  assignees  as 


Ogilv}'  in  2  Rose,  177  ;  Wood  v.  Dotlgson, 
2  M.  &  S.  195  ;  Ex  parte  Watson,  Buck, 
449.  In  Ex  parte  Taylor,  2  Rose,  175,  a 
solvent  partner  was  holden  entitled  to 
prove  against  the  estate  of  a  bankrupt 
copartner  the  anionnt  of  the  balance  due 
to  him  upon  the  jiartnership  account, 
first  satisfying  the  partnership  debts,  or 
indemnifying  the  bankrupt  against  them. 
And  in  Ex  parte  King,  17  Ves.  115,  under 
a  joint  commission,  the  separate  estate  of 
one  was  determined  to  have  a  lien  on  the 
other's  share  of  a  surplus  of  the  joint 
estate,  in  respect  of  a  debt  proved  upon 
bills  drawn  by  the  one  in  the  name  of  the 
firm  for  a  seyiarate  debt ;  and  that  the  joint 
creditors  might  come  in  with  the  separate 
creditors  for  the  deficiency.  See  also  Ex 
parte  Reid,  2  Rose,  84. 

(/)  Ex  parte  Hunter,  Buck,  552  ;  Ex 
parte  Smith,  Buck,  492. 

((/)  Ex  parte  Plowden,  3  Mont.  &  A. 
402,  2  Deac.  456.  A.,  B.,  &  C.  being  part- 
ners, A.  and  B.  borrowed  10,000^.  for  the 


firm  on  mortgages  of  their  separate  estates. 
The  firm  became  bankrupt  ;  C.  was  wholly 
insolvent ;  and  A.'s  mortgaged  estate  j)ays 
more  than  his  share  of  the  debt.  It  was 
held  that  A.'s  estate  has  a  claim  to  contri- 
bution from  B.'s  for  the  difference  between 
what  B.'s  estate  sells  for  and  half  the  debt 
of  10,OOOZ.  Sir  John  Cross  observed  : 
"The  rights  of  the  parties  are  not  altered 
by  bankruptcy.  The  facts,  therefore, 
are  simply  these  :  two  codebtors  give  mort- 
gages as  security  on  their  several  estates. 
As  one  failed  to  make  good  the  sum 
secured,  the  other  has  made  up  the  dif- 
ference, whereas  the  amount  should 
be  charged  equally  on  the  two  estates. 
I  am  of  opinion  that,  as  the  assignees 
have  2,771/.  in  their  hands,  the  sepa- 
rate creditors  of  Jellicorse  are  entitled 
to  that  sum,  after  which  his  estate  will 
have  paid  1,000/.  more  than  Kempson's  ; 
therefore  the  whole  2,771/.,  subject  to  the 
claim  for  159/.,  should  be  fiaid  over  to  the 
separate  estate  of  Jellicorse." 


1  It  has  been  held  that  a  partner  cannot  prove  a  claim  for  contribution  against  his 
copartner,  who  is  bankrupt,  in  competition  with  the  separate  creditors.  In  re  Hamil- 
ton, 1  F.  R.  800.  It  was  intimated  in  the  same  case  that  if  a  partner  fraudulently 
appropriated  firm  assets,  the  joint  estate  might  prove  the  amount  against  the  separate 
estate  in  competition  with  firtn  creditors  ;  but  could  not  do  so  if  the  appropriation  was 
not  fraudulent.  Ace,  Cowan  v.  (Jill,  11  Lea,  674.  In  Bird  v.  Bird,  77  Me.  499,  1  Atl- 
455,  however,  it  was  held  that  the  joint  estate  might  prove  against  the  separate  estate, 
in  competition  with  the  separate  creditors,  even  for  a  mere  debt  due  the  firm  by  the 
partner. 


§  380.] 


OF   BANKRUPTCY   AND    INSOLVENCY, 


473 


personally  responsible,  (h)  The  court  has  gone  so  far  as  to  per- 
mit a  retiring  partner  to  prove  his  claim  against  the  bankrupt 
partner,  although  the  debts  of  the  firm  were  not  paid,  when  the 
joint  creditors  have  discharged  the  retiring  partner,  by  directly 
or  indirectly  accepting  the  remaining  jjartner  as  their  only  cred- 
itor, as  by  sanctioning  by  their  conduct  and  acquiescence  an 
arrangement  to  that  effect  between  the  partners,  (i)  Such  a  case 
must  be  rare,  however. 

§  380.  Exception  in  case  of  Fraud.  —  This  distinction  seems 
also  to  be  taken.  If  one  is  defrauded  into  advancing  money  to 
become  a  partner,  and  the  fraudulent  party  becomes  bankrupt, 
the  defrauded  party  may  prove  against  his  estate  for  the  amount 
he  so  advanced,  unless  he  had  held  himself  out  as  a  partner.  By 
so  doing,  even  for  a  very  short  time,  he  had  incurred  the  liabilities 
of  a  partner,  and  cannot  prove  in  competition  with  joint  cred- 
itors, (y)  If  a  retiring  partner  has  a  covenant  of  the  remaining 
partner  to  pay  all  the  debts,  but  the  remaining  partner  becomes 
bankrupt,  leaving  them  or  any  of  them  unpaid,  and  the  retiring 
partner  is  held  to  pay  them,  and  does  pay  them,  —  for  the  amount 
he  so  pays  he  may  prove  against  the  several  estate  of  the  bankrupt 
partner,  {k) 


(h)  If  an  assignee  under  a  commission 
of  bankruptcy  employs  an  agent  to  receive 
money,  and  he  embezzles  it,  the  assignee 
will  be  liable  to  make  it  good  to  the 
creditors,  unless  he  consulted  the  body  of 
the  creditors  in  the  appointment  of  the 
agent.     In  re  Litchfield,  1  Atk.  87. 

(i)  Ex  parte  Grazebrook,  In  re  Naylor, 
2  Deac.  &  Ch.  186.  lu  this  case,  A.,  being 
a  dormant  partner  with  B.,  dissolves  the 
partnership,  and  B.  is  declared  indebted 
to  A.  on  balance.  A.  sues  B.  for  balance, 
and  receives  cognovit  for  debt  and  costs. 
B.  become?  bankrupt.  It  was  held  that 
A.  is  entitled  to  prove  his  debts  against 
the  estate,  although  some  partnership 
debts  are  unpaid.  See  also  Parker  i\ 
Ramsbottom,  3  B.  &  C.  257.  And  see 
contra,  in  case  of  ostensible  partners.  Ex 
parte  Ellis,  2  Glyn  &  J.  312  ;  Ex  parte 
Carter,  2  Glyn  &  J.  233.  And  see  Ex 
parte  Moore,  2  Glyn  &  J.  166. 

(j)  In  Ex  parte  Broome,  1  Rose,  69, 
A.,  induced  by  the  fraudulent  representa- 
tions of  B.  as  to  the  profits  of  his  busi- 
ness, gives  him  a  certain  sum  of  money 
for  a  share  of  it.     On  the  discovery  of  the 


fraud,  A.  files  a  bill  in  equity  for  an 
account,  to  have  the  partnership  declared 
void,  and  for  a  receiver.  The  receiver  was 
ordered.  B.  becomes  bankrupt.  Petition 
by  A.  to  be  admitted  to  prove  his  commis- 
sion refused,  with  liberty  to  make  a  claim. 
It  was  held  that  although  A.,  as  against 
B.,  might  have  an  equity  to  say  he  never 
was  a  partner,  it  would  be  difficult  to  say 
so  as  against  third  persons.  Lord  Eldon 
expressed  himself  at  first  inclined  to  grant 
the  prayer  of  the  petition,  provided  the 
petitioner  would  abandon  the  suit  in 
equity  and  the  receiver,  but  took  time  to 
consider  ;  and  afterwards  (observing  that 
although  the  petitioner  might  have  an 
equity  to  be  considered  as  never  having 
been  a  partner,  yet  that  it  was  extremely 
difficult  to  say  that,  as  to  third  persons, 
he  was  not  a  partner),  made  an  order  that 
the  petitioner  should  be  at  liberty  to  enter 
a  claim  only  for  the  amount  of  his  de- 
mand, but  not  to  prove  with  the  separate 
creditors. 

{k)  Wood  V.  Dodgson,  1  Rose,  47.  In 
this  case,  a  partner  continuing  the  busi- 
ness took  an  assignment  of  all   the  stock, 


474 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XV. 


§  381.  Proof  between  Firms  with  Common  Member.  —  We  have 
already  referred  to  the  case,  not  unfrequently  occurring,  where 
there  are  two  firms,  with  some  persons  who  are  partners  in  both. 
We  have  seen  that  no  suit  at  law  can  be  maintained  between 
them ;  but  a  suit  in  equity  may  be.  And  whether  one  firm  can 
prove  against  the  other  firm  seems  to  be  determined  by  the  ques 
tion,  whether  the  one  firm  is  liable  for  the  joint  debts  of  the 
other.  That  is,  if  the  solvent  firm  must  pay  the  debts  of  a  bank- 
ruj)t  firm,  it  cannot  prove  against  tlie  estate  of  that  firm  in  com- 
petition with  the  creditors  whom  the  solvent  firm  must  itself 
satisfy.  (?)  ^ 

It  has  been  held  that  an  agreement  between  one  partner  and  a 
third  person,  that  the  latter  shall  share  in  the  profits  of  the 
former,  as  profits,  renders  him  liable  as  a  partner  to  the  cred- 
itors of  the  firm,  although,  as  regards  the  other  members  of  the 
firm,  he  is  not  their  copartner.  (U) 


&c.,  and  covenanted  to  indemnify  the  retir- 
ing partner  from  the  debts  then  owing  from 
the  partnership.  The  continuing  partner 
became  bankrupt,  and  obtained  his  certi- 
cate ;  and  subsequently  an  action  was 
commenced  against  the  retiring  partner, 
upon  an  acceptance  of  the  partnership. 
It  was  held  that  no  action  would  lie 
against  the  bankrupt  upon  the  covenant, 
since,  under  49  Geo.  3,  ch.  121,  §  8,  the 
retiring  partner  might,  on  his  liability, 
have  resorted  to  and  proved  his  debt, 
under  the  commission,  and  was  therefore 
barred  by  the  certificate.  See  also  Ex 
parte  Young,  2  Rose,  40 ;  Ex  parte 
Hesham,  1  Rose,  146.  So,  one  partner 
may  agree  to  give  a  retiring  partner  a  sum 
for  the  concern,  though  they  knew  the 
partnership  to  be  insolvent  (provided  no 
fraud  was  intended),  and  the  estate  will  be 
liable.  Ex  parte  Peake,  In  re  Lightoller, 
a  bankrupt,  1  Madd.  346,  354.  See  also 
Perring  v.  Hare,  2  C.  &  P.  401 ;  Whiting 
V.  Furanet,  1  Conn.  60. 


(/)  Ex  parte  Adams,  1  Rose,  305.  See 
also  Cooke's  Bankr.  Laws,  538  ;  Ex  parte 
Hesham,  1  Rose,  146  ;  Ex  parte  Cook, 
Mont.  228  ;  Cases  of  Shakeshaft,  Stirrup 
&  Salisbury,  6  Ves.  123,  743,  747  ;  Ex 
parte  Hargreaves,  1  Cox,  440  ;  Ex  parte 
St.  Barbe,  11  Ves.  413  ;  Ex  parte  St. 
Johns,  Cooke's  B.  L.  510;  Ex  parte  Cas- 
tell,  Ex  parte  Stroud,  2  Glyn  &  J.  124, 
127  ;  Ex  parte  Sillitoe,  1  Glyn  &  J.  374  ; 
Ex  parte  Williams,  3  Mont.  D.  &  D.  433  ; 
McCormick's  Appeal,  55  Pa.  252. 

(11)  Fitch  V.  Harrington,  13  Gray, 
468.  See,  on  the  relative  rights  of  credit- 
ors of  the  Jirm  and  creditors  of  the  indi- 
vidual partners,  Reeves  v.  Ayres,  38  Dl. 
418  ;  Lewis  i\  Conrad,  11  la.  153  ;  Levally 
V.  Ellis,  13  la.  544  ;  Jones  v.  Jones,  13 
la.  276.  A  person  who  lends  the  entire 
capital  to  an  individual  partner,  for  the 
purpose  of  commencing  business,  has  an 
equity  equal  to  that  of  the  cieditors  of 
the  firm.     Reeves  v.  Ayres,  38  111.  418. 


1  If  both  firms  are  bankrupt,  it  is  clear  that  there  can  be  no  proof  by  one  against 
the  other.     See  In  re  Wakeham,  13  Q.  B.  D.  43. 


§  382. J  OF   BANKRUPTCY   AND   INSOLVENCY.  475 

SECTION   III. 

HOW  THE  FUNDS  ARE  APPROPRIATED  TO  THE  DEBTS. 

§  382.  Distribution  of  the  Joint  Estate.  —  We  have  seen  that 
the  great  majority  of  interesting  questions  concerning  partner- 
ship fall  within  the  jurisdiction  of  equity.  This  is  still  more  the 
case  with  questions  of  bankruptcy,  which  go  into  equity  almost 
exclusively.  We  might  expect  that  questions  which  connect  part- 
nership with  bankruptcy  would  be,  more  than  most  others,  deter- 
mined on  equitable  principles.  Hence  the  rule  is  distinctly 
established  in  equity,  that,  in  bankruptcy  of  a  partnership,  the 
joint  property  forms  a  fund  appropriated  to  the  joint  creditors, 
and  the  several  property  of  each  creditor  a  several  fund  appro- 
priated to  the  several  creditors  of  each  partner.'  And  the  joint 
creditors  cannot  go  to  the  several  property  until  the  several  cred- 
itors are  paid  in  full,  and  there  is  a  surplus  over,  by  which  the 
joint  creditors  may  benefit.  On  the  other  hand,  the  several 
creditors  cannot  look  to  the  joint  fund  until  all  the  joint  debts 
are  paid,  and  there  is  a  surplus ;  and  then  the  several  creditors 
of  a  partner  may  resort  to  that  partner's  interest  in  that  sur- 
plus. On')     It  has,  however,  been  held  that,  if  one  partner  pays 


(m)  In  re  Smith,  16  Johns.  102;  Fox  B.  &  P.  288;  Croft  v.  Pyke,  3  P.  Wms. 

V.  HanbuiT,  Cowp.  445  ;  Moody  v.  Payne,  182  ;  Ex  psirte  Ruff,  6Ve      126  ;  Ex  parte 

2  Johns.  Ch.  548  ;  Eddie  v.  Davidson,  Williams,  11  Ves.  5  ;  West  w.  Skip,  1  Ves. 
Doug.  650  ;  Smith  v.  Stokes,  1  East,  367  ;  Sen.  239,  242  ;  note  to  Young  v.  Keighly, 
"Wilson  V.  Gibbs,  2  Johns.  282  ;  Taylor  v.  15  Ves.  559  ;  Dutton  v.  Jlorrison,  17  A^es. 
Fields,   4  Yes.   396  ;  Chapman  v.   Koops,  193-205  ;  Watson  ■;;,  Taylor,  2  Yes.  &  B. 

3  B.    &    P.     289  ;    Parker    v.    Pistor,   3  299  ;  King  v.  Sanderson,  1  Wightw.  50  ; 

1  Y'hen  a  partnership  is  insolvent,  the  partnership  creditors  have  the  priority  with 
regard  to  the  partnership  assets.  They  are  to  be  paid  in  full,  before  the  separate  credit- 
ors can  come  upon  the  assets.  Peters  v.  Bain,  133  U.  S.  670  ;  Evans  v.  AVinston,  74 
Ala.  349  ;  T^nion  Nat.  Bank  v.  Bank  of  Commerce,  94  111.  271  ;  Moody  v.  Downs,  63 
N.  H.  50  ;  Colwell  v.  Weybosset  Nat.  Bank,  16  R.  I.  288,  15  Atl.  80." 

It  is  held  in  England  that  where  a  person  is  represented  as  partner  in  a  business, 
which  really  belongs  to  a  sole  trader,  (that  is,  where  there  is  only  a  partnersliip  by 
holding  out),  the  assets  of  the  business  are  to  be  treated,  for  the  purpose  of  distribution 
in  bankruptcy,  as  partnership  assets,  and  the  creditors  of  the  business  are  to  be  con- 
fined to  them,  hi  re  Rowland,  L.  R.  1  Ch.  421  ;  Ex  parte  Hayman,  8  Ch.  D.  11 
(C.  A. ),  Ace.  In  re  Krueger,  2  Low.  66.  In  Texas,  however,  it  has  been  held  that  since 
there  is  no  partnership,  only  an  estoppel  as  to  certain  persons  to  deny  one,  the  credi- 
tors of  the  business  will  be  given  no  priority  over  the  individual  creditors  in  distribut- 
ins  the  assets  of  the  business.     Grabenheimer  v.  Rindskoff,  64  Tex.  49. 


476  THE   LAW    OF   PARTNERSHIP.  [CH.    XV. 

more  than  his  share  of  the  partnership  debts,  he  has  in  equity  a 
claim  on  the  ])artnership  property,  superior  to  the  claims  of  the 
separate  creditors  of  the  copartners,  {yiwi) 

It  has  been  held  that  the  separate  creditors  of  a  person  who  is 
a  member  of  two  partnerships  have  a  preference  as  to  his  interest 
in  property  in  one  of  the  firms,  as  against  creditors  of  the  other 
firm,  (rnvini) 

§  383.  Distribution  of  Partner's  Separate  Estate.  —  So  far  as  the 
inability  of  the  several  creditors  to  look  to  the  joint  fund  until 
the  payment  of  the  debts  leaves  a  surplus,  the  law  also  is  quite 
settled.  But  it  is  not  settled  that  the  partnership  creditors  may 
not  at  law  look  to  the  several  funds  at  once,  in  common  with  the 
several  creditors.^     So  far  as   the   present  weight  of   authority 

King    V.     Rock,    2     Price     Exch.     198;  18  Ind.  270  ;  Tenney  t'.  Johnson,  43  N.  H. 

Barken'.  Goodair,  11  Ves.  78-85  ;  Church  144  ;  Nixon  v.   Nash,  12  Ohio,  647.     See 

V.   Knox,  2  Day,  514  ;  Peirce  v.  Jackson,  Backus  v.   Murphy,    39  Pa.   397  ;    Cope's 

6  Mass.  242  ;  Wilson  v.  Conine,  2  Johns.  Appeal,   39  Pa.    284  ;    Houseal's  Appeal, 

280  ;    Knox  v.   Simmons,  4  Yeates,  477  ;  45  Pa.  484  ;  Crawford  v.  Baum,  12  Rich. 

Wallace  r.  Patterson,  2  H.  &  M<,-H.  463  ;  L.    75  ;    Willis  v.  Freeman,   35    Vt.    44  : 

Harrison  v.   Sterry,    5  Cranch,   289  ;  Mc-  Lewis  v.  Conrad,   11   la.   481. 

Coombe  v.  Dunch,  2  Dall.  73  ;  Sanderson  {mm)  Crooker  v.  Crooker.  52  Me.  267. 

V.  Stockdale,  11  Md.  563  ;  Linford  v.  Lin-  (minm)  Weaver  v.   Weaver,  4Q  N.  H. 

ford,  4  Dutch.   113;  Dunham  v.   Hanna,  188. 

1  Since  the  partners  are  liable  for  all  firm  debts,  it  would  seem  that  the  partnership 
creditors  might  also  prove  against  the  estates  of  the  individual  partners,  and  share 
with  the  other  individual  creditors.  That  they  may  make  proof  of  their  claims  against 
the  individual  estates  is  everywhere  admitted.  In  re  Johnston,  17  F.  R.  71  ;  Barclay  v. 
Phelps,  4  Met.  397.  But  the  rule  has  become  established  in  the  majority  of  jurisdictions 
that  the  partnership  creditors  cannot  usually  share  with  the  individual  creditors  in  the 
individual  assets.  Peters  v.  Bain,  133  U.  S.  670  ;  In  re  HolUster,  3  F.  R.  452  ;  In  re 
Johnston,  17  F.  R.  71;  In  re  Lloyd,  22  F.  R.  90  ;  Claflin  v.  Behr,  89  Ala.  503,  8  So.  45  ; 
Union  Nat.  Bank  v.  Bank  of  Commerce,  94  111.  271  ;  Bond  v.  Nave,  62  hid.  505  ; 
Bake  v.  Smiley,  84  Ind.  212  ;  New  Market  Nat.  Bank  v.  Locke,  89  Ind.  428  ;  Riley 
V.  Carter,  (Md.)  25  Atl.  667  ;  Hundley  v.  Farris,  103  Mo.  78,  15  S.  W.  312  (over- 
ruling a  dictum  in  Shackelford  v.  Clark,  78  Mo.  491)  ;  Moody  v.  Downs,  63  N.  H. 
50  ;  Davis  v.  Howell,  33  N.  J.  Eq.  72  ;  Morgan  v.  Skidmore,  55  Barb.  263  [scmhh)  ; 
Rodgers  v.  Meranda,  7  Oh.  St.  179  ;  Black's  Appeal,  44  Pa.  503 ;  Col  well  i;.  Weybosset 
Nat.  Bank,  16  R.  L  288,  15  Atl.  80  ;  Fowlkes  v.  Bowers,  11  Lea,  144.  See  McCor- 
mick's  Appeal,    55  Pa.  252. 

In  some  jurisdictions,  however,  another  rule  is  adopted.  Thus  the  rule  prevails  in 
certain  States  that  the  partnershif)  creditors  have  priority  in  the  partnership  assets,  and 
sliare  the  separate  assets  with  the  separate  creditors.  Camp  v.  Grant,  21  Conn.  41  ; 
Gueringeri;.  His  Creditors,  33  La.  Ann.  1279.  Or,  more  common!}',  it  is  held  that 
where  the  firm  assets  are  insufficient  the  partnership  creditors  may  prove  the  balance 
against  the  separate  estates  in  competition  with  the  separate  creditors.  Hutzler  v. 
Phillips,  26  S.  C.  136,  1  S.  E.  502  (see  Adickes  v.  Lowry,  15  S.  C.  128)  ;  Bardwell  v. 
Perry,  19  Vt.  292  ;  Pettyjohn  v.  Woodroof,  86  Va.  478,  10  S.  E.  715.  In  Kentucky 
the  peculiar  rule  prevails  that  when  the  partnership  creditors  have  exhausted  the  firm 
assets  they  can  get  nothing  more  till  the  individual  creditors  have  been  paid  the  same 
proportion  of  their  claims  ;  and  they  then  share  the  separate  assets  remaining  with  the 


§  383.J 


OF   BANKRUPTCY   AND    INSOLVENCY. 


477 


goes,  it  might  seem  that  the  joint  creditors  have  this  power.  But 
of  late  the  law,  as  we  have  said,  seems  distinctly  tending  to 
adopt  this  rule  of  equity,  or  rather  this  half  of  the  equitable 
rule  ;  (n)  the  reason  given  being  that  the  other  half  without  this 
half  would  be  inequitable,  and  that  there  is  no  good  reason  for 
confining  the  several  creditors  to  the  several  fund,  which  does 
not  equally  require  that  the  joint  creditors  should  be  confined  to 
the  joint  fund.  This  whole  rule  in  equity  has  not  been  estab- 
lished without  conflict  and  fluctuation  ;  and  is  not  free  now  from 
doubt,  in  some  minds,  as  to  its  justice,  reasonableness,  and  ex- 
pediency. It  seems  to  be  a  simple  rule,  eminently  practical,  and 
founded  upon  principles  of  policy  so  obvious  that  they  upon  whom 
the  rule  presses  heavily  are  seldom  disposed  to  question  its 
general  propriety,  (o) 


(n)  Separate  creditors  catinot,  in  bank- 
ruptci/,  take  a  dividend  ratably  with  the 
joint  creditors  :  each  estate  is  applicable  to 
its  own  debts.  The  iisnal  directions  are 
to  apply  the  funds  respectively  ;  the  joint 
to  the  joint  debts,  the  separate  to  the  sepa- 
rate debts,  the  surplus  of  each  to  the  credi- 
tors reniaining  on  the  other.  Ex  parte 
Elton,  3  Ves.  238  ;  Eainey  i'.  Nunse,  54  111. 
29.  In  a  New  York  case,  Terry  v.  Butler, 
43  Barb,  395,  the  court,  in  reversing  a 
judgment,  on  appeal,  observed  :  "  But 
there  is  another  branch  of  the  case,  in 
respect  to  which  a  serious  difficulty  exists, 
which  does  not  seem  to  have  been  adverted 
to  before  the  referees,  and  which  requires 
a  reversal  of  tlie  judgment.  The  order 
appointing  the  plaintiff  receiver  was 
founded  on  a  demand  owing  by  Putnam 
&  Butler  as  copartners.  The  property  in 
the  hands  of  the  assignees,  and  which  they 
are  directed  by  the  judgment  herein  to 
transfer  to  the  plaintiff,  is  the  separate 
property  of  Butler.  The  judgment,  also, 
directs  the  plaintiff,  as  receiver,  to  apply 
the  avails  of  said  separate  property  to  the 
payment  of  the  said  copartnership  demand. 
In  this  respect,  I  think  it  is  erroneous.  In 
equity,  the  separate  estate  is  not  liable  for 
partnership  demands,  until  the   partner- 


ship effects  are  exhausted  and  the  separate 
debts  are  paid.  In  the  case  at  bar,  it 
appears  sufficiently,  perhaps,  that  the 
remedy  at  law  against  the  partnership 
property  has  been  exhausted  by  the  pro- 
ceedings had  in  the  legal  action  against 
Putnam  &  Butler,  set  forth  in  the  com- 
plaint and  admitted  on  the  trial.  But 
there  is  no  evidence  that  the  separate 
debts  of  Butler  have  been  paid.  As  the 
judgment  makes  no  provision  for  the  pay- 
ment of  the  separate  debts,  but,  in  effect, 
postpones  them  until  the  plaintifl's  claim 
against  the  firm  is  satisfied  out  of  the  sepa- 
rate estate,  instead  of  directing  payment  of 
the  plaintiffs  demand  out  of  the  swyhis, 
if  any  remains,  after  payment  of  the  sepa- 
rate debts,  it  is,  therefore,  erroneous  and 
must  be  set  aside,  and  a  new  trial  nmst  be 
had."  See  also  the  authorities  cited  in 
the  next  preceding  and  succeeding  notes. 
And  see  Moline  Co.  v.  "Webster,  26  111. 
233 ;  Pahlman  v.  Graves,  26  111.  405  ; 
Weyer  i'.  Thomburgh,  15  Ind.  124  ;  Jack- 
son V.  Clymer,  43  Pa.  79  ;  Black's  Appeal, 
44  Pa.  503  ;  Heckman  v.  Messinger,  49  Pa. 
465 ;  Northern  Bank  of  Kentucky  v. 
Keizer,  2  Duv.  169  ;  Whitehead  v.  Chad- 
well,  2  Duv.  432. 

[o]  The  cases  on  these  questions   are 


separate  creditors,  jmri  passu.  Fayette  Nat.  Bank  v.  Kenney,  79  Ky.  133.  What- 
ever rule  is  adopted,  for  the  benefit  of  sejiarate  creditors,  it  cannot  undo  the  previous 
voluntary  act  of  the  iwrtner.  If  the  partner  has  paid  a  firm  debt  with  his  individual 
property,  or  conveyed  such  property  to  the  firm,  individual  creditors  cannot  comydain. 
AVinslow  V.  Wallace,  116  Ind.  317,  17  N.  E.  923;  Indianapolis  Board  of  Trade  v. 
Wallace,  117  Ind.   599,  18  N.   E.  48. 


478 


THE   LAW    OF   PARTNERSHIP. 


[CH,    XV. 


§  384.  Distribution  Tvhere  no  Joint  Estate.  —  This  rule  can 
apply  only  where  there  ai-e  matters  to  which  it  can  apply  ;  as 
where  there  are  joint  debts  and  joint  funds,  and  also  several 
debts  and  several  funds.  It  is,  therefore,  not  properly  an  excep- 
tion to  the  rule  where  there  is  no  joint  estate  or  no  living-  solvent 
partner,  or  where  there  are  no  separate  debts. ^  These  cases, 
which  are  sometimes  called  exceptions  to  the  rule,  should  ratlier 
be  thought  to  fall  without  the  rule.  (/»)  There  is,  however,  one 
technical  exception  recognized  in  England,  —  when  a  creditor  of 


very  numerous.  The  questions  are  con- 
sidered quite  fully  in  Murray  v.  Murray, 

5  Johns.  Ch.  60  ;  Bell  v.  Newman,  5  S. 

6  R.  78  ;  Allen  v.  Wells,  22  Pick.  450, 
where  many  of  the  conflicting  cases  are 
examined.  In  Jarvis  v.  Brooks,  23  N.  H. 
136,  Perley,  J.,  in  delivering  the  opinion  of 
the  court,  says  :  "  The  right  of  the  partner- 
shi])  creditors  to  a  preference  in  the  ai)pli- 
cation  of  the  partnersliip  funds  having 
been  admitted  in  this  State,  tlie  question 
raised  in  this  case  is,  whether  the  corre- 
sponding and  correlative  rule,  gi^ang  a 
preference  to  the  individual  creditor  over 
his  debtor's  separate  estate,  is  also  to  be 
considered  as  having  been  adopted  as  a 
branch  and  member  of  the  same  equitable 
doctrine.  If  the  preference  is  admitted  in 
favor  of  the  joint  creditor,  but  denied  to 
the  separate  creditor,  the  principle  of 
equality  and  reciprocity,  upon  which  the 
interference  of  equity  with  the  legal  rule 
has  been  vindicated  in  England,  wholly 
fails.  "We  have  admitted  the  equitable 
rule,  which  takes  away  the  sej)arate  credi- 
tor's legal  right  to  satisfy  his  debt  upon  an 


undivided  moiety  of  the  partnership  prop- 
erty. Principle,  consistency,  and  equal 
justice  to  the  separate  creditors,  would 
seem  to  requii'e  that  we  should  also  adopt 
the  other  branch  of  the  same  equitable 
doctrine,  and  there  is  no  greater  difficulty 
in  administering  one  branch  of  the  doc- 
trine than  the  other  ;  both  may  be  directly 
asserted  at  law  with  equal  convenience." 
See  Sniffer  v.  Sass,  14  Rich.   L.  20. 

{p)  Ex  parte  Sadler,  15  Ves.  52  ;  Ex 
parte  Machell,  2  Ves.  &  B.  216  ;  Ex  parte 
Abel,  4  Ves.  837  ;  Ex  parte  Clay,  6  Ves. 
813  ;  Ex  parte  Chandler,  9  Ves.  35  ;  Ex 
parte  Hall,  9  Ves.  349  ;  Ex  parte  Elton,  3 
Ves.  238  and  note  (Sumner's  ed.) ;  Ex 
parte  Hubbard,  13  Ves.  424.  The  prin- 
ciple that  there  should  be  no  joint  estate 
has  been  carried  to  such  an  extremely 
rigorous  extent,  that,  in  one  case  where 
the  joint  projierty  was  but  51.,  and  in  an- 
other only  \l.  lis.  and  &d.,  the  joint 
creditors  were  refused  permission  to  take 
dividends  under  the  separate  estate,  so  fine 
has  the  distinction  been  drawn.  Ex  parte 
Peake,  2  Rose,  54  ;  In  re  Lee,  id.  note. 


^  If  there  are  no  net  assets  of  the  joint  estate,  that  is,  nothing  remaining  after  pay- 
ing the  expenses  of  properly  settling  the  escate,  the  firm  creditors  may  prove  against 
the  separate  estates  of  tlie  partners  pan  ^lassu  with  the  individual  creditors  ;  and  since 
the  firm  has  a  claim  against  the  partners,  it  cannot  be  said  to  have  no  assets  unless 
there  are  no  solvent  partners.  In  order  to  come  on  the  separate  estate  the  joint  credi- 
tors must  therefore  prove  that  there  are  no  joint  assets  and  no  solvent  partner  ;  and 
may  then  do  so.  Ex  parte  Kensington,  14  Ves.  447  ;  In  re  Lloyd,  22  F.  R.  88  ;  //;  re 
AVe"st,  39  F.  R.  203  ;  Hairis  v.  Peabody,  73  Me.  262  ;  Shackelford  v.  Clark,  78  Mo.  491  ; 
Ruth  V.  Lowrey,  10  Neb.  260,  264  {semhle)  ;  Brock  v.  Bateman,  25  Oh.  St.  609  ;  Scull's 
Api^eal,  (Pa.)  7  Atl.  588  ;  Alexander  v.  Gonnan,  15  R.  I.  421,  7  Atl.  243  ;  Curtis  v. 
Woodward,  58  Wis.  499,  17  N.  W.  328.  But  ^ee  contra,  (that  even  then  the  joint 
creditors  cannot  come  on  the  separate  assets).  Warren  v.  Farmer,  100  Ind.  593  ;  Howe 
V.  Lawrence,  9  Cush.  553  :  In  re  Gray,  111  N.  Y.  404,  18  N.  E.  719  (semble).  When 
any  assets  are  left  after  paying  the  expenses  of  settling  the  estate,  but  are  expended  in 
the  vain  hope  of  recovering  more,  it  seems  that  the  firm  creditors  cannot  come  on  the 
separate  estates  in  competition  with  the  separate  creditors.  In  re  Blumer,  12  F.  R.  489. 


§  385.J  OF  BANKRUPTCY   AND   INSOLVENCY.  479 

the  partnership  is  a  petitioner  for  a  separate  commission  against 
a  bankrupt  partner,  —  which  rests  there  on  the  technical  reason, 
that  a  commission  of  bankruptcy  is  at  once  an  action  and  an  exe- 
cution. This  rule  has  not  been  recognized  in  practice  in  this 
country,  so  far  as  we  know;  nor  does  it  seem  tons  to  be  sup- 
ported by  any  substantial  reasons  or  principles  derivable  from  the 
law  of  bankruptcy  in  relation  to  partnership,  (^rf) 

§  385.  Effect  of  Insolvency  of  Firm  on  Separate  Property.  —  If  a 
partner  becomes  bankrupt,  his  assignees  take  only  his  interest  in 
the  joint  property,  (r)  But  it  seems  that,  if  a  firm  is  bankrupt, 
all  the  property  of  the  firm,  and  also  all  the  several  property  of 
the  partners,  goes  to  the  assignees,  (s)  Practically,  and  in  this 
country,  this  can  be  tlie  case  only  where  the  partners  are  also 
insolvent,  or  suppose  themselves  insolvent,  or  in  danger  of  becom- 
ing so ;  that  is,  have  not  enough  to  pay  all  the  debts  of  the  firm, 
and  all  their  several  debts  also.  For  as  the  solvent  partners 
would  all  be  held,  finally,  for  the  debts  of  the  firm,  they  would  pay 
them  without  its  insolvency.  Indeed,  while  the  insolvency  of  a 
partner  when  the  firm  is  solvent  is  no  uncommon  circumstance, 
the  legal  insolvency  of  a  firm  of  which  the  partners  are  solvent  and 
able  to  pay  all  the  joint  as  well  as  several  debts  is  unknown  in 
practice.  It  has  been  held,  that  an  assignment  of  a  firm  for  the 
benefit  of  creditors  would  be  regarded  as  a  fraudulent  convey- 
ance, unless  it  included  all  the  individual  estate  of  the  partners 
as  well  as  the  partnership  property,  (ss)  ^ 

{q)  Ex  parte  Crisp,    1   Atk.    133  ;  Zr  1  P.  Wms.  458,  and  Mr.  Cox's  note  ;  Bur- 

parte  Hall,  9  Ves.  349  ;  Ex  parte  Acker-  don  v.  Dean,  2  Ves.  Jr.  607  ;  Mumford  v. 

man,  14  Ves.  604  ;  Ex  parte  De  Tastet,  1  Murray,  1  Paige,  620  ;  Smith  v.  Kane,  2 

Rose,  10,  17  Ves.  247.     And  see   Miirrill  Paige,  303 ;  Van  Epps  v.  Van  Deusen,  4 

V.  Neill,  8  How.  414,  427  ;  M'CuUoh  v.  Paige,  64.     See  Lothrop  v.  Wightman,  41 

Dashiell,  1  H.  &  G.  99  ;  Ex  parte  Taitt,  Pa.  297. 

16  Ves.  193  ;  Ex  parte  Dewdney,  15  Ves.  (s)  Judd  v.  Gibbs,   cited    Hilliard   on 

499  ;  Ex  parte  Chandler,  9  Ves.  35  ;  Ex  Bankr.  114  ;  Ex  parte  Cook,  2  P.  Wms. 

parte  Crisp,  Ccoke's  B.  L.  17  Willes,  467.  500  ;  Ex  parte  Bandier,  1  Atk.  98  ;  Hague 

(?•)  Parker  v.  Muggridge,  2  Story,  334.  v.   Rolleston,  4   Burr.  2174  ;    Harrison  v. 

And  subject  to  the  same  equities  which  Sterry,  5  Cranch,  239  ;  Wharton  r.  Fisher, 

atfect  the  bankrupt  or  insolvent.     Jewson  2  S.  &  R.  178. 

V.  Moulson,  2  Atk.  420  ;  Jacobson  v.  Wil-  (ss)  Citizens'    Ins.    Co.    v.   Wallis,    23 

liams.  1  P.  Wms.  382;  Bosvil  v.  Brander,  Md.  182.     [See  note  1.] 

1  In  the  absence  of  a  bankruptcy  law,  the  common  method  of  securing  the  distribu- 
tion of  a  debtor's  assets  among  his  creditors  is  by  a  voluntary  assignment  for  benefit  of 
creditor?.  In  many  States  such  assignments  are  regulated  by  statute  :  in  all,  they  are 
valid  at  common  law  unless  fraudulent.  A  question  of  some  difficulty  is  jiresented 
when  it  becomes  advisable  to  make  an  assignment  of  partnerr-liip  property  ;  namely, 
whether  it  is  necessary  to  include  the  separate  property  of  the  partners.  If  a  general 
assignment  is  made  by  the  partners  of  all  their  property,  both  partnership  ani>^  >idivi. 


480  THE   LAW    OF   PARTNERSHIP.  [CH.    XV. 

In  England,  by  statute,  joint  creditors  arc  entitled  to  prove 
under  a  separate  commission  for  the  purpose  of  voting  in  the 
choice  of  assignees,  and  assenting  to,  or  dissenting  from,  the  cer- 
tificate. (0  But  there  is  no  provision  enabling  separate  creditors 
to  prove  for  this  purpose  under  a  joint  commission.  The  law  as 
to  them,  therefore,  stands  as  it  was  before,  which  prevents  them 
from  voting  in  the  choice  of  assignees  under  a  joint  commis- 
sion, (u)  When  there  is  no  statutory  enactment  in  this  country, 
making  other  provisions,  we  should  consider  the  law  to  be  as  it 
was  in  England  before  the  passage  of  the  statute,  (uu) 

§  386.  Rights  of  Secured  Creditors.  —  [A  secured  creditor  cannot 
usually  prove  his  entire  claim  in  bankruptcy  unless  he  surrenders 
his  security.  But  where  a  partnership  creditor  has  security  which 
belongs  to  the  estate  of  a  separate  partner,  or  an  individual  cred- 

{t)  Before  the  statute  they  were  not  so  creditors  requires  it,  an  order  will  be  made, 

entitled  {Ex  parte  Simi)son,  2  Rose,  338  ;  that  an  inspector  shall  be  appointed  for 

Ex  parte  Taitt,  16  Ves.  193,  note  [Sum-  the  separate  estates,  as  a  check  upon  the 

ner's  ed.]  ;  Ex  parte  Wilson,  18  Ves.  439),  proceedings   of  the   assignees.     Ex  parte 

unless  there  were  no  separate  creditors  to  Batson,  1  Glyn  &  J.  269. 
vote.     Ex  parte  Jones,  18  Ves.  283  ;  Ex  {uu)  The   weight   of  authority   favors 

parte  Taylor,  18  Ves.  284  ;  Ex  parte  Lay-  the  rule  that  a  partnership  creditor  may 

cock,  1  Rose,  32.  prove  his  claim  against  the  estate  of  an 

(w)  Ex  parte  Parr,  18  Ves.  65,  1  Rose,  individual  partner,   and,    of  course,   that 

76  ;  Ex  parte  Hamer,    1   Ro.se,    321  ;  Ex  such  provable  claim  will  be  barred  by  the 

parte  Jepson,  19   Ves.   224.     Upon  some  discharge.     I?i  re  Jewett,    15  N.  B.   R. 

occasions,   if  the  interest  of  the  separate  126. 

dual,  it  is  good,  and  the  assets  will  be  distributed  as  they  would  be  in  case  of  bank- 
ruptcy. Peters  v.  Bain,  133  U.  S.  670  ;  Cohvell  v.  Weybosset  Nat.  Bank,  16  R.  L 
288,  15  Atl.  80.     But  see  Gable  v.  Williams,  59  Md.  46. 

If  the  separate  property  of  all  the  partners  is  not  included  in  the  assignment,  it  is 
sometimes  held  that  the  assignment  is  void.  Collier  v.  Hanna,  71  Md.  253,  17  Atl. 
390;  Cleveland  v.  Battle,  68  Tex.  Ill,  3  S.  W.  681.  Li  other  States,  however,  it  is 
held  that  an  assignment  of  the  partnership  assets  for  the  benefit  of  firm  creditors  is  good, 
though  the  individual  property  of  all  the  partners  is  not  included.  Drucker  v.  Well- 
house,  82  Ga.  129,  8  S.  E.  40 ";  Ex  parte  Hoi)kins,  104  Ind.  157,  2  N.  E.  587  ;  McFar- 
land  V.  Bate,  45  Kas.  1,  25  Pac.  238  ;  Trumbo  v.  Hamel,  29  S.  C.  520,  8  S.  E.  83  ; 
Auley  V.  Osterman,  65  Wis.  118,  25  N.  W.  657.  See  also  Wells  r.  Ellis,  68  Cal.  243, 
9  Pac.  80. 

If  a  statute  requires  all  the  propert}'  of  a  debtor  to  be  conveyed,  a  conveyance  of 
partnership  property  alone  may  perhaps  be  bad  (McFarland  v.  Bate,  45  Kas.  1,  25  Pac. 
238,  semble)  ;  and  it  is  no  doubt  in  the  power  of  the  legislature  to  require  an  assign- 
ment of  all  property,  both  joint  and  individual.  But  in  the  absence  of  such  a  statute, 
that  rule  would  seem  more  in  accordance  with  principle  which  allows  an  assignment  of 
the  partnership  assets  alone.  That  rule  recognizes  the  separate  existence  of  the  firm, 
and  its  position  as  the  real  owner  of  its  property.  Drucker  %i.  Wellhouse,  82  Ga.  129, 
8  S.  E.  40  ;  Trumbo  v.  Hamel,  29  S.  C.  520,  8  S.  E.  83.  Nor  is  the  opposite  view 
consistent  with  the  universally  recognized  power  of  a  single  partner  to  make  an  assign- 
ment of  the  firm  property  in  the  absence  of  his  copartner  (ante,  §  110),  for  of  course 
the  individual  property  of  the  latter  could  not  be  included. 


§  387.]  OP   BANKRUPTCY    AND    INSOLVENCY.  481 

itor  is  secured  out  of  the  partnership  assets,  he  may  prove  his 
entire  claim  against  the  estate  wliich  is  indebted  to  him  without 
surrendering  his  security  ;  since  it  would  not  inure  to  the  benefit 
of  the  debtor  estate.^] 


SECTION  IV. 

WHAT    DEBTS   OR    FUNDS   ARE   JOINT,    AND    WHAT   ARE    SEVERAL. 

§  387.  Debt  whether  or  not  owed  by  Partnership.  —  It  is  impor- 
tant to  determine  what  creditors  belong  to  the  one  class  or  the 
other,  and  what  funds  belong  to  the  one  or  the  other,  that  they 
may  be  duly  appropriated. 

The  question,  whether  a  party  is  a  joint  creditor  or  a  several 
creditor,  resolves  itself  into  two.  One  question  is,  Was  the  debt, 
as  originally  contracted,  the  debt  of  the  partnership,  or  the  debt 
of  some  one  partner  ?  (v)  This  must  depend  altogether  upon  the 
considerations  which  have  already  been  presented,  as  to  the  lia- 
bility of  partners  and  of  partnerships.  They  determine  whether 
a  certain  debt,  claimed  to  be  that  of  a  firm,  was  contracted  by  the 
firm,  or  by  one  person,  partner  or  other,  having  authority  to  bind 
the  firm  in  that  way  to  that  debt.  Or  whether  a  debt,  claimed  to 
be  the  several  debt  of  a  partner,  and,  as  such,  entitled  to  prior- 
ity upon  the  several  fund,  was  contracted  by  him  alone,  or  by 
him  for  the  firm,  so  as  to  make  it  legally  the  debt  of  the  firm. 
In  other  words,  these  questions  depend  almost  wholly  upon  the 
considerations  which  determine  the  authority  of  one  who  acts  for 
a  firm,  or  the  liability  of  the  members  of  the  firm.     And  it  does 

({■)  A.,  as  a  trader,  being  indebted  to  want  of  assent  on  the  part  of  the  creditors, 

several    persons,    enters   into    partnership  Lord  Ehlon  observed  :  "  But  1  agree  to  the 

with  B.,    and  brings   his  stock  in  trade  ])roposition,  that  a  very  little  will  do  to 

into  the  partnership.     By  the  partnershiji  make  out  an  assent  to  the  agreement.     If 

articles,  it  was  agreed  tliat  the  joint  trade  any  of  the  creditors  named  in  the  schedule 

should  pay  the  creditors  of  A.,  named  in  a  think  they  can  make  out  such  a  case,  they 

schedule.      It   was   held   that  a   separate  may  apply,  on  that  giound,  to  prove  their 

creditor  of  A.,  named  in  the  schedule,  did  debts  against  the  joint  estate."     Ex  parte 

not,  by  the  articles,  become  a  joint  creditor  Williams,  Buck,  13. 
of  A.  and  B.     This  was  on  the  ground  of 

1  In  re  Plummer,  1  Phil.  56  ;  Rolfe  v.  Flower,  L.  R.  1  P.  C.  27  ;  Ex  parte  Man- 
chester Co.,  L.  Ft.  18  Eip  249  ;  Iti  re  Holbrook,  2  Low,  259  ;  In  re  Thomas,  17  N.  B. 
R.  54.  But  see  contra,  Harmon  v.  Clark,  13  Gray,  114  {semble) ;  White  v.  Dougherty, 
Mart.  &  Y.  309. 

81 


482  TEE  LAW   OF   PARTNERSHIP.  [CH.    XV. 

not  seem  necessary  to  add  here  anything  to  what  has  been  already 
said  on  these  subjects,  (w) 

§  388.  Change  of  Nature  of  Debt.  —  But  the  second  of  the  two 
questions  referred  to  is  more  difficult.  It  is  whether  a  debt, 
which  was  originally  a  joint  debt,  has  become  a  several  debt,  or 
whetlier  a  debt  originally  several  has  become  joint.  A  part  of 
this  difficulty  springs  from  the  principle,  that  a  firm  is  so  far  dis- 
tinct from  the  members  who  compose  it  that  a  creditor  of  the 
firm  may  have  the  partnership  and  also  the  several  security  of 
the  partners,  or  some  of  them,  as  sureties  for  the  debt ;  and  a  cred- 
itor of  one  or  more  partners  may  have  the  liability  of  the  firm  as 
security  for  his  debt.  Hence,  if  a  debt  was  originally  of  one  kind, 
and  the  creditor  can  show  indebtedness  of  the  other  kind  f  jr  the 
same  cause,  the  question  may  arise,  whether  the  new  indeljtedncss 
is  in  discharge  and  extinguishment  of  the  old,  or  only  by  way  of 
collateral  security  to  the  old.  (x)  For  if  after  a  dissolution  the 
payee  of  a  note  of  a  firm  gives  it  up,  and  takes  the  several  notes 
of  the  partners  for  their  several  shares,  he  has  no  rights  as  a 
partnership  creditor,  (xx) 

§  389.  Consent  and  Consideration  necessary.  —  If  the  one  indebt- 
edness discharges  the  other,  there  must  be,  first,  a  consent  of  the 
creditor,  and  a  consideration  of  some  kind  for  the  new  indebted- 
ness, and  a  consideration  of  some  kind  for  the  discharge  of  the 
old.  (?/ )  Thus,  if  a  partner  makes  a  purchase,  on  his  own  ac- 
count, and  pays  for  it  by  the  note  of  the  firm,  which  is  all  the 
creditor  has,  his  possession  of  this  note  does  not  necessarily  prove 
his  discharge  of  the  several  partner.     If  he  gives  up  the  note  of 


{w)  See  cases  cited  in  following  note,  Ex    parte    Kendall,    17  Ves.    .514,    527; 

for   such   further    consideration    of    these  Cowell  v.  Sikes,  2  Russ.  191  ;  "Wilkinson 

points  as  may  be  thought  necessary.  v.   Henderson,    1   Mylne  &  K.   582,    588 ; 

(x)  Exparte  Whitmore,  3  Mont.  &  A.  Braithwaite  v.  Britain,  1  Keen,  206,  220  ; 

627.     This  case  is  a  leading  and  illustra-  Hart  v.  Alexander,  2  M.  &  \V.  484  ;  Lyth 

tive  case  ;  but,  as  <|uestions  arising  under  v.  Ault  &  Wood,  7  Exch.  669  ;  Hariis  v. 

this  branch  of  the  law  are  largely  governed  Farwell,  15  Beav.  31  ;  Yarnell  v.  Anderson, 

by  the  special  facts  in  the  case,  we  give  14  ]Mo.  619  ;  Smith  v.  Rogers,  17  Johns, 

the  principal  authorities.     Ex  parte  "Solte,  340. 

2  Glyn  &  J.  295  ;  Thompson  ;;.  Percival,  5  (rx)  Crooker  v.  Ciooker,  52  JTe.  267. 

B.   &  Ad.   925  ;  Evans  v.   Drummond,   4  (y)   But  there  must  be  an  extinguisli- 

Esp.   89;    Read   v.   White,  5   Esp.    122;  ment  of  the  original  indebtedness.    Cuxon 

Bedford  v.  Deakin,  2  Stark.  178,  2  B.  &  v.   Chadley,    3  B.   &   C.   591  ;  Butterfield 

Aid.   210  ;  Lodge  v.    Dicas,  3  B.   &  Aid.  v.   Hartshorn,   7   N.   H.   345  ;  Warren  v. 

611  ;  David  v.  Ellice,  5  B.  &  C.  196  ;  Kir-  Batchelder,    15  N.    H.    129  ;  Wharton  v. 

wan  V.  Kirwan,  4  Tyrw.  491,  2  Cr.  &  M.  Walker,  4  B.  &  C.  163  ;  Owen  v.  Bowen, 

617  ;  Winter  v.  Innes,  4  Mylne  &  C.  101  ;  4  C.  &  P.  93  ;  Gibson  v.  Minet,  1  C.  &  P. 

Vulliamy  v.  Noble,  3  Merivl  619  ;  Sleech's  247  j  McKinney  v.  Alvis,  14  111.  34. 
Case  in  Devaynes  v.  Noble,  1  Meriv.  565  ; 


§  389.]  OF    BANKRUPTCY    AND    INSOLVENCY.  483 

the  partner,  that  would  prove  it;  but  if  there  was  only  a  simple 
debt  of  that  partner,  as  for  a  purchase,  tlie  note  of  tlie  firm 
would  not  be  a  payment  of  this  debt.  In  Maine  and  Massa- 
chusetts, there  would  be  a  presumption  of  payment,  to  be 
overcome  only  by  i)roof  of  a  different  intention  between  the  par- 
tics.  (2)  In  other  States,  and  in  the  federal  courts,  the  general 
presumption,  that  a  negotiable  note  is  not  payment,  would  applv, 
and  could  be  rebutted  only  by  proof  that  it  was  otherwise 
intended,  (a)  That  is,  we  should  say  in  such  a  case  the  creditor 
might  consider  the  old  debt  as  still  existing,  and  claim  as  several 
creditor,  if  that  would  be  for  his  advantage,  giving  up  the  com- 
pany's note.  If  the  intention  of  discharging  the  old  debt  by  the 
new  was  made  out  by  proof,  or  by  presumption,  the  question  would 
still  occur  as  to  the  consideration  ;  and  we  should  say,  that  the 
getting  all  the  partners,  instead  of  a  part,  would  be  a  considera- 
tion enough  for  the  discharge  by  the  creditor  of  the  old  debt ; 
and,  at  the  same  time,  if  no  especial  consideration  to  the  firm 
were  proved,  we  should  say  that  the  discharge  of  the  several 
indebtedness  of  the  one  partner  would  be  a  sufficient  giving  up 
of  value  by  the  creditor  to  make  a  consideration  on  which  the 
firm  would  be  held  (6) 

If  the  debt  was  originally  joint,  and  had  apparently  become 
several  instead  of  joint,  we  apprehend  that  a  distinct  consent  of 
the  creditor  to  this  arrangement, —  by  which  he  gives  up  all,  and 
retains  only  one,  —  and  a  distinct  consideration  for  his  consent, 
must  be  proved.  And  this,  of  course,  may  be  any  benefit  to  him, 
actual  or  prospective  ;  or  any  loss  or  injury  to  the  firm,  suffered  at 
the  instance  of  the  creditor.  A  consideration  to  the  several  ]iart- 
ner  must,  perhaps,  also  be  proved ;    for,  although   he  was  held 

(j)  Butts  V.  Dean,  2  Met.  76  ;  Watkins  Johns.  247  ;  Hughes  v.  Wheeler,  8  Cowen, 

V.   Hill,  8   Pick.  522;  Reed  v.  Upton,  10  77  ;  Booth  v.  Smith,  3  Wend.  66  ;   Bill  v. 

Pick.  525  ;    Maneely   v.    McGee,  6  JIass.  Porter,  9  Conn.  23 ;  Davidson  v.   Bridge- 

143;  Wood  v.  Bodwell,  12  Pick.  268;  Ilsley  port,   8  Conn.   472  ;  Elliott  v.   Sleeper,  2 

V.  Jewett,  2  Met.  168  ;  Varner  v.  Noble-  N.  H.  525  ;   Frisbie  v.  Larned,  21  Wend, 

borough,  2  Me.  121  and  note  (a) ;  Desca-  450  ;  Cole  v.  Sackett,  1  Hill,  516  ;  Way- 

dillas  V.   Harris,  8  Me,   298  ;  Newall  v.  dell  v.  Luer.  5  Hill,  448.    For  the  English 

Hussey,  18  Me.  249;  Bangor  v.  Warren,  law  upon  this  point,  see  Crowe  v.  Clay,  9 

34  Me.  324  ;  Fowler  v.   Ludwig,  34  Me.  Exch.  604  ;  Maxwell  v.  Deare,   8  Mome, 

455  ;   Shuniway   v.    Reed,    34    Me.    560  ;  P.  C.  363. 

Comstock  V.  Smith,  23  Me.  302  ;  Gooding  (b)  Ex  parte  Williams,  Buck,  16  ;  Ex 

V.  Morgan,  37  Me.  419.  parte  S,eddon,  2  Cox,  49  ;  Ex  parte  Lobli, 

(a)  Peter    i-.    Beverl.y,    10    Pet.    567 ;  7  Ves.  592  ;  Scaife  v.  Jackson,  5  Dow  & 

Sheehy    v.    Mandeville,    6   Cranch,    253  ;  R.  290,  3  B.  &  C.  421  ;  Ex  parte  Kedie,  2 

Wallace  v.    Agry,   4   Mason,    336  ;  Smith  Deac.   &   Ch.   321  ;    Ex  parte  Jackson,   1 

V.  Smith,  27  N.  H.  244  ;  Van  Ostrand  t\  Ves.  Jr.  131.     And  see  cases  in  previous 

Reed,  1  Wend.  424  ;  Biirdick  i:  Green,  15  notes. 


484 


THE    LAW    OP    PARTNERSHIP. 


[CH.    XV. 


before,  he  had  before,  on  payment,  a  right  to  charge  his  payment 
to  the   firm,  which  he  has  not  now.  (c) 

In  general,  it  would  seem  from  the  cases  that,  while  a  distinct 
intention,  or  consent  and  agreement,  of  all  the  partners  must  be 
proved,  in  order  to  give  validity  to  an  arrangement  by  which  a 
new  indebtedness  has  discharged  an  old  one,  or  a  joint  debt  been 
extinguished  by  conversion  into  a  several  debt,  or  vice  versa, — 
if  such  consent  and  agreement  be  proved,  the  court  apply  quite 
liberally  the  principle  of  novation,  and  consider  the  discharge  of 
the  one  debt  a  sufficient  consideration  to  sustain  the  assumption 
of  the  new  debt,  (d) 

"Whether  or  no  such  consent  and  discharge  have  taken  place, 
must  depend  upon  considerations  quite  analogous  to  those  which 
have  been  presented  in  the  inquiry  when  a  retired  partner  was  dis- 
charged from  the  liability  of  the  firm,  by  change  of  charge,  or 
credit,  or  account.  The  cases  are  rather  numerous  on  this  point ; 
but  it  is  not  easy  to  draw  from  them  any  general  principles  other 
than  those  which  have  been  already  stated,  (e) 


(c)  Lytb  V.  Ault  &  Wood,  7  Exch.  669. 
Parke,  B.:  "The  plaintiff  agrees  to  take 
the  security  of  one  partner,  instead  of  that 
of  both.  She  is  at  liberty  to  enter  into 
that  arrangement ;  for  the  court  cannot  in- 
quire into  the  value  of  the  consideration. 
If  there  be  any  consideration  whatever,  it 
•will  support  an  agreement.  Now,  although 
lOZ.  would  be  no  satisfaction  for  a  debt  of 
100/.,  yet  an  article  of  much  less  value 
than  10/.  may  be  given  and  received  in 
satisfaction  of  such  a  debt.  It  may,  at 
first,  appear  paradoxical ;  but  the  sole  re- 
sponsibility of  one  of  many  partners  may 
be  of  greater  value  than  that  of  all,  for  you 
may  thereby  obtain  the  secuiity  of  his  real 
and  personal  estate."  Pollock,  C.  B. : 
"The  exchange  may  be  of  great  advantage 
to  the  creditor ;  for  it  may  be  much  more 
desirable  to  have  the  sole  security  of  a  rich 
old  man,  than  the  joint  security  of  the  old 
man,  and  of  a  young  man  without  any 
property."  Thompson  v.  Percival,  5  B.  & 
Ad.  925 ;  Hart  v.  Alexander,  2  M.  &  W. 
484  ;  Kirwan  v.  Kirwan,  2  Cr.  &  M.  617, 
4  Tyrw.  491.  The  authority  of  David  v. 
Ellice,  5  B.  &  C.  196,  7  Dow  &  R.  690, 
and  Lodge  v.  Dicas,  3  B.  &  Aid.  611,  is 
considered  as  greatly  shaken  by  the  later 
authorities.  See  Hart  v.  Alexander,  2  M. 
&  W.  493 ;  Sheehy  v.  Mandeville,  6  Cranch, 


264;  Harris  v.  Lindsay,  4  Wash.  C.  C. 
271.  But  see  Wildes  v.  Fessenden,  4  Met. 
12,  reviewing  the  authorities.  Robb  v. 
Mu^ge,  14  Gray,  534;  Wild  v.  Dean,  3 
Allen,  579  :  Ex  parte  Appleby,  2  Deac. 
482  ;  Ex  parte  Liddiard,  4  Deac.  &  Ch. 
603  ;  Ex  parte  Kedie,  2  Deac.  &  Ch.  312  ; 
Ex  27arfe  Lane,  De  Gex,  300 ;  Ex  parte 
Bradbury,  4  Deac.  202. 

id)  Lyth  V.  Ault,  7  Exch.  669,  siipra, 
note  (c) ;  and  the  opinion  of  Alderson,  B., 
p.  674.  And  see  Andrew  v.  Boughey, 
Dyer,  75  n ;  Thompson  v.  Percival,  5  B. 
&  Ad.  925  ;  Mills  v.  Boyd,  6  Jur.  943  and 
cases  there  cited. 

(e)  Wild  V.  Dean,  5  Allen,  579.  In 
this  case,  Bigelow,  C.  J.,  fully  considers 
the  conflicting  authorities  and  holds  that 
a  partnership  debt  is  not  provable  against 
the  private  estate  of  one  of  the  partners, 
who  has  received  an  assignment  of  all  the 
partnership  property,  and  executed  a  bond 
to  his  retiring  partner  to  assume  and  pay 
the  partnership  debts,  without  evidence  of 
an  express  or  implied  assent  by  him  to  i)ay 
the  same  to  the  creditor  as  his  private 
debt ;  and  that  notice  by  the  creditor  of 
his  election  to  treat  it  as  a  private  debt  is 
not  sufficient.  Robb  v.  Mudge,  14  Gray, 
534  ;  Ex  parte  Whitmore,  3  Mont.  &  A. 
627  ;    Evans  v.    Drummond,   4   Esp.  89  j 


§  389.] 


OF    BANKRUPTCY    AND    INSOLVENCY. 


485 


If  there  be  an  old  indebtedness,  and  a  new  one  for  the  same 
cause,  and  it  is  not  proved  or  presumed  that  the  new  has  paid 
the  old,  then  both  co-exist ;  and,  generally,  in  such  case  the  old 
is  the  principal  debt,  and  the  new  is  collateral  to  and  security 
for  the  old.  The  cases  show  that  the  question  whether  the  old 
debt  is  extinguished  is  sometimes  one  of  much  difficulty  in  prac- 
tice. But,  if  it  be  not  extinguished,  then  it  is  certain  that  the 
creditor  may  give  up  the  new  debt,  and  found  his  claim  only  on 
the  old.  (/)  Jn  this  country,  it  is  a  universal  principle,  recog- 
nized in  all  our  systems  of  insolvency  and  in  the  national 
bankrupt  law,  that  a  creditor  having  a  debt  with  security  may  give 
up  his  security,  and  |)rove  his  whole  debt ;  or  may  obtain  what  he 
can  from  his  security,  and  prove  for  the  balance.  (,^)     This  prin- 


Read  V.  White,  5  Esp.  122;  Bedford  v. 
Denkiu,  2  Stark.  178,  2  13.  &  Aid.  210; 
Lodge  V.  Dicas,  3  H.  &  Aid.  611 ;  Thomp- 
son V.  Purcival,  5  B.  &  A(L  925  ;  Hart  w. 
Ale.xander,  2  M.  &  W.  484. 

(/)  Jix  parte  Roxby,  1  Mont,  on  Pari. 
198.  The  petitioner,  a  joint  creditor,  took 
a  draft  of  the  solvent  partners  upon  a  third 
person.  The  petitioner  applied  to  prove. 
The  proof  was  refused,  unless  upon  deliver- 
ing up  the  draft.  Petition  to  jn'ove.  Lord 
Chancellor  :  "  The  question  is,  whether 
the  bill  was  given  as  a  collateral  secuiity, 
or  in  discharge  of  the  debt ;  as  to  which 
an  athdavit  must  be  made."  Ex.  parte 
Hoilgkinson,  1  Cooi)er,  101  ;  Ex  pirte 
Kendall,  17  Ves.  527.  Lord  Eldon  :  "  In 
many  cases,  the  representative  may  be  en- 
titled to  say  to  a  creditor,  who  chooses  to 
make  the  demand,  that  justice  requires 
the  surviving  partners  to  pay  the  debt  : 
they  are  to  be  considered  the  principals ; 
he  is  merely  a  surety  ;  and  therefore  a 
court  of  equity  would  not  permit  them  to 
call  upon  him  for  payment,  except  upon 
an  equitable  arrangement  and  modification 
rec^uiring  them  to  assign  the  dividend." 
Ex  parte  Seddon,  2  Cox,  49 ;  Ex  parte 
Lobb,  7  Ves.  592  ;  Ex  parte  Hay,  15  Ves. 

4  ;  Ex  parte  Slater,  6  Ves.  146  ;  Evans  v. 
Drummond,  1  B.  &  C.  113;  Reed  v.  White, 

5  Esp.  122;  Thompson  v.  Percival.  5  B.  & 
Ad.  925  ;  Ex  parte  Whitmore,  3  Mont.  & 
A.  627  ;  Oakeley  v.  Pasheller,  10  Bligh, 
548,  4  CI.  &  F.  207. 

{g)  Richardson  r.  Wyman,  4  Gray,  553. 
The  question  was  before  the  court  in  this 
case,   where  the  respondent  held  a  joint 


and  several  note  of  three  persons,  tenants 
in  common,  and  held  also  a  mortgage 
security.  The  petitioners  claimed  that  the 
security  should  first  be  made  available,  and 
the  resj)ondent  be  permitted  then  to  prove 
against  the  insolvent  estate  of  one  of  the 
debtors.  The  court  said  :  "  The  projierty 
of  the  insolvent  debtor,  which  is  pledged 
for  the  payment  of  the  debt,  should  either 
be  applied  to  its  extinguishment,  or  sur- 
rendered to  the  assignees  and  made  part 
of  the  estate  to  be  distributed  among  the 
general  creditors  ;  and  whatever  other 
property  the  creditor  holds  as  security 
ought  also  to  be  appropriated  to  the  pay- 
ment of  the  debt.  This  is  an  equitable 
rule;  which  will  do  justice  to  all  parties. 
It  has  the  sanction,  in  its  spirit,  of  the 
courts  of  chancerv  in  England,  and  has 
been  recognized  and  enforced  in  our  own." 
Lanckton  v.  Wolcott,  6  Met.  305  ;  Amory 
x\  Francis,  16  Mass.  308 ;  In  re  Grant,  5 
Law  Rep.  303  ;  Ex  parte  Baker,  8  Law 
Rep.  461  ;  Eastman  v.  Foster,  8  Met.  19. 
For  English  cases,  see  Ex  parte  Goodman, 
3  Madd.  373  ;  Ex  parte  Parr,  1  Rose,  76, 
18  Ves.  65  ;  Ex  parte  Bennet,  2  Atk.  527; 
Ex  parte  Wildman,  1  Atk.  109  ;  Ex  parte 
De  Tastet,  1  Rose,  323  ;  Ex  parte  Hedder- 
ley,  2  Mont.,  D.  &  D.  487  ;  Ex  parte 
Shepherd,  2  Mont.,  D.  &  D.  204  ;  Ex  parte 
Prescott,  4  Deac.  &  Ch.  23  ;  Ex  parte  Dick- 
son, 2  Mont.  &  A.  99  ;  Ex  parte  Ruffoni, 
1  Glyn  &  J.  41  ;  Ward  v.  Dalton,  7  C.  B. 
643  ;  Ex  parte  Bloxham,  6  Ves.  449,  600  ; 
Ex  parte  Barclay,  1  Glyn  &  J.  272  ;  Ex 
parte  Smith,  3  Bro.  C.  G.  46. 


486 


THE    LAW    OP    PARTNERSHIP. 


[CH.  XV. 


ciple  has  not  been  applied  to  the  case  of  a  creditor  of  a  ))artiier, 
holding  the  liability  of  the  firm  as  collateral  security.^  The  sim- 
plest course  would  be,  that  the  creditor  should  prove  against  the 
firm,  and,  deducting  his  dividend,  then  prove  for  the  balance 
against  the  partner  ;  but  a  difficulty  in  the  way  of  such  procedure 
leads  to  a  doubt  whether  it  would  be  permitted.  (//) 

§  390.  Proof  upon  Joint  and  Several  Claim.  — We  have  supposed 
the  indebtedness  to  be  such  that  the  liability  of  tiie  firm  and  that 
of  the  partner  cannot  be  called  concurrent.  Perhaps  they  would  be 
so  deemed ;  and  if  they  were,  in  fact  or  by  construction,  such 
that  the  creditor  need  not  consider  the  one  as  principal,  and  be 
limited  in  his  claim  in  the  other,  as  he  would  be  in  a  case  of 
strict  guaranty,  —  then  it  seems  to  be  settled  in  England,  although 
not  without  some  doubt  and  objection  of  great  weight,  that  the 
creditor  can  only  elect  to  proceed  against  one,  (t)  and  abandon 
his  claim  against  the  other  party.     In  fewer  words,  if  a  creditor 


(A)  Agawam  Bank  v.  Morris,  4  Cush. 
99.  A  partnership  note  having  been  in- 
dorsed by  the  paj-ee  to  a  third  person,  and 
by  him  indorsed  to  and  discounted  at  a 
bank  of  which  he  was  president,  and  one 
of  the  promisors  having  afterwards  become 
insolvent,  the  bank  proved  the  note  as  a 
claim  against  his  estate.  The  solvent  prom- 
isor afterwards,  at  the  request  of  the  second 
indorser,  and  for  the  purpose  of  securing 
him  and  the  bank,  but  without  the  knowl- 
edge of  the  bank,  gave  him  security  ap- 
plicable to  the  note  in  question,  and  also 
to  another  note  held  by  the  bank  ;  such 
indorser  promising  to  account  to  the  prom- 
isor for  the  surplus  of  the  security,  if  any. 
It  was  held,  that  the  security  was  not  given 
to  the  bank,  but  was  a  personal  one  to  the 
second  indorsee,  and  to  indemnify 'him  as 
such ;  and  that  a  subsequent  order  of  the 
commissioner,  on  the  motion  of  the  as- 
signee, directing  the  note  to  be  struck  out 
of  the  list  of  claims  ])roved,  and  disallow- 
ing the  same,  on  the  ground  that  the  bank 
held  collateral  security  therefor  which  had 
not  been  surrendered  or  applied,  was  er- 
roneous. See  also  Barclay  v.  Phelps,  4 
Met.  397. 

(i)  Ex  parte  Bevan,  9  Ves.  222.  Lord 
EldoD  :  "  It  is  not  necessary  to  decide  the 
other  question  as  to  the  joint  and  several 


proof.  If  it  was,  I  am  not  perfectly  sat- 
isfied with  the  authority  that  has  been 
stated.  The  reasoning  goes  upon  this  : 
that  a  joint  and  separate  action  could  not 
be  brought  at  law.  But  surely  the  dis- 
tinction IS  this,  that,  where  a  joint  and 
separate  bond  is  given,  and  another  secur- 
ity, several  from  each,  there,  as  two  actions 
might  be  brought,  the  rule  in  bankruptcy 
should  be  ditferent.  I  think  I  have  heard, 
that,  in  the  case  cited  iu  Pearce  v.  Wil- 
liams, the  only  separate  creditor  was  he 
who  took  out  the  commission  ;  and  it  ap- 
pears, by  the  book,  that  the  joint  creditors 
prayed  that  he  might  deliver  over  to  them 
the  effects  ;  which  was  refused  ;  and  it 
was  said  that  he  should  have  the  effects 
applied  to  his  separate  bond  :  and,  if  that 
is  the  case,  the  rule  is  quite  right ;  for  he 
would  have  a  right  to  take  the  separate 
effects,  if  not  to  the  detriment  of  other 
separate  creditors."  And  in  the  same  case, 
10  Ves.  107,  Lord  Eldon  again  says:  "  The 
principle  seems  obvious  ;  yet  in  bank- 
rujitcy,  for  some  reason  not  very  intelli- 
gible, it  has  been  said  the  creditor  should 
not  have  the  benefit  of  the  caution  which 
he  has  used.  I  never  could  see  why  a 
creditor,  having  both  a  joint  and  a  several 
security,  should  not  go  against  both  estates. 
But  it  is  settled  that  he  must  elect." 


Ante,  §  386. 


§390]  OF    BANKRUPTCY    AND    INSOLVENCY.  487 

can  elect,  he  must  elect.  The  supposed  analogy  to  a  rule  of  law- 
is  surely  insullicient  for  this  doctrine,  and  it  has  not  been  estab- 
lished in  this  country.^  Lord  Eldon  appears  to  think  that, 
aside  from  authority,  if  a  creditor  gets  the  security  of  a  partner, 
and  also  the  security  of  a  firm  for  the  same  debt,  by  a  valid  con- 
tract, there  is  no  reason  why  lie  may  not  prcjve  against  both,  in 
the  same  way  as  if  they  were  different  and  distinct  persons,  (y) 

(/  )  The  case  alluded  to  by  Lord   Eldon,  then  he  would  have  received  more  than  his 

as  (juoted  in  the  pnivious  note,  is  Ex  parte  share."     And,  notwithstanding  the  doubts 

Rowlaiidson,  3  1'.  Wins.  405.     "  The  Lord  of  Lord  Eldon  and  other  high  authorities, 

Chancellor    (Talbot)    at    first    inclined    to  the  rule  is  now  firmly  established  in  Eng- 

tliink  tiiat  the  |)etitionfr,  being  a  joint  and  land,  that,  where  there  is  a  joint  and  several 

a  separate  creditor,  ought  to  be  at  liberty  creditor,  he  must  make  his  election  whether 

to  come  in  under  each  of  the  commissioners,  he   will  come   in  upon  the  joint   or  the 

provided  he  i-eceived  but  a  single  satisfac-  separate   estate  ;    that  is,   which    he   will 

tion  ;  but  the  next  day  his  lordship  held,  come  in  ujion,  in  preference  ;  for,  which- 

that,  as  at  law,  when  A.  and  B.  are  bound  ever  he  may  elect,  he  will  be  entitled  to 

jointly  and  severally  to  J.  S.,  if  J.  S.  sues  come  in  upon   the  surplus  of  the  other,  if 

A.  and  B.  severally,  he  cannot  sue  them  there  should  be  any.    £x  parte  Hlaiikenha- 

jointly ;  and,  on   the  contrary,  if  he  sues  gen,  Cooke's  B.  L.   257;    Ex  parte  Butlin, 

them  jointly,  he  cannot  sue  them  severally,  id.  ;  Ex  parte  Banks,  1  .-Ytk.  106  ;  Ex  pmrte 

but  the  one  action  may  lie  {)leaded  in  abate-  Bond,  1  Atk.  98;    Ex  parte  Smith,  1  P. 

nient  of  the  other.     (But,  as  to  this,  see  Wms.  237  ;  .£x /jarte  Masson,  1  Rose,  159; 

Lechmere  v.   Fletcher,    1   Cr.   &  M.  636.)  Ex  parte  Liddel,   2   Rose,    34;    Ex  parte 

So,  by  the  same  reason,  the  petitioner  in  Bank  of  England,   2  Rose,  82;    E- parte 

the  present  case  ought  to  be  put  to  his  Husband,  2  Glyn  &  J.  4,  5  Madd.  419;  Ex 

election  under  which  of  the  two  commis-  parte  Moult,  Mont.  337;  Ex  parte  Cheva- 

sious  he  would  come ;  and  that  he  should  lier,  1  Mont.  &  A.  345  ;  Ex  parte  Hinton, 

not  be  permitted  to  come  under  both,  for  1   De  Gex,    550 ;   Ex  parte   Ladbroke,  2 

1  Upon  a  joint  and  several  note  of  the  firm  and  the  partners,  that  is,  a  note  signed 
with  the  firm  name  and  by  each  partner  individually,  proof  may  in  this  country  be 
made  against  the  separate  estates  of  the  [lartners,  as  well  as  against  the  joint  estate. 
/((.  re  Bigelow,  3  Ben.  146;  Ex  parte  Nason,  70  Me.  363;  In  re  Gray's  Estate,  111 
N.  Y.  404,  18  N.  E.  719  ;  Fowlkes  v.  Bowers,  11  Lea,  144.  But  see  Fayette  Nat. 
l^ank  V.  Kenney,  79  Ky.  133,  where  it  was  said  that  the  holder  of  the  note  must  elect 
between  the  joint  estate  and  the  separate  estates. 

In  the  same  way  where  the  firm  and  a  partner  are  parties  successively  liable  on 
commercial  paper  (as,  for  instance,  maker  and  indorser  of  a  note),  proof  ma}'  be  made 
against  both  estates.  In  re  Farnum,  6  Law  Rep.  21  ;  Mead  v.  Nat.  Bank,  6  Blatch. 
189  ;  Claflin  v.  Behr,  89  Ala.  503,  8  So.  45  ;  Union  Nat.  Bank  v.  Bank  of  Commerce, 
94  111.  271  ;  Borden  v.  Cuyler,  10  Cush.  476  (acmble).  Compare  however.  In  re 
Blunier,  13  F.  R.  622,  where  it  was  held  tiiat  a  guaranty  of  a  firm  debt  by  a  |)artner, 
being  a  guaranty  of  his  own  debt,  had  no  meaning,  and  gave  the  other  creditor  no 
right  against  his  sejiarate  estate. 

The  rule  in  England  at  common  law  was  different,  as  has  been  stated  in  the  text, 
There  the  holder  of  a  joint  and  several  obligation  must  elect  whether  to  proceed 
against  the  firm  or  the  individual  partners.  Supra,  note  (i)  ;  Ex  parte  Bevan,  10 
Ves.  107  ;  Ex  parte  Barnewall,  6  De  G.  M.  &  G.  795.  See  Ex  parte  Adamson,  8  Ch. 
D.  807  (C.  A.)  And  the  same  was  true  as  to  successive  parties  on  commercial  paper, 
Goldsmid  v,  Cazeuove,  7  H.  L.  Cas.  785.     See  Ames,  Cas.  on  Part.,  p  348,  note. 


488  THE   LAW    OF   PARTNERSHIP.  [CH.  XV. 

§  391.  Joint  but  not  Partnership  Creditors.  —  [It  has  bceil  secn  ^ 
that  joint  but  not  partnership  creditors  of  the  partners  may  attach 
the  partnership  [)roperty  and  hold  it  even  against  partnership 
creditors.  It  would  be  natural  to  suppose  that  the  same  rule 
would  apply  in  bankruptcy :  and  that  the  joint  creditors  of  the 
partners  would  share  in  the  partnership  assets.  Such  api)ears 
to  be  the  rule  in  England.^  But  in  this  country  joint  but  not 
partnership  creditors  of  the  partners  come,  with  the  individual 
creditors,  on  the  separate  assets  of  the  partners.^] 

§392.  What  Property  is  joint  and  what  several.  —  It  is  also 
important  to  determine  what  constitutes  the  fund  appropriated 
to  one  class  of  creditors,  and  what  that  of  the  other  class  ;  or, 
to  ascertain  what  is  joint  property  and  what  is  several  property. 
Questions  of  fact,  or  even  of  law,  as  to  the  ownership  of  certain 
goods,  or  effects,  or  lands,  are  usually  to  be  determined  by  the  gen- 
eral principles  of  the  law  of  contracts,  or  the  law  of  property.  But 
those  which  are  peculiar  to  the  law  of  partnership,  or  arise  out  of 
its  relations,  are  also  of  much  importance. 

It  seems  to  be  held  that  if  a  partner  takes  property  from  the 
firm,  even  in  good  faith,  and  bankruptcy  ensues,  and  the  ques- 
tion arises,  which  class  of  creditors  has  the  benefit  of  this 
property,  it  will  be  held  to  satisfy  any  balance  due  from  that  part- 
ner to  the  firm,  and  thus  to  increase  the  fund  of  the  joint  creditors, 
and  the  several  creditors  have  only  the  surplus.'*  As  a  general 
principle,  this  may  rest  upon  sufficient  reasons ;  for  a  partner 
should  not  be  permitted  to  withdraw  his  share  from  the  capital 
stock,  and  in  this  way  assist  his  several  creditors  at  the  expense 
of  the  joint  creditors.  But  the  principle,  or  the  rule,  should  not 
be  extended  to  cases  in  which  chattels  were  appropriated  long 
ago  to  one  partner,  or  bought  by  him  with  money  taken  from  the 

Glyn  &  J.  81  ;  Ex  parte  Bate,  3  Deac.  358 ;  778.      But    where    the    contract    is    for 

Ex  parte  Smith,  1  Deac.  385  ;  Ex  parte  double    security    against    distinct    firms. 

Hill,  3  Mont.  &  A.  175  ;  Ex  parte  Clarke,  though   consisting    of   the    same    indivi- 

1  De  Gex,  153 ;  Ex  parte  Wood,  1  DeGex,  duals,  the  creditors,  if  ignorant  of  their 

134  ;    Ex  parte  Banks,  2  Jones  &  La  T.  connection,  may  prove  against  both.     Ex 

212;  Ex  parte  Lane,  1  De  Gex,  300;  Ex  parte  Bevan,  10  Ves.   109,   note  to  Sum- 

parte  Arbonin,  1  De  Gex,  359  ;    Ex  parte  ner's  ed.     And  see  Ex  parte  Adam,  1  Ves. 

Hay,  15  Ves.  4 ;  Ex  parte  Adam,  1  Ves.  &  &  B.  493,   2   Eose,  36 ;  Ex  parte  Bigg,  2 

B.   493,    2  Rose,  36;    Ex  parte  Bigg,    2  Rose,  37  ;  ^x  jaarte  La  Foret,  Cooke's  B.  L. 

Rose,  37;  Ex  parte  Gray,  4  Deac.  &  Ch.  251;  Ex  parte  Walker,  1  Rose,  441. 

i  Ante,  §  248,  note  1. 

2  Hoare  v.  Oriental  Bank,  2  App.  Cas.  589. 

3  Forsyth  v.  Woods,  11  Wall.  484;  In  re  Nims,  16  Blatch.  439  ;  In  re  Holbrook,  2 
Low.  259  ;  Ex  parte  Weston,  12  Met.  1  ;  Dnnnica  v.  Clinkscales,  73  Mo.  500  ;  Second 
Nat.  Bank  v.  Burt,  93  N.  Y.  233  ;  Wall  v.  Fife,  37  Pa.  394. 

*  See  ante,  §  248,  note  1. 


§  393.]  OP   BANKRUPTCY    AND    INSOLVENCY.  489 

firm,  when  the  goods  or  money  were  duly  charged  to  and  allowed 
by  liira.  If  tlie  rule  were  applied  to  such  cases,  a  partner  could 
have  no  several  property,  or  it  would  be  so  mixed  up  with  that 
which  would  be  restored  to  the  joint  fund  that  no  line  of  separa- 
tion could  be  found.  Indeed,  it  seems  to  be  limited  to  those  cases 
in  which  certain  specific  property  has  been  taken  out,  which  has 
been  identified,  and  may  be  specifically  restored.  Even  here, 
however,  the  rule  must  be  qualified,  or  rather  another  rule 
substituted,  which  may  be  drawn  from  the  true  principles  of  the 
case,  {k} 

§  393.  Effect  of  Appropriation  of  Property.  —  It  cannot  be 
doubted  that  partners  may  agree  in  their  original  articles  as  to 
what  property  shall  l)elong  to  one  or  another  in  case  of  dissolu- 
tion ;  or  tliat  they  may  so  agree  subsequently  to  the  formation  of 
the  partnership ;  or  that  they  may  so  agree  in  reference  to  the 
present  and  immediate  several  ownershij)  of  articles  of  joint  prop- 
erty, at  any  time  or  in  any  way  they  please;  with  tiiis  limitation 
only,  that  the  agreement  must  be  made  in  good  faith,  and  there- 
fore must  not  be  made  in  contemplation  of  bani<ruptcy.  The 
same  power  and  right  exist  in  relation  to  choses  in  action  ;  any 
division  or  appropriation  of  these,  by  indorsement  of  negotiable 
paper,  or  assignment  of  debt,  or  otherwise,  must  be  lawful  and 
effectual,  with  only  the  same  limitation.  (0  And  if  a  partner 
owns  in  this  way,  or  in  any  other  way,  land  or  personalty,  his 
right  and  interest  cannot  be  affected  by  permitting  the  partner- 
ship to  use  or  emijloy  his  proj)erty,  upon  any  terms  satisfactory 
to  them,  always  within  the  limitation  that  the  whole  transaction 
was  in  perfect  good  faith.  And  the  converse  of  all  this  must  be 
equally  true  ;  that  is,  partners  may  transfer  to  the  firm,  either 
realty  or  personalty,  choses  in  possession  or  choses  in  action,  and 
the  use  or  employment  by  a  partner  of  the  thing  so  owned  by  the 

(k)  In  Ex  parte  Smith,  1  Glyn  &  J.  74,  (0  Ex  parte  Lodge,  1  Ves.  Jr.  166  ;  Ex 

it  was  held,  that  if  one  partner  be  intrusted  parte  Harris,  2  Ves.  &  B.   213;  Ex  parte. 

with  the  entire  management  of  .the   part-  Yonge,  3  A^es.  &  B.  34;  Ex  parte  Reeve, 

nership  concern,  and  he  withdraw  moneys  9  Ves.  589  ;  Ex  parte  Smith,  6  Madd.  2 

for  his  separate  use,  which  he   duly  and  s.   c,  semble,   1  Glyn  &  J.   74.     See  also 

openly  enters   in  the   partnership   books,  notes  3   and  4  to    Hankay  v.   Garratt,    1 

this  is  not  a  fraud  which  will  entitle  the  Ves.  Jr.  241  (Sumner's  ed.)  ;  Anderson  v. 

joint  estate  to  prove  against  the  separate  ;  Maltby,  4  Bro.  C.  C.  423,  2  Ves.  Jr.   244 ; 

otherwise,  if  by  the  entries  in  the  books  Parker  v.  Ramsbottom,   3  B.  &    C.    257 ; 

he   disguises   the   transaction,    or   wholly  Ex  parte  Carpenter,  1  Mont.  &  McA.   1  ; 

omits  and  conceals  it.     Ex  parte  Lodge,  1  Ex  parte  Peake,  1   Madd.  346 ;  Lingen  v. 

Ves.  Jr.   166;    M'Cauley  v.   M'Farlane,  2  Simpson,    1    Sim.    &   St.    600;    Ex  parte 

Desaus.  Ch.  239  ;  Ex  parte  Gust,  1  Cooke's  Turner,  4  Deac.  &  Ch.  169,  177. 
B.  L.  548, 


490  THE    LAW    OF    PARTNERSHIP.  [CH.  XV. 

firm  cannot  affect  the  interest  or  diminisli  the  rights  of  the  firm, 
—  always,  we  repeat,  within  the  limitation  of  the  entire  honesty 
of  this  transfer  and  this  use,  and  its  complete  independence  of  all 
bankruptcy,  or  expectation  of  bankruptcy,  (w) 

§  394.  Claim  of  one  Estate  on  the  other  because  of  Fraud.  —  If, 
after  such  apj)ropriatious  have  taken  place,  bankruj)tcy  ensues,  it 
will  raise  the  question  of  their  effect.  We  think  the  true  answer 
must  be,  that  the  question  of  their  original  validity  comes  first. 
To  determine  this,  we  must  inquire  whether  anything  of  fraud, 
actual  or  constructive,  entered  into  the  transaction ;  was  bank- 
ruj)tcy  contemplated  ;  or  was  it  so  near  that  it  ought  to  have 
been  contemplated ;  (w)  or  are  there  any  other  circumstances  to 
indicate  that  the  transaction  was  something  else  than  an  honest 
transfer  of  property,  by  those  who  had  a  right  to  transfer,  to 
those  who  had  a  right  to  receive  it.  If  the  original  transaction 
was  wholly  free  from  any  taint  of  this  kind,  we  cannot  see  any 
sound  principle  in  the  law  of  partnership,  or  in  the  law  of  bank- 
ruptcy, which  should  interfere  with  the  consequences  of  the 
transfer.  And  therefore  the  property  would  remain  within  the 
joint  fund,  or  in  the  several  fund,  accordingly  as  it  had  been 
placed  by  the  transfer  in  one  or  in  the  other.  We  should  exjjress 
the  general  rule  thus:  If  the  firm  and  all  the  partners  are  bank- 
rupt, no  separate  estate  of  a  partner  can  claim  against  the  joint 
estate,  nor  the  joint  estate  against  any  sej)arate  estate,  until  all 
the  creditors  to  whom  the  fund  is  primarily  appropriated  are  paid 

(//?)  Ex  -parte  Ruffin,  6  Ves.   119;  Ex         [n)  It  is  the  prevaiUiig  rule,  conforni- 

■parte    Freeman,    Buck,    471 ;     Ex   parte  ably   to   the    usual  ])hiaseology  of  hank- 

Peake,  1  Madd.  346,  589;  Ex  -parte  Fry,  rujit  and  insolvent  laws,  that  a   convey- 

1  Glyn  &  J.   96  ;  Campbell  v.   Mullett,  2  ance,    in    order  to   constitute   preference, 

Swanst.  575;  Ex  parte  Williams,  11  Ves.  must  be  in  actual  contemplation  of  legal 

3;   Ex  parte    Rowlandson,    1   Rose,  416;  bankruptcy  or  insolvency.     Thus,  in  Eng- 

Ex  parte   Fell,   10  Ves.    347 ;    Ex  parte  land,   it  is   said,    that  the   law  does   not 

Hare,    2    Mont.    &    A.    478 ;    Ex    parte  avoid  a  conveyance,  made  under  ciicum- 

Hunter,   2  Rose,  382;  Ex  parte  Jaclsson,  stances  in   which  the   party  may   "hojie 

1  Ves.  131;  Ex  parte  Burn,  1  Jae.  &  W.  that   his    affairs    would    rally   and    come 

378;    Ex  parte   Jones,  4    M.    &  S.   450;  round  again."     Green   v.  Bradfield,    1    C. 

Ex  parte  Yallop,   15   Ves.    60;   Ex  parte  &  K.  454,  per  Tindal,  C.  J.     It  must  be 

Houghton,  17  Ves.  252;  Horn  %■>.  Baker,  an  act  that  not  only  in  effect  contravenes 

9  East,  215  ;    Ex  parte  Perry,  5  Ves.  575 ;  the  bankrupt  laws,  but  it  must  be   done 

Ex  parte  Watkins,  1  Mont.  &  McA.  57.  with  intent  to  contravene   them,  and  in 

But  all  the  partners  of  an  insolvent  part-  contemyilation    of  bankruptcy.       Hilliard 

lu^rship  cannot  assign  the  property  of  the  on    Bankr.     329 ;    Fidgeon    v.   Sharp,     1 

firm  to  pay  the  debts  of  one   individual  Marsh.  198,  per  Gibbs,  C.  J. ;  Phcenix  ;■. 

partner.     Wilson  v.  Robertson,  21  N.  Y.  lugraham,  5  Johns.  412.     And  see  Pear- 

587;    Keith    v.    Fink,    47    111.    272.     See  sail  v.   McCartney,  28   Ala.  110;  Cole  v. 

also  Nat.  Bank  v.  Sprague,  20  N.  J.  Eq.  Albers,   1   Gill,  412  ;  Jones    v.    Howland, 

13.     [See  §  248,  note  1.]  8  Met.  377. 


§  395.] 


OF   BANKRUPTCY    AND    INSOLVENCY. 


491 


in  fuil  with  interest,  (o)  But  if  any  property  appears  in  eitlier 
of  these  estates,  wliich  has  been  framhilently  abstracted  from  any 
other,  it  must  be  restored  ;  and  tliis  fraud  may  be  constructive 
only,  and  any  act  wouhl  be  so  which  violated  the  articles  or  agree- 
ment of  the  partners,  or  abstracted  or  appropriated  property  or 
funds  by  the  act  of  one  partner  only,  without  the  authority,  con- 
sent, or  knowledge  of  the  others,  (jt?)  Whether  partnership 
assets  are  subject  to  the  exemption  or  homestead  rights  of  a 
partner  is  not  certain  on  authority.  We  should  say,  on  general 
principles,  they  are  not.  But  it  might  depend  somewhat  on  the 
language  of  the  statutes  creating  those  rights.  ( pp) 

§  395.  "  Statute  of  Reputed  Ownership."  —  The  English  "  statute 
of  reputed  ownership,"  as  it  is  commonly  called,  contains  provi- 
sions which  bear  upon  this  question.  Qf)  It  enacts  that  goods 
which  at  the  time  of  the  bankruptcy  are  in  the  possession,  order, 
and  disposition  of  the  bankru[)t,  as  reputed  owner  thereof,  by 
consent  of  the  true  owner,  shall  be  distributable  as  the  property 


(o)  Per  Lord  Lough  bo  rongli,  Ex  jiarte 
Elton,  3  Ves.  242  ;  Twiss  v.  Massey,  1 
Atk.  67  ;  Ex  jmrte  Cook,  2  P.  Wms.  500  ; 
Ex  parte  Abfll,  4  Ves.  837  ;  Ex  parte 
Clay,  6  Ves.  833;  Bolton  v.  Puller,  1  B. 
&  P.  539-545.  And  see  //(.  re  Rowland, 
L.  R.  1  ( 'h.  421 ;  Rolte  v.  Flower,  L.  R.  1 
J'.  C.  27. 

(p)  In  re  Lodge,  1  Ves.  Jr.  165;  Ex 
parte  Harris,  1  Rose,  129,  437,  Lord 
Eldon  :  "  I  take  it  now  to  be  neces-sary, 
attending  to  the  result  of  Lord  Thurlow's 
decisions,  In  re  Lodge,  and  the  other 
cases,  that,  in  order  to  establish  a  right 
of  proof  for  the  joint  estate  against  the 
separate  estate  or  for  the  separate  estate 
against  the  joint  estate,  it  must  be 
made  out  that  the  money  was  taken  im- 
properly and  fraudulently.  In  this  sense, 
improperly  and  fraudulently,  that  it  was 
taken  against  the  contract  between  the 
parties,  express  or  implied  •  or  as  against 
an  individual  partner,  to  increase  his  pri- 
vate estate.  I  have  oftener  than  once 
expressed  my  confirmation  of  that  opin- 
ion, that  those  circumstances  would,  in  a 
legal  sense,  constitute  fraud.  Cases  of 
this  kind,  however,  must  be  decided  upon 
their  particular  circumstances;  and  the 
conclusion  of  law  as  to  fraud  must  depend 
upon  the  nature  of  those  circumstances." 
Ex  parte  Smith,  1  Glyn  &  J.  74  ;  Ex  parte 
VVatkins,  1  Mont.  &  McA.  57. 


( VP  )  Whether  a  partner  can  claim 
homestead  and  exemption  rights  out  of 
partnership  assets,  is  a  much  debated  and 
quite  unsettled  question.  That  he  can, 
see  Stewart  v.  Brown,  37  N.  Y.  350; 
Servant  v.  Rusk,  43  Gal.  235 ;  In  re  Rich- 
ardson, 11  N.  B>.  R.  114;  Bonsall  v. 
Comly,  44  Pa.  442.  That  he  cannot,  see 
Pond  V.  Kimball,  101  Mass.  105  ;  Amph- 
lett  V.  Hubbard,  29  Mich.  298;  Clegg  v. 
Houston,  1  Phila.  352  ;  Wright  v.  Pratt, 
31  Wis.  99;  Burns  v.  Harris,  67  N.  C. 
140;  In  re  Blodgett,  10  N.  B.  K.  145; 
Till's  Case,  3  jSTeb.  261  ;  Gaylord  v. 
Imhoff,  26  Oh.  St.  317;  In  re  Brothroyd, 
14  N.  B.  R.  323;  In  re  Croft,  8  Biss.  188. 
A  retiring  partner  from  an  insolvent  firm 
cannot  take  any  money  with  him  ;  and  if 
he  do,  and  place  it  in  a  homestead,  equity 
will  take  it  for  the  benefit  of  the  firm's 
creditors.  In  re  Santhotf,  16  N.  B.  R. 
181.     [See  ante,  §  252.] 

iq)  This  statute,  6  Geo.  4,  c.  16,  §  3, 
provides  that  a  fraudulent  conveyance, 
"  within  this  country  or  elsewhere," 
should  constitute  an  act  of  bankruptcy. 
This  language  was  used  to  meet  a  decision 
under  previous  statutes  (Ingliss  v.  Grant, 
5  T.  R.  530),  that  a  conveyance  made  in 
India  by  one  residing  there,  though  trad- 
ing with  England,  could  not  constitute  au 
act  of  bankruptcy. 


492  THE   LAW   OF   PARTNERSHIP.  [CH.  XV. 

of  the  bankrupt  among  his  creditors.  This  statute  was  first 
enacted  in  the  reign  of  James  I.,  and  has  been  confirmed  by 
6  Geo.  4.  The  statute  of  James  was  never  adopted  in  this 
country,  as  we  had  no  bankrupt  law  here  until  after  our  inde- 
pendence. Nor  is  there  a  similar  provision  in  our  bankrupt  law. 
It  is  ))lain,  however,  that  the  principle  of  this  statute  is,  to  a  con- 
siderable extent,  one  of  common  law  ;  and  its  pui-pose  is  one 
which  might  in  many  cases  be  asserted  by  a  coui't  of  equity, 
without  any  special  statute,  (r)  Indeed,  this  principle  is  the 
same  with  that  which  holds  a  person  as  a  partner  who  has  been, 
with  his  own  consent,  held  out  as  one.  For  such  a  person  is  so 
held  because  the  creditors  of  the  firm  trusted  the  firm  on  the 
credit  of  his  membership,  or,  in  other  words,  trusted  him ;  and 
did  this  by  his  permission  and  authority.  («)  If,  therefore,  this 
person,  instead  of  permitting  himself  to  be  held  out  as  a  part- 
ner, permits  his  property  to  be  held  out  as  the  property  of  the 
firm,  and  as  forming  a  part  of  the  foundation  on  which  its  credit 
rests,  the  very  same  reason  which  held  him  personally  in  the  first 
case,  with  all  his  property,  would  now  hold  that  part  of  his  prop- 
erty so  permitted  to  appear  as  the  property  of  the  firm.  We 
cannot,  therefore,  doubt  that  equity  would  decide  such  a  case  very 
much  in  accordance  with  the  general  purpose  of  this  law,  although 
we  doubt  whether  any  court  would,  in  this  country,  without  the 
direction  or  authorization  of  a  statute,  carry  this  principle  so 
far  as  it  has  been  applied  in  some  cases,  under  the  statute,  in 
England.  (0 

§  396.   Actual  Fraud  not  requisite.  —  In   the  cases  under  this 
statute,  (m)  it  has  been  repeatedly  held  that  property  passed  in  this 

(r)  Storrs  v.  Barker,  6  Johns.  Ch.  166  ;  v.  Crosby,  5  Esp.  199  ;  Mrlver  v.  Ilumhle, 

Wendell  v.  Van  Rensselaer,   1  Johns.  Ch.  16  East,   174 ;  Smith  v.  Watson,  2  B.  & 

344  ;  East  India  Co.  v.  Vincent,  2  Atk.  83;  C.  411 ;  Waugh  v.  Carver,  2  H.  Bl.  235  ; 

Hanning  v.  Ferrers,  1  E(i|.  Cas.  Abr.  356,  De  Berkom  v.  Smith,  per  Lord  Kenyon, 

pi.   10;   Gilbert's   Eq.   Cas.   83;    Raw    v.  1  Esp.  29. 

Potts,    Free,    in    Ch.    35;    Hunsden    v.  (<)  The  cases  in  equity  collected  in  our 

Cheyney,  2  Vern.  150 ;  Styles  v.  Cowper,  notes  may  perhaps  go  no  further  than  to 

3  Atk.  692 ;  Jackson  v.  Cator,  5  Ves.  688  ;  hold,  that,  where  the  real  owner  of  the 

Dann   v.  Spurrier,    7  Ves.    231  ;   Raw  v.  property  stands  by  and  virtually  assents 

Pole,  2  Vern.  239.     In  the  application  of  to  its  sale  by  the  reputed  owners,  it  is  a 

this  principle,  at  common  law,  see  Pickard  fraud  on  the  purchaser,  and  the  real  owner 

V.  Sears,  6  A.   &  E.  469,  474  ;  Heane  v.  is  estopped  from  subsecjuently  setting  up 

Rogers,  9  B.  &  C.  586 ;  Graves  v.  Key,  3  title.     This  would  be  the  rule  here.     The 

B.  &  Ad.  318,  a.  principle    is   well    stated    by   Chancellor 

(s)  Spencer   v.  Billing,    3  Camp.  310;  Kent,  in  Storrs   v.  Barker,  6  Johns.  Ch. 

Parker  v.  Barker,  1  Br.  &  B.  9,  3  Moore,  168. 

226;   Ex  parte  Langdale,   18    Ves.    301;  {u)  By  Stat.  6  Geo.  4,  ch.  16,  §  72,  it 

Guidon  v.  Robson,  2  Camp.  302;  Parsons  is  enacted,  "that  if  any  bankrupt,  at  the 


§  397.]  OF    BANKRUPTCY   AND    INSOLVENCY.  493 

way  to  tlic  credit(jrs  of  the  firm,  although  there  was  no  imputa- 
tion of  fraud  upon  the  actual  owner.  He  may  have  had  excellent 
reasons  for  placing  his  property  in  the  possession  or  at  the  dis- 
posal of  the  firm:  the  only  inipiiry  was,  Has  he  done  so?  for,  if 
he  has,  he  has  placed  it  within  reach  of  the  creditors  of  the 
firm,  (v)  We  do  not,  however,  see  that  at  common  law,  or  in 
equity,  there  needs  to  he  actual  fraud,  any  more  than  in  the 
analogous  case  of  one  held  personally  a  partner  because  he  per- 
mits himself  to  be  so  held  out.  If,  for  any  reason  whatever,  he 
permits  his  property  to  enlarge  the  credit  of  the  firm,  either  he 
intends  that  it  shall  be  liable  for  the  debts  contracted  on  that 
credit,  or  he  does  not.  If  he  so  intends,  there  is  no  fraud  of  any 
kind ;  and  the  law  accepts  his  intention  and  will  carry  it  into 
effect.  If  he  does  not  so  intend,  then  he  commits  a  constructive 
fraud  upon  the  creditors  ;  and  the  law,  or,  if  law  cannot,  equity, 
will  give  to  those  creditors  the  benefit  of  that  property.  (?6') 

§  397.  Effect  of  statute  on  Retiring  Partners.  —  The  important 
consequences  of  the  statute  in  England  fall  upon  retiring  part- 
ners, and  especially  upon  retiring  dormant  partners,  who  leave 
their  property  in  the  possession  or  at  the  disposal  of  the  firm. 
And  it  is  obvious  that  these  are  the  parties,  of  all  others,  upon 

time  he  becomes  bankrupt,  shall,  by  con-  Storer  v.  Hunter,   3   B.   &  C.   368  ;    Ex 

sent  and   permission   of    the   true   owner  parte  Arbonin,  1  De  Gex,  359  ;    Ex  ])arte 

thereof,  have  in  his  possession,  order,  or  Lawrence,  1  De  Gex,  269  ;  Ex  parte  Castle, 

disposition,  any  goods  or  chattels  whereof  3  Mont.  D.  &  D.  117  ;    Ex  parte  Burn,  I 

he  was  reputed  owner,  or  whereof  he  had  Jac.  &  W.  378  ;    Ex  parte  Jones,  4   M.  & 

taken  upon  him   the   sale,   alteration,  or  S.   450,   overruling  Ex  jmrte   Yallop,   15 

disposition,  as  owner,   the  commissioners  Ves.  60,  and  Ex  parte  Houghton,  17  Ves. 

shall  have  power  to  sell  and  dispose  of  the  252.     See  also  Robinson  v.  McDonnell,  5 

same,    for  the   benefit   of    the    creditors,  M.   &  S.  228  ;    Hay  v.  Fairbairn,  2  B.  & 

under    the    commission  ;     provided    that  Aid.  193  ;  Monkhouse  v.  Hay,  2  Br.  &  B. 

nothing  herein  contained  shall  invalidate  114  ;   Kirkley  v.  Hodgson,  1   B.  &  C.  580. 

or  affect  any  transfer  or  assignment  of  any  By  the  statute  6  Geo.  4,  exception  is  now 

ship  or  vessel,"  &c.     By  section  1st  of  this  made  in  case  of  ships, 
statute,  the  statute  21  Jac.   1,  ch.  19,  is  (;/•)   Independently  of  any  consideration 

repealed  ;  but  the  11th  section  of  the  stat-  of  bankruptcy,  it  is  a  general  rule  of  law 

.  ute  of  James  is  re-enacted  by  the  72d  sec-  that  all  secret  sales  and  transfers  of  per- 

tion   of  the  rejiealing  statute,    almost  in  sonal  chattels,  unaccompanied  by  posses- 

totidein  verbis.     The  adjudged  cases,  there-  sion,  are  at  least  primd  facie  fraudulent 

fore,  which  were  decided  with  reference  to  and  void  as  against  creditors  ;    since  the 

the  statute  of  James,  are  equally  applicable  effect  of  them  is  to  enable  a  party  to  gain 

to  the  statute  of  Geo.  IV.  a  false  credit  from  the  world.     1  Deacon 

(«)  Horn   V.  Baker,  9  East,   218  ;    Ex  B.  L.  406  ;    Hoffman  v.  Pitt,  5  Esp.  25  ; 

parte  Fell,  10  Yes.  348  ;    Ex  parte  Row-  Eastwood  v.   Brown,   1  Ryan  &  M.  312  ; 

landson,  1  Rose,  419  ;  Ex  parte  Williams,  per  BuUer,  J.,  in  Hodsden  v.  Sta])le,  2  T. 

n  Ves.  7  ;  Ex  parte  Enderby,  2  B.  &   C.  R.  697  ;  Bamford  v.  Baron,  2  T.  R.  594, 

389  ;    Jones  v.   Dwyer,   15   Jlast,  21  ;    Ex  note  ;  and  see   Worsley  v.  De  Mattos,    1 

parte  Smith,    3  Madd.    63,    Buck,    149;  Burr.  467. 


494  THE    LAW    OF    PARTNERSHIP.  [CH.  XV. 

wliom  these  consequences  should  fall.    If  a  known  partner  retires 
and  carries  his   personal  credit  out  of  the  firm,  but  chooses  to 
leave  the  credit  of  his  property  in  the  firm,  certainly  he  cannot 
complain  if  they  who  accept  this  credit  and  act  upon  it  are  held 
in  law  to  be  entitled  to  the  advantage  of  it.  (x)    He  should,  there- 
fore, not  only  give  such   notice  of  his  retirement  as  will  prevent 
his  personal  liability  from  attaching  to  future  contracts,  but  he 
should  withdraw  all  his  property,  and  thus  prevent  the  credit  of 
this  property  from  so  attaching.     Or,  if  he  cannot  or  will  not  so 
withdraw  his  property  at  once,  perhaps  a  sufficient  notice  that  the 
]>ro))erty  so  left  is  his,  and  is  not  left  with  the  firm  for  them  to 
trade  on  the  credit  of  it,  might  save  his  property  from  creditors 
who  come  in  after  the  retirement.    Tliis  may  be  difficult;  and  the 
case  of  the  dormant  or  unknown  partner  is   still  more  difficult. 
He,  it  seems,  may  by  his  retirement  alone,  without  notice,  cut  off 
his  liability  for  future  debts.     He  has  never  contributed  to  the 
firm  any  credit  but  that  of  his  property  ostensibly  in  their  pos- 
session as  their  own.     If  he  now   leaves  this   property   in  their 
hands,  he  leaves  with  it  all  this  credit,  and  it  is  bound  to  make 
this  credit  good.     In  such  case,  if  he  undertakes  to  protect  his 
property  against  this  risk,  it  would  seem  that  he  must  give  notice 
of  his  past  relations  and  liabilities,  and  that  he  has  terminated 
them   by  retirement,  and   leaves  his   property   there  for  certain 
reasons,  but  not  to  be  liable  as  the  property  of  the  firm.     It  may 
be  doubted  whether  even  this  would  save  his  property  as  against 
the  statute,  although   it  might  be  enough  at  common  law  or  in 
equity  if  there  were  no  statute.  (?/) 

(x)  Ex  parte  Chuck,  8  Ring.  469  ;    Ex  firm.     The  plant  and  stock  in  trade  was 

parte  Wood,   1   De  Gex,    134;    Ex  parte  taken  possession  of  by  the  same  partner, 

Gurnej',  3  Mont.  D.  &  D.  541  ;    Ex  parte  and  used  in   his  separate  trade  after  the 

Thomas,  3  Mont.  D.  &  D.  40,  affirming  s.  dissolution.     It  was  held,  that  it  was  in 

c.  2  ilont.  D.  &  D.  294  ;  Ex  parte  Hal-  his  separate  reputed  ownership.     Ex  parte 

lifax,  2   ilont.  D.  &  D.  544  ;    Bannatyne  Sprague,  4  De  G.  M.  &  G.  866.     And  see 

V.  Leader,  10  Sim.  850  ;  Ex  jmrte  Heath,  Hunter  v.  Rice,  15   East,  100  ;    Ex  parte 

4  Jur.  28  ;    Ex  parte  Simpson,    Mont.  &  Wheeler,  Buck,  25  ;    Ex  parte  Clarkson, 

Ch.  662  ;  Ex  parte  Taylor,  ilont.  240  ;  Ex  4  Deac.  &  Ch.  56  ;  Ex  parte  Enderhy,  2 

parte  Dyster,  2  Rose,  256 ;  but  see  Cald-  B.  &  C.  389  ;  Ex  parte  Arbonin,  1  De  Gex, 

well  t).  Gregory,  2  Rose,  149  ;  Curtis  u.  Per-  359;   Ex  parte   Ruffin,    6  Ves.  119;    Ex 

ry,  6  Ves.  747  ;  Ex  parte  Fell,  10  Yes.  347.  parte    Fell,  10  Ves.  347  ;     Ex  parte  Wil- 

(y)  Ex  parte  Woodgate,  2  Mont.  D.  &  liams,  11  Ves.  3  ;  Joy  v.  Campbell,  1  Sch. 

D.  394.     A  dissolution  of  partnership  was  &  L.  328  ;    Ex  parte  Burton,  ]   Glyn  &  J. 

advertised  in  the  Gazette,  and  a  circular  207  ;  Ex  parte  Usborne,  1  Glyn  &  J.  358  ; 

sent  in   the  name  of  the  dissolved  firm,  Ex  parte  Coniier.   1    Mont.  D.  &  D.  358. 

requesting  debtors  of  the  firm  to  pay  their  And  see  further,  on  the  effect  of  notice  or 

debts  to  one  partner.     It  was  held,  that  want  of  notice  bearing  on  reputed  owner- 

the   notice  was   insufficient   to   take    the  .ship.  Ex  parte  Barnett,   1   De  Gex,   194  ; 

debts  out  of  the  reputed  ownership  of  the  Ex  parte  Wood,   3  Mont.  D.  &  D.   314  ; 


§  398.] 


OF   BANKRUPTCY    AND    INSOLVENCY. 


495 


§  398.  Negotiable  Paper  signed  by  Partners.  —  It  not  Ullfreqiientlv 
hai)i)Ciis  that  persons  wlio  actually  are  in  partnersliip,  and  in  one 
firm,  appear  to  the  world  as  distinct  traders,  or  as  distinct  firms, 
for  the  convenience  and  advantage  of  using  the  names  separately 
upon  negotiable  paper.  Thus,  if  there  are  three  partners  who 
call  themselves  so,  they  could  use  only  the  name  of  A.,  11,  &  Co. 
But,  if  not  known  as  partners,  A.  may  draw  on  B.  in  favor  of 
C,  and  B.  may  accept  and  C.  indoi'se,  and  the  paper  have  appar- 
ently three  distinct  liabilities.  The  question  then  may  arise.  May 
the  holder  proceed  against  the  several  estates  of  all  these  persons, 
or  only  against  the  joint  fund  of  their  firm  ?  (z)  The  authorities 
on  this  point  are  conflicting  ;  nor  do  they  cover  the  whole  ground. 
We  would  state  the  result,  however,  thus :  If  the  holder  took  the 
paper  on  the  credit  of  the  several  names,  and  in  ignorance  of 
their  joint  interest,  he  certainly  may  prove  against  all  the  parties 
severally.  But  he  may  elect  to  proceed  against  the  firm,  or 
the  joint  fund,  because  what  he  held  was  in  fact  partnership 
paper,  (r/)     If  he  took  the  paper  knowing  that  these  names  were 


Hz  parte  Arkwright,  3  Mont.  D.  &  D. 
129  ;  Ex  parte  Wilkinson,  13  Sim.  475  ; 
Ex  parte  Pott,  2  Sim.  2.^7,  recognizing  the 
rule  in  Williams  v.  Thorp,  2  Sim.  263  ;  and 
overruling  Ex  parte  Smith,  2  Sim.  357  ; 
Ex  parte  Nutting,  2  Mont.  D.  &  D.  302  ; 
Ex  parte  Ushorne,  1  Glyn  &  J.  358 ;  Ex 
parte  Burton,  1  Glyn.  k  J.  207. 

{z)  B.  &  G.  carry  on  business  at  Man- 
chester as  commission  agents,  under  the 
firm  of  B.  &  Co.,  G.  being  also  a  trader 
on  his  own  se])arate  account  at  Stockport, 
under  the  firm  of  J.  &  Co.,  and  being 
likewise  a  partner  with  J.  in  London, 
trading  under  the  firm  of  J.  &  Co.,  and 
with  S.  R.  at  Stockport,  trading  under 
the  firm  of  S.  R.  B.  &  Co.,  drew  two  bills 
upon  J.  &  Co.,  payable  to  the  order  of  B. 
&  Co.,  which  J.  &  Co.  accept,  and  which 
are  afterwards  indorsed  by  B.  &  Co.,  G.  & 
Co.,  and  S.  R.  ;  and  of  which  W.  &  Co. 
became  the  holders  for  a  valuable  consid- 
eration, without  any  knowledge  that  G. 
was  a  partner  in  the  house  of  B.  &  Co.,  or 
in  that  of  J.  &  Co.  B.  &  G.  and  J.  sev- 
erally became  bankrupt.  The  judges  were 
equally  divided  on  the  question,  whether 
W.  &  Co.  could  prove  the  amount  of  the 
bills  both  against  the  joint  estate  of  B.  & 
G.  and  the  separate  estate  of  G.,  or  whe- 
ther they  must  elect.    But  it  was  held,  by 


all  the  judges,  that  the  amount  of  divi- 
dends, which  had  been  previously  declared, 
though  not  receiveil  by  W.  &  Co.,  under 
the  commission  against  J.,  must  be  de- 
ducted from  such  proof.     Ex  parte  Moult, 

1  Deac.  &  Ch.  44,  Mont.  321.  The  (jues- 
tion  is  very  elaboratel}'^  argued  by  Enskine, 
C.  J.,  and  Sir  George  Rose,  that  "W.  &  Co. 
must  elect  ;  and,  on  a  rehearing  before 
the   Lord   Chancellor,   it  was  so  decided. 

2  Deac.  &  Ch.  419,  Mont.  &  B.  28. 

(a)  A.  &  B.  were  in  partnership,  B. 
being  a  secret  partner;  and  A.,  ou  the 
paitnership  account,  drew  bills  in  his  own 
name  on  B.,  which  were  accepted  by  him. 
It  was  held,  on  the  bankruptcy  of  A.  &  B., 
that  the  holder  of  tliese  bills,  viho  was 
ignorant  of  the  partnership,  was  not  en- 
titled to  prove  them  against  the  joint  es- 
tate of  A.  &  B.  and  the  separate  estate  of 
B.,  but  that  he  was  entitled  to  prove  them 
against  the  separate  estates  of  A.  &  B.,  it 
was  also  held,  that  the  holder,  having 
proved  against  the  joint  estate,  might, 
after  a  declaration  of  the  dividend  of  the 
joint  estate,  retire  from  that  proof,  and 
prove  against  the  separate  estate.  Ex 
parte  Husband,  2  Glyn  &  J.  4,  reversing 
s.  c.  5  Madd.  410.  The  Lord  Chancellor 
said  :  "The  circumstances  of  this  case  are 
peculiar,  aud  create  some  embarrassment 


496 


THE    LAW    OF    PARTNERSHIP. 


[CH.  XV. 


the  names  of  partners,  it  is  much  more  doubtful  whether  lie  can 
now  proceed  against  the  parties  severally.  There  are  dicta  of 
great  weight  (6)  in  favor  of  his  right,  but  little  or  no  adjudica- 
tion. We  think  the  test  would  be  the  actual  character  of  the  paper. 
If  this  was  in  fact  partnership  paper,  and  the  holder  knew 
that  the  names  were  those  of  partners,  we  think  he  has  only  the 
right  which  attaches  to  partnership  paper  ;  and  if  the  holder  knew 
also  that  it  was  partnership  paper,  as  well  as  that  it  bore  the 
names  of  partners,  we  should  be  quite  certain  of  this.  If,  how- 
ever, the  paper  was  not  partnership  paper,  but  the  paper  of  one 
of  the  persons,  or  of  one  of  the  firms  placing  their  names  on  it, 
then  we  should  say  that  the  holder  could  proceed  against  them 
severally,  although  they  were  partners  otherwise,  and  he  knew 
that  they  were  so.  (c) 

§  399.  Competition  between  Partner  and  Firm  Creditors.  —  If  a 
firm  be  indebted  to  one  of  the  partners  it  has  l)een  supposed  (t^) 
that  this  debt  formed  a  part  of  the  several  assets  of  that  partner, 
and  that  his  several  creditors  miglit,  therefore,  prove  against  the 
joint  fund,  for  that  debt,  in  competition  with  the  joint  creditors. 
But  that  partner,  if  solvent,  could  not  himself  prove  against  the 


in  the  application  of  well-known  princi- 
ples of  the  bankrupt  law.  It  is  clear,  that 
where  a  party  takes  a  bill,  drawn  bj'  some 
members  of  a  firm,  carrying  on  a  distinct 
trade,  on  the  firm,  in  ignorance  that  the 
drawers  constitute  part  of  the  firm  of  the 
acceptors,  proof  is  admitted  against  both 
the  drawers  and  acceptors ;  and  it  is 
equally  clear,  that  a  person  holding  a 
joint  and  separate  security  for  the  same 
debt  is  in  bankruptcy  bound  to  elect.  In 
this  case,  however,  the  bills  are  accepted 
ty  the  dormant  partner  of  the  partnership 
of  Isaac  and  Peter  Blackburn,  carrying 
on  business  in  the  name  of  Isaac  Black- 
burn, and  are  drawn  by  Isaac  Blackburn, 
in  his  individual  name  indeed,  but,  as  I 
must  take  it  on  the  evidence,  in  his  name 
as  representing  the  firm  of  the  two  bank- 
rupts. It  does  not  appear  to  me  that  this 
case  ranges  itself  within  that  class  of 
cases  in  which,  contrary  to  the  ordinary 
rule  in  bankrui>tcy,  the  holder  has  been 
allowed  to  pursue  the  contract  appearing 
on  the  face  of  the  bills,  and  to  have  double 
proof.  But  I  do  not  think  that  the  peti- 
tioners are  concluded  by  anything  that  has 
passed,  so  as  to  be  prevented  now  from 
withdrawing  the  proof  against  the  joint 


estate,  and  being  admitted  as  creditors  on 
the  two  separate  estates."  See  the  cases 
cited  in  the  following  notes,  for  a  full  con- 
sideration of  these  questions. 

(?/)  These  are  collected  and  commented 
on  in  Ex  parte  Moult,  2  Deac.  &  Ch.  419. 

(c)  Ex  jKirtc  Moult,  1  Deac.  &  Ch.  44  ; 
Mont.  321,  and  s.  c.  2  Deac.  &  Ch.  419, 
Mont.  &  B.  28  ;  Ex  parte  Sillitoe,  1  Glyn 
&  J.  383  ;  Li  re  Shakeshaft,  Stirrup,  &~ 
Salisbury,  cited  in  Cuitis  v.  Perry,  6  Ves. 
743,  747  ;  Ex  parte  Adam,  2  Rose,  36,  1 
Ves.  &  B.  493  ;  Ex  parte  Bigg,  2  Rose, 
37  ;  Ex  parte  Walker,  1  Rose,  441  ;  Ex 
parte  Liddel,  2  Rose,  34  ;  Ex  parte  Hus- 
band, 5  Madd.  419,  .s.  c.  on  appeal,  2 
Glyn  &  J.  4  ;  Ex  parte  La  Forest,  1  Cooke 
B.  L.  276  ;  Ex  parte  Benson,  1  Cooke, 
278;  Ex  parte  The  Bank  of  England,  2 
Rose,  82 ;  Ex  parte  Rowlandson,  3  P. 
Wms.  405  ;  Ex  parte  Bonbonus,  3  Ves. 
.'>46 ;  Ex  parte  Blackburn,  10  Ves.  204  ; 
Ex  parte.  Bond,  1  Atk.  98  ;  Ex  parte  Cob- 
ham,  1  Bro.  Ch.  576  ;  Ex  parte  Heyden, 
1  Cooke,  B.  L.  254  ;  Ex  parte  Chevalier, 
1  Mont.  &  A.  345. 

(d)  Ex  parte  Hunter,  1  Atk.  223,  per 
Lord  Hardwicke  ;  Ex  parte  Blake,  Cooke 
B.  L.  503. 


§  399,]  OF    BANKRUPTCY    AND    INSOLVENCY.  497 

joint  fund,  to  the  injury  of  the  joint  creditors,  because  he  is  him- 
self liable  to  those  creditors  ;  and  the  several  creditors  of  that 
partner  take  on  his  insolvency  only  his  rights  ;  and  therefore  it 
seems  now  to  be  settled,  that  they  cannot  prove  against  the  joint 
fund,  in  such  a  case.  («)  ^  If,  on  the  other  hand,  a  partner  owes  a 
balance  to  the  firm,  the  joint  creditors  cannot,  on  that  account, 

(e)  Ex  parte  Reeve,  9  Ves.   588  ;    Ex  by  Fendal  to  be  admitted  a  creditor  for 

parte  Lodge  &  Feudal,   1   Ves.   166  ;    Ex  the  amount  of  his  advances  as  against  the 

parte   King,    1    Hose,   212.     In    Ex  parte  partnership.      Lord    Thurlow,   after    full 

Keeve,  Lord  Eldon,  in  holding  that,  under  consideration,  was  of  opinion,  that  all  the 

a   joint   commission  of    bankruptcy,    the  authorities  establish  this  ;  that  those  who, 

right  of   the  creditors  to  interest  .subse-  being  in  partnership,   are  themselves,  or 

quent  to  the  date  of  the  commission,  in  some  of  them,  debtors  to  the  creditors  of 

tlie   case   of  a  surplus,   is  preferred  to   a  every  class,   cannot  come  in  competition 

debt  from  the  separate  to  the  joint  estate  ;  with  the  creditors.     After  their  demands 

upon  the  principle,  that  neither  the  part-  are  liquidated  finally,  the  partners  may  be 

nership    nor    the    individual   del)tor   can  creditors  upon  each  other,  but  not  before." 

claim  in  competition  with   the  creditors,  M'Cauly  v.  M'Farlane,  2  Desaus.  239  ;  Ex 

said:    "All  these  eases   were   very   fully  parte  Burrell,  Cooke  B.  L.  503;    Ex  parte 

discussed    by  Lord  Thurlow,  in   the  case  Parker,  id.;  Ex  parte  VxxiQ,  id.;    Ex  parte 

of   Lodge  &  Fendal.     Mr.  Fendal  was  a  Adams,  1  Rose,  305  ;    Ex  parte  Harris,  1 

cieditor  of   the    partnership,    of    himself  Rose,  438  ;  Ex  parte  Sillitoe,  1  Glyn  &  J. 

and    Lodge,    for    large    sums    advanced.  382  ;  Ex  parte  Ogle,  Mont.  350  ;  Ex  parte 

They     became     bankrupts      immediately  Yonge,  3  Ves.  &  B.  34,  2   Rose,  44  ;    Ex 

after   the   formation  of   the  partnership  ;  parte  Batson,  Cooke   B.  L.  503 ;  Ex  parte 

and  those  advam^es  formed  tiie  joint  es-  Grill,  id, 
tate  to  be  divided.     There  was  a  struggle 

1  It  is  a  general  rule  that  by  no  form  of  claim  can  one  partner  compete  with  the 
partnership  creditors  in  the  division  of  the  joint  assets.  Edison  Electric  Illuminating 
Co.  V.  De  Mott,  (N.  J.)  25  Atl.  952.  Hence  where  a  bankrupt  firm  is  indebted  to  a 
bankrupt  partner  the  assignee  of  the  latter  cannot  prove  against  the  joint  estate.  In 
re  Rieser,  19  Hun,  202.  And  where  a  partner  dies  his  representative  cannot  prove 
against  the  firm,  if  it  is  bankrupt,  a  sum  which  was  due  to  the  deceased  from  the  firm, 
so  as  to  compete  with  the  firm  creditors.  Ex  parte  Blythe,  16  Ch.  D.  620;  Banks  v. 
Steele,  27  Neb.  138,  42  N".  W.  883.  So  if  upon  the  partner's  death  the  survivors 
continued  business  and  became  bankrupt,  the  representative  of  the  deceased  could  not 
prove  if  creditors  of  the  old  firm  had  proved.  Ex  parte  Blythe,  16  Ch.  D.  620.  If 
no  creditors  of  the  old  firm  had  proved,  the  representative  of  the  deceased  partner 
might  do  so  ;  but  his  proof  would  be  postyioned  if  a  creditor  of  the  old  firm  afterwards 
proved.  Ex  parte  Andrews,  25  Ch.  D.  505  (C.  A.).  And  if  all  the  debts  of  creditors 
of  the  old  firm  are  barred  by  the  statute  of  limitations,  the  former  partner  or  his  rep- 
resentative may  prove.     In  re  Hepburn,  14  Q.  B.  D.  394. 

Where  the  former  partner  took  a  note  of  the  new  firm  for  his  claim,  and  while  the 
firm  was  solvent  surrendered  the  note  and  had  a  new  one  made  to  his  daughter,  who  in 
good  faith  indorsed  to  A,  the  latter  Gould  prove  ;  though  it  seems  that  he  could  not 
have  done  so  if  he  had  been  an  indorsee  of  the  original  note  to  the  partner.  Parsons 
V.  Tillman,  95  Ind.  452.  A  statute  which  provided  that  a  married  woman  should  not 
prove  against  her  husband  in  bankruptcy  in  competition  with  his  creditors,  was  held 
not  to  apply  in  a  case  where  a  woman  lent  money  to  a  partnership  of  which  her  hus- 
band was  a  member ,  and  she  was  allowed  to  prove  with  the  other  creditors.  In  re 
Tuff,  19  Q.  B.  D.  88. 

32 


498 


THE   LAW   OF   PARTNERSHIP. 


[CH.  XV. 


prove  against  his  several  fund,  provided  the  balance  or  debt 
against  the  partner  arose  from  lawful  transactions ;  but  it  seems 
that,  if  tliis  balance  was  caused  by  a  fraudulent  or  surreptitious 
withdrawal  by  the  partner  of  something  from  the  joint  fund,  this 
should  be  restored  to  that  fund,  for  the  benefit  of  the  joint  cred- 
itors.^  So,  if  the  joint  estate  is  larger  at  the  time  of  bankruptcy, 
by  any  fraudulent  act  against  one  partner,  liis  several  credi- 
tors may,  it  is  said,  proceed  against  the  joint  estate,  for  that 
amount.  (/) 

§  400.  Dormant  Partners.  —  If  there  be  dormant  partners,  cred- 
itors who  dealt  in  partnership  business  with  the  ostensible 
partners,  without  any  knowledge  of  the  dormant  partners,  may, 
upon  discovery,  elect  wiiether  to  proceed  against  tlie  ostensible 
partners  alone,  or  against  the  joint  fund  of  the  actual  partner- 
sliip.  (^)  But  it  would  seem  that  the  rule  in  equity,  above 
referred  to,  that  one  who  may  choose  between  two  funds  shall 
not,  by  such  choice,  injure  one  who  has  no  choice,  here  comes  in  ; 
and  that,  if  such  creditors  elect  to  prove  against  the  separate 
estate  of  the  ostensible  partners,  several  creditors  of  the  osten- 
sible partners,  wlio  could  not  proceed  against  the  joint  fund,  may 
now  proceed  against  it  for  an  equivalent  amount,  (h) 


{/)  Ex  parte  Smith,  1  Glyn  &  J.  74  ; 
6  Madd.  2  ;  Ex  parte  Cust,  Cooke  B.  L. 
506  ;  Ex  parte  Harris,  2  Ves.  &  B.  214,  1 
Rose,  129,  437 ;  Ex  parte  Watkins,  1 
Mont.  &  McA.  57  ;  Ex  parte  Yonge,  3 
Ves.  &  B.  31,  2  Kose,  40  ;  Ex  parte  Reid, 
2  Rose,  84. 

((/)  Ex  parte  Reid,  2  Rose,  84 ;  Ex 
parte  Norfolk,  19  Ves.  458  ;  Ex  parte 
Watson,  19  Ves.  459  ;  Ex  parte  Hamper, 
17  Ves.  403  ;  Binford  v.  Dormnett,  4  Ves. 
434 ;  Ex  parte  Matthews,  3  Ves.  &  B. 
125  ;  Ex  parte  Hodgkinson,  Cooper,  101. 
As  to  the  conflicting  rights  of  joint  and 
separate  creditors,  in  eases  of  partnerships 
having  a  dormant  partner,  see  French  v. 
Chase,  6  Me.  166  ;  Lord  v.  Baldwin,  6 
Pick.  348  ;  Cammack  v.  .Johnson,  1  Green 
Ch.  164  ;  Witter  r.  Richards,  10  Conn. 
37.  Tt  is  in  the  option  of  a  firm,  sning  as 
plaintiffs,  either  to  join  the  dormant  part- 
ner in  the  suit  or  omit  him  ;  as,  in  the 
corresponding  case  of  the  firm  being  sued 
as  defendants,  it  is  at  the  option  of  the 
plaintiff  to  join  the  dormant  partner  or 


not ;  and  the  joinder  or  nonjoinder  will 
not  constitute  an}'  objection  to  the  main- 
tenance of  the  suit.  Skinner  v.  Stocks, 
4  B.  &  Aid.  437  ;  Lloyd  v.  Archbowle,  2 
Taunt.  324  ;  Brassington  r.  Ault,  2  Bing. 
177  ;  Wilson  v.  Wallace,  8  S.  &  R.  55  ; 
Clarkson  v.  Carter,  3  Cowen,  85  ;  Board- 
man  V.  Keeler,  2  Vt.  65  ;  Lord  v.  Baldwin, 
6  Pick.  348  ;  Alexander  v.  Barker,  2  Cr.  & 
J.  133 ;  Cothay  v.  Fennell,  10  B.  &  C. 
671. 

(h)  B.  &  S.  were  in  partnership  to- 
gether ;  the  latter  being  a  dormant  partner. 
A  joint  commission  issued  against  them. 
B.'s  separate  estate  was  very  considerable  ; 
the  joint  creditors,  therefore,  availing 
themselves  of  their  right  to  resort  either 
to  the  visible  and  the  dormant  partner,  or 
to  the  visible  partner  only,  adopted  the 
latter  alternative,  and  proved  their  debt 
against  B.'s  separate  estate.  The  conse- 
quence of  this  was,  that  B.'s  separate 
estate,  which  would  have  sufficed  for  the 
payment  of  all  the  separate  creditors  in 
full,  was,  by  the  access  of  the  joint  credit* 


^  Ante,  §  378,  note  1. 


§  ^02.1 


OF    BANKRUPTCY    AND    INSOLVENCY. 


499 


§  401.  Distinct  Firms  with  Common  Partners.  —  We  have  before 
considered  the  case  of  parties  who  are  actually  partners,  hut  do 
not  appear  as  such.  If,  however,  they  do  not  seem  to  constitute 
two  distinct  firms,  but  do  so  actually, — ^  as,  for  exami)le,  if,  out 
of  four  who  are  j»artners  for  one  kind  of  business,  two  are  part- 
ners in  anotiier  entirely  distinct  business,  and  these  two  firms 
deal  with  each  other,  —  there  may  be  proof  by  one  against  the 
other,  or  by  the  creditors  of  either  against  its  own  fund,  in 
the  same  way  as  if  the  two  firms  were  formed  of  different 
persons,  (e) 

§  402.  Partners'  Priority  in  Firm  Assets  over  Separate  Creditors, 
—  While  solvent  partners  cannot  prove  against  the  joint  fund  to 
the  prejudice  of  joint  creditors,  because  they  are  liable  to  those 
creditors,  (/)  they  may  prove  against  the  joint  fund,  in  comi)eti- 
tion  with  the  several   creditors,  to  whom  they  are  not  liable,  (/c) 


ors,  apportioned  in  a  dividend  of  seven 
shillings,  in  the  pound  ;  while  the  joint 
estate  of  B.  &  S.,  exonerated  of  its 
proper  claimants,  prodm-ed  a  surplus.  On 
applicatiiin  of  B.'s  separate  creditors,  it 
was  held,  that  they  had  a  lien  upon  that 
surplus  to  the  extent  which  their  fumls 
had  been  diminished  hy  the  resort  of  the 
joint  creditors.  Ex  parte  Reid,  2  Rose,  84 
(i)  In  re  Richardson,  5  L.  J.  Ch.  129  ; 
Ex  parte  St.  Barbe,  11  Ves.  413 ;  Ex 
parte  Sillitoe,  1  Glyn  &  J.  374  ;  Ex  parte 
King,  Cooke  B.  L.  534  ;  Ex  parte  Johns, 
Cooke  B.  L.  534  ;  Ex  parte  Hesham,  1  Rose, 
146  ;  Ex  parte  Adams,  1  Rose,  305.  In 
re  Shakeshaft,  cited  in  6  Ves.  123,  747, 
and  in  11  Ves.  413.  In  this  last  case, 
Lord  Kldon  said  :  "  In  the  case  of  Shake- 
shaft,  Stii'rup  &  Salisbury,  Lord  Thurlow 
went  upon  this  distinction :  that  where 
there  is  only  one  partnership  arranging 
different  concerns  belonging  to  them  all, 
in  (liH'erent  ways,  for  the  benefit  of  differ- 
ent parts  of  that  joint  concern,  as  in  that 
instance,  the  three  persons  carrying  on 
the  business  of  cotton  manufacturers  in 
Lancashire,  and  two  of  them  in  London, 
there  could  not  be  proof  by  the  three 
ag:iinst  the  two  ;  but  if  the  trades  be 
perfectly  distinct,  then  the  three  as  cot- 
ton manufacturers  in  Lancashire  might  be 
creditors  upon  the  separate  concern  of  the 
two  as  ironmongers  in  London."  Ex  parte 
Freeman,  Cooke  B  L.  534  ;  Ex  parte  Cas- 
tell,  2  Glyn  &  J.  124  ;  &  parte  Brenchle}-, 
2    Glyn  &   J.  127  ;  Ex  parte   Stroud,    2 


Glyn  &  J.  127  ;  Ex  parte  Cook,  Mont.  228. 
For  the  limitations  on  this  doctrine,  see  Ex 
parte  Hargreaves,  1  Cox,  440. 

(j)  Ex  parte  Adams,  1  Rose,  305.  A. 
lends  a  sum  of  money  to  one  jiartner,  on 
his  own  securit}',  who  lends  the  same  to 
the  partnership  trade.  A  joint  commis- 
sion is  taken  out.  A.  shall  not  come  in 
as  a  creditor  upon  tlie  joint  estate  of  the 
bankrupts  directly,  with  the  rest  of  the 
partnership  creditors  ;  but  by  way  of 
circuit}-,  he  is  entitled,  as  standing  in  the 
place  of  that  partner  who  has  paid  the 
money  to  the  use  of  the  partnership  trade. 
Ex  parte  Hunter,  1  Atk.  223.  And  see 
Ex  parti  Ellis,  2  Glyn  &  J.  312  ;  Ex 
parte  Carter,  2  Glyn  &  J.  233  ;  Ex  parte 
Reeve,  9  Ves.  589  ;  Ex  parte  Ogle,  Mont. 
351  ;  Ex  parte  Burrell,  Cooke  B.  L.  505  ; 
Ex  parte  Broome,  1  Rose,  69  ;  Ex  parte 
Rawson,  Jac.  277  ;  Ex  parte  Robinson,  4 
Deac.  &  Ch.  499. 

(h)  Ex  parte  Adams,  1  Rose,  305  ;  Ex 
parte  King,  17  Ves.  115  ;  Ex  parte  Tor- 
rell.  Buck,  345 ;  Goss  v.  Dufresnoy, 
Davies  B.  L.  371  ;  Ex  parte  Hunter,  1 
Atk.  225  ;  Ex  parte  Batson,  2  Ca.  (  h. 
139,  166;  Craven  v.  Knight,  2  Chan. 
226  :  Ex  parte  Taylor,  2  Rose,  175  ;  Ex 
parte  Ogilvy,  2  Rose,  177,  3  Ves.  &  B.  133  ; 
Ex  parte  Watson,  4  Madd.  477,  Buck, 
449,  492  ;  Ex  parte  Willock,  2  Rose,  392  ; 
Wood  V.  Dodgson,  2  M.  &  S.  195  ;  Aflalo 
V.  Fourdrinier,  6  Ring.  309  ;  Butcher  v. 
Forman,  6  Hill,  583. 


600 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XV. 


Indeed,  their  rijrhts  are  prior  to  thuse  of  the  several  creditors ; 
for  tliose  creditors  can  have  the  right  of  their  debtor  to  the  joint 
fund  only  after  all  claims  upon  it  are  satisfied,  and,  among  these, 
the  claims  of  the  other  ))artners.  On  this  point,  it  must  be  the 
general  rule,  a])i)licabie  to  all  partnerships,  whether  they  be  gen- 
eral or  confined  to  a  particular  business  or  a  particular  trans- 
action, and,  indeed,  to  all  joint  adventures  and  enterprises  of 
every  kind,  that  they  must  be  first  settled,  and  the  mutual  claims 
and  balances  of  the  coi)artners  or  coadventurers  be  adjusted, 
before  the  divisible  surplus  is  ascertained  ;  and  then  the  right  of 
each  one  is  only  to  his  share  of  this  surplus,  and  the  creditors  of 
each  one  can  reach  and'  acquire  only  his  right.  It  follows, 
therefore,  that  the  several  creditors  of  each  one  will  be  post- 
poned, so  far  as  the  joint  assets  go,  not  only  to  the  joint  creditors, 
but  to  the  claims  of  the  coadventurers  for  balances  due  from  their 
companions,  arising  out  of  the  adventure.  (Z) 

If  any  such  adventures,  contracts,  or  enterprises  are  outstand- 
ing at  the  time  of  the  bankruptcy,  the  assignees  must  wait  until 
they  are  concluded  and  adjusted,  and  then  take  the  share  or  inter- 
est of  their  bankrupt  in  the  result,  (wi)     The  assignees  are  also 


(/)  West  V.  Skip,  1  Ves.  142;  Ex 
parte  Ruffin,  6  Ves.  119  (Sumner's  ed.) 
note  (a).  Upon  a  dissolution  of  the  part- 
nership, each  partner  has  a  lien  upon  the 
partnershi{>  effects,  as  \^ell  for  his  indem- 
nity as  for  his  propoition  of  the  surplus. 
But  creditors  have  no  lien  upon  the  part- 
nership effects  for  their  debts.  Their 
equity  is  the  equity  of  the  partnership 
assenting  to  the  i)aynient  of  tlie  partner- 
ship debts.  3  Kent,  Comm.  (.oth  ed.)  65  ; 
C;impbell  V.  Mullett,  2  Swanst.  608,  610  ; 
Ex  parte  Harris,  1  Madd.  583 ;  MuiTay  v. 
Murray,  5  Johns.  Ch.  60 ;  Woddrop  v. 
"Ward,  3  Desaus.  203  ;  Bell  v.  Newman,  5 
S.  &  R.  78;  Doner  v.  Stauffer,  1  Pen.  & 
W.  198;  White  v.  Union  Ins.  Co.,  1  N. 
&  McC.  557;  Ridglev  v.  Carey,  4  H. 
k  McH.  167  ;  M  Culloh  v.  Dashiell,  1  H. 
&  G.  96;  Hoxie  v.  Carr,  1  Sunin.  181; 
Conwell  V.  Sandidge,  8  Dana,  278 ;  Ex 
parte  Williams,  11  Ves.  5  ;  Holderness  v. 
Shackels,  8  B.  &  C.  612;  Hodges  v.  Hol- 
man,  1  Dana,  53;  Pierce  v.  Tiernan,  10 
G.  &  J.  253 ;  Sumner  r.  Hampson,  8 
Ohio,  328;  Bradford  v.  Kimberley,  3 
Johns.  Ch.  431  ;  Parker  v.  Muggridge,  2 
Story,  347  ;  Payne  v.  Matthews,  6  Paige, 
19.     The  lien  of  partners  upon  the  whole 


funds  of  the  partnership,  for  the  balance 
finally  due  to  them  resjiectively,  seems 
inca})able  of  being  enforced  in  any  other 
manner  than  by  a  court  of  e(iuity,  through 
the  instrumentality  of  a  sale.  The  cred- 
itors of  the  partnership  have  a  preference 
to  have  their  debts  inxid  out  of  the  part- 
nershi]!  funds  before  the  private  creditors 
of  either  of  the  partners.  But  this  pre- 
ference is,  at  law,  generally  disregarded ; 
in  e(iuity,  it  is  worked  out  through  the 
equity  of  the-  partners  over  the  whole 
funds.  1  Story,  Eq.  Jur.  §  675 ;  Com- 
mercial Bank  v.  Wilkins,  9  Me.  28  ;  Free- 
man V.  Stewart,  41  Miss.  138.  [See  aiite, 
§  246  et  scq.]  . 

Ui)on  the  same  principle  the  debt  of  a 
firm,  which  has  advanced  money  to  an 
individual  member  beyond  his  share  of 
the  capital,  is  a  separate  debt  of  tlie  firm  as 
against  the  ])artner  receiving  the  same  ; 
and  the  assignee  of  the  fii'ni  may  prove 
the  debt  against  the  separate  debtor  part- 
ner, and  be  paid  after  the  other  separate 
copartnership  creditors  are  paid,  but  not 
before.  In  re  McLean,  15  N.  B.  R.  333. 
(m)  French  i-.  Fenn,  1  Cooke  B.  L. 
536 ;  3  Dong.  257  ;  Jack.son  v.  Sedgwick, 
1   Swanst.    468 ;    Brown  v.  Litton,  1  P. 


§  40G.] 


OF   BANKRUPTCY    AND    INSOLVENCY. 


501 


entitled  to  claim  unpaid  instalments  due  from  a  solvent  partner, 
for  his  admission  into  the  partnership,  because  these  form  a  part 
of  the  joint  fund,  {n) 

§  403.  Foreign  Bankruptcy.  —  Nor  is  the  interest  of  partners  in 
a  foreign  enterprise  lost  by  seizure  of  the  goods  there,  provided 
they,  or  any  part  of  them,  be  restored.  Tims,  if  there  be  three 
partners,  two  citizens  of  one  country,  and  one  of  another, —  and 
between  these  countries  war  breaks  out,  and  property  of  the  part- 
nership is  seized  in  the  country  of  the  one  as  property  of  aliens, 
but  the  share  therein  of  that  one  is  restored  to  him,  the  other 
partners  are  entitled,  on  settlement,  to  a  share  of  the  property 
restored,  in  the  same  way  as  if  it  were  restored  to  the  partner- 
ship;  and,  if  insolvent,  their  assignees  take  that  share,  (c)  A 
foreign  government  may,  however,  make  a  gift  to  their  own  citi- 
zen ;  and  it  has  been  said,  that  if  the  government  choose  to  make, 
or  cause  to  be  made,  a  compensation  in  money  to  their  citizen, 
instead  of  a  restitution  m  aoUdo^  this  will  be  held  to  be  a  gift,  in 
which  the  copartners  hav^e  no  interest.  And  this  would  be  espe- 
cially true  if  there  were  an  express  exclusion  of  the  aliens.  Of 
course,  the  joint  creditors  could  not  prove  against  funds  thus 
made  several,  {p) 


Wms.  140;  Smith  v.  De  Silva,  Cowp. 
469.  The  assignees  under  a  separate  com- 
mission talce  only  sneh  iindivideii  interest 
or  share  as  the  bankrupt  himself  had,  and 
in  the  same  manner  as  he  held  it.  Holder- 
ness  V.  Shackels,  8  B.  &  C.  618.  See  also 
"Wilson  V.  Greenwood,  1  Swanst.  471,  481, 
n.  ;  Hammond  v.  Douglas,  5  Ves.  539 ; 
Crawshay  v.  Collins,  15  Ves.  218  ;  Hill 
V.  Burnham,  cited  id.  ;  Brown  v.  Vider, 
15  Ves.  223,  2  Russ.  340 ;  Brown  v.  De 
Tastet,  Jac.  284  ;  Fearns  i'.  Young,  9 
Ves.  549  ;  Wedderburn  v.  Wedderburn,  4 
Mylne  &  C.  53. 

{n)  Akhurst  v.  Jackson,  1  Swanst.  85, 
1  Wilson,  47. 

(o)  Thompson  v.  Ryan,  cited  in  Camp- 
bell V.  MuUett,  2  Swanst.  565,  n.,  577, 
And  see,  as  to  the  effect  of  war  upon  part- 
nership, Griswold  v.  Waddington,  16 
Johns.  438,  and  authorities  there  cited. 

(p)  Campbell  v.  MuUett,  2  Swanst. 
551.  Two  American  citizens  residing  at 
Baltimore,  and  a  French  subject  residing 
at  St.  Domingo,  being  in  partnership,  and 
owners  of  certain  ships  captured  by  British 
cruisers,  and  the  commissioners  ajipointed 


under  the  seventh  article  of  the  treaty  of 
commerce,  concluded  in  1794,  between 
England  and  America,  for  awarding  com- 
pensations to  American  subjects  who  bad 
suffered  losses  by  capture,  for  which  they 
could  obtain  no  redress  in  the  ordinary 
tribunals,  having  awarded,  in  compen- 
sation of  the  ships  of  the  partnership 
captured,  certain  sums  to  the  two  Ameri- 
cans, with  express  exclusion  of  the  French 
citizen  as  an  alien  enemy,  the  sums  so 
awarded  are  not  partnership  property,  and 
the  creditors  of  the  partnership  have  no 
claim  on  them,  as  against  the  separate 
creditors  of  the  Americans.  In  this  case, 
the  following  distinction  is  made  by  Sir 
Thomas  Phimer,  Master  of  the  Rolls,  in 
delivering  judgment:  "If  the  very  joint 
stock,  or  a  part  of  it,  as  in  Thompson  ?'. 
Rj'an,  had  been  restored,  there  would 
have  been  nothing  to  alter  the  property  : 
the  goods  are  returned  in  statu  quo,  the 
property  of  the  partners.  But  here  the 
ships  are  gone,  and  never  restored,  and  the 
question  concerns  a  new  property  come  to 
the  two  in  the  way  of  compensation.  That 
is  far  removed  from  a  case  of  restitution, 


502 


THE    LAW    OP    PARTNERSHIP. 


[CH.    XV. 


The  English  Court  of  Admiralty  has  refused  to  assist  the 
assignees  of  a  bankrupt  in  obtaining  liis  share  of  property  re- 
stored in  so/ido.  But  we  think  this  arose  from  a  limitation  of 
the  admiralty  ])ovver  in  England,  which  does  not  exist  here,  (q) 

§  404.  Right  of  Assignee  to  continue  Business.  —  It  has  been 
repeatedly  said,  that,  if  a  partner  becomes  insolvent,  the  accounts 
of  a  firm  should  be  closed,  and  the  assignees  should  not  continue 
the  trade  and  business,  nor  permit  a  continuance  of  it  without 
settlement,  (r)  But  that  may  not  be  a  positive  and  universal 
rule  ;  nor  can  the  solvent  partners  resist  a  bill  by  the  assignees 
for  a  share  in  the  profits  of  a  subsequent  trading,  on  the  ground 
that  the  assignees  did  not  require  an  immediate  settlement,  be- 
cause it  is  no  more  the  duty  of  the  assignees  to  require  this  than 
it  is  the  duty  of  the  solvent  partners  to  make  it.  (s)     Where  a 


Restitution  might  have  been  made,  if  it 
were  still  joint  propert)' ;  compensation 
considers  only  the  individual  shares,  and 
gives  in  the  proportion  of  their  interests 
iudividuall}-  to  the  two.  There  is  no  moi-e 
ground  for  admitting  the  joint  creditors 
than  the  French  partner."  During  the 
argument,  the  Master  of  the  Rolls  put  the 
query,  "  If  a  partnership  sustained  an 
accidental  loss,  as  by  fire,  and  an  individual 
made  a  donation  to  two  of  the  partners, 
in  compensation  of  their  loss,  would  that 
be  i>artnership  property  ?  "  And  see  Laraz- 
zabel  V.  Gorbea,  cited  2  Swaust.  572. 

(q)  The  Jefferson,  1  C.  Rob.  325.  Sir 
W.  Scott,  indeed,  in  his  judgment, 
expressly  sa}'s,  after  the  decree  for  restitu- 
tion had  been  passed  :  "  The  question  is, 
whether  the  court  shall  proceed  again  to 
make  a  severance  between  these  parties  ? 
I  cannot  think  that  I  have  the  power  to  do 
that.  All  the  severance  that  was  neces- 
sary in  this  case  to  determine  the  national 
character  of  the  parties  has  been  already 
made  :  restitution  stands  decreed  to  this 
house.  I  am  functus  officio,  and  I  shall 
not  begin  again  at  the  prayer  of  the 
assignees,  who  now  suggest  that  one  of  the 
partners  is  likewise  an  English  merchant 
and  a  bankrupt.  Tliey  must  resort  to 
some  other  authority  to  make  the  discrim- 
ination between  this  American  partner- 
ship stock,  for  the  purpose  of  subjecting  a 
particular  share  to  a  British  bankruptcy. 
It  is  no  part  of  the  duty  of  the  Court  of 
Admiralty  to  do  this,  and  I  dismiss  the 


petition."  See  2  Pars.  Mar.  Law.  b.  3, 
on  the  law  and  jurisdiction  of  admiralty  in 
America. 

(r)  Crawshay  v.  Collins,  15  Ves.  218, 
227  ;  Kegden  v.  Pierce,  6  Madd.  353 ; 
Fereday  v.  Wightwick,  1  Tamlyn,  261  ; 
3  Kent  Comm.  64 ;  2  Bell  Comm.  632  ; 
Story  on  Part.  §  350  ;  Gow  on  Part.  234  ; 
CoUyer  on  Part.  b.  2,  ch.  2,  §  2,  pp.  146, 
147. 

(s)  Crawshay  v.  Collins,  15  Ves.  228, 
per  Lord  Eldon  :  "It  is  said  a  duty  was 
im[iosed  upon  the  assignees  to  call  for  the 
account.  That  is  true.  It  is  farther 
urged  that  they  could  not  be  traders  in 
new  adventures.  This  also  is,  in  a  sense, 
true  ;  but  the  proposition  would  be  rash, 
that  there  can  be  no  case  in  which  they 
could  trade  with  consent  of  the  creditors, 
or  of  the  creditors  and  the  bankrupt 
together.  If  they  had  the  consent  of  all 
persons  interested,  I  do  not  know  that 
other  persons  with  whom  they  might  deal 
could  make  the  objection.  The  duty  is 
not  as  between  them  and  the  other  per- 
sons, who  are  not  properly  to  be  termed 
remaining  or  surviving  partners ;  the 
destruction  of  one  being,  unless  it  is 
otherwise  provided,  a  dissolution  of  the 
whole  partnenship,  —  as  if  by  effluxion  of 
time,  or  by  death,  — except  as  it  may  be 
reasoned  upon  the  effect  in  bankruptcy  of 
the  substitution  of  assignees.  It  is,  how- 
ever, no  more  the  dutj^  of  the  assignees  to 
settle  with  the  others,  than  it  is  their  duty 
to  settle  with  the  assignees." 


§  405.  OF    BANKRUPTCY    AND    INSOLVENCY.  603 

deceased  partner's  estate  was  insolvent,  and  the  administrators 
had  permitted  the  surviving  partners  to  sell  the  stock  in  the  usual 
course  of  trade  for  the  business  benefit,  and  a  loss  occurred,  they 
were  not  held  responsible  therefor,  (f)  But,  on  the  other  hand, 
if  administrators  ]jut  assets,  which  they  have  in  their  own  hands, 
into  the  hands  and  possession  of  the  surviving  partners  to  trade 
with,  and  a  loss  occurs,  for  this  they  will  l)e  held  responsible,  (m) 

§  405.  Sale  of  the  Effects  in  Bankruptcy.  —  If  there  be  a  bank- 
ru{)tcy  of  the  whole  firm,  it  is  very  seldom  that  any  other  mode  of 
settlement  is  resorted  to,  but  a  sale  of  the  property,  (v)  And 
this  is  so  usual,  and  recommended  by  so  many  obvious  considera- 
tions, that  assignees  must  not  only  have  an  unquestionable  power 
to  take  this  course,  but  would,  perhaj)s,  find  it  diiiticult  to  cxf)lain 
and  justify  any  other  course,  (w)  In  one  case,  where  credit- 
ors called  upon  the  English  court  of  chancery  to  restrain  the 
assignees  from  a  proj)osed  sale  of  the  bankrupt's  effects,  alleging 
suspicious  cii'cumstances  as  to  the  manner  of  the  sale.  Lord 
Eldon  refused  to  interfere,  on  the  ground  that  the  assignees  were 
acting  in  a  matter  peculiarly  within  their  power  and  at  their  dis- 
cretion, and  the  court  must  recognize  them  as  the  best  judges  of 
the  propriety  and  expediency  and  manner  of  a  sale ;  and  that  the 
assignees  must  abide  their  own  res()onsibility  for  what  they  did 
in  this  matter,  (a;) 

The  question  comes  up  in  a  different  form  when  a  part  only  of 
the  partners  are  bankrupt,  and  the  residue  solvent.  There  the 
assignees  take  all  the  interest  and  rights  of  the  bankrupt,  but 
take  them  subject  to  the  solvent  partner's  rights,  {y)  We  should 
say,  therefore,  that  they  had  no  right,  as  a  matter  of  course,  to 
require  a  sale,  (z)  Usually,  there  is  no  sale  ;  but  the  solvent 
partners  settle  up  the  concern  so  far  as  to  ascertain  the  value  of 

{t)   Thompson  t'.  Brown,  4  Johns.  Ch.  discretion,  a  court  of  equity  is   satisfied 

619.     And  see  Shepherd  v.  Towgood,  Tur-  that  a  postponement  of  a  sale  is  for  the 

ner  &  R.  379  ;  Keed  v.  Norris,  2  Mylne  &  general  benefit  of  the  creditors,  it  will  be 

C.  361 ;  Jennison  v.  Hapgood,  7  Pick.  1  ;  so   ordered.     Ex  parte   Kendall,    17    Ves. 

Sweet  V.  Jacocks,  6  Paige,  355.  519  ;  Ex  parte  Giosvenor,   14  Yes.   589. 

(7<)  Thompson  v.  Brown,  4  Johns.  Ch.  (x)  Ex  parte  Montgomerj',  1  Glyn  &  .1. 

619.     And  see  Barker  v.  Parker,   1  T.  R.  341.     Ordinarily,   on  a  dissolution,    from 

295;  Ex  parte  Garland,  10  Ves.  119;  Ex  whatever   cause,    there   must    be    a    sale. 

parte  Richard.son,  Buck,  209;   Wightraan  Dickinson  v.   Dickinson,  29  Conn.   601. 
V.   TowTiroe,    1    M.    &   S.    412  ;  Viner   v.  (y)  Taylor  v.   Fields,    4  Ves.   396,   15 

Cadell,  3  Esp.  90.  Ves.  559,  n.  ;  Barker  v.  Goodair,  11   Ves. 

(v)  Eden  B.  L.  215  ;  Ex  parte  Gerihg,  85;    Dutton    v.  Morrison,    17   Ves.   209; 

1  Ves.  Jr.  168  ;  Ex  parte  Hughes,  6  Ves.  Holderness  v.  Shackels,  8  B.  &  C.  618. 
617,  622  ;  Regden  v.  Pierce,  6  Madd.353  ;  (c)  Allen  v.  Kilbre,  4  Madd.  464  ;  Ex 

Fereday  v.  Wightwick,  1  Tamlyn,  261.  parte  Fige.s,  1  Glyn  &  J.  122.    But  see  Ex 

{w)  But  if,  in  the  exercise  of  a  sound  parte  Montgomery,  1  Glyii  &  J.  338. 


504  THE   LAW   OF   PARTNERSHIP.  [CH.  XV. 

the  bankrupt's  interest,  and  this  they  pay  to  tlie  assignees.  And 
sometimes  they  give  security  to  the  assignees  tliat  they  will,  with- 
out delay,  settle  the  concern,  and  ascertain  and  pay  over  the 
bankrupt's  share,  (a)  That  the  assignees  may  have  an  account, 
is  certain ;  and  the  court  would  always  decree  a  sale  where  the 
assignees  requested  it  for  good  cause,  and  perhaps  it  may  be  said 
that  any  decided  advantage  to  the  estate  of  the  bankrupt  would 
be  deemed  good  and  sufficient  cause.  (^) 

(a)  In  Nerot  v.  Burnand,  2  Russ.  56,  {h)  Crawshay  v.   Maule,  15  Ves.  218  ; 

pending  an  appeal  against  a  decree  declar-  Gow  on  Part.  234  ;  Lingen  v.  Simpson,  1 

ing  a  partnership  dissolved  and  directing  Sim.    &    St.    600  ;    Featherstonhaugh    i;. 

the  property  to  be  sold,  and  an  account,  Fenwick,  17  Ves.  309 ;  Fereday  v.  Wight- 

the  court  upon  motion  suspended  the  sale  wick,  1  Tamlyn,  261  ;  Regden  v.  Pierce, 

upon   the   terms   of    bringing  title-deeds  6   Madd.  353 ;    Cook    v.   Collingridge,    1 

into  the  master's  office,  and  giving  seciuity  Jacob,   607  ;    Evans  v,    Evans,    9   Paige, 

for  the  value  of  the  effects.  178. 


§  406.]  OP   AN   ACCOUNT.  505 


CHAPTER  XVI. 

OF   AN    ACCOUNT. 

SECTION  I. 

WHEN    AN   ACCOUNT   WILL   BE   ORDERED. 

§  406.  Right  to  an  Accouut.  —  We  have  been  obliged  to  antici- 
pate many  remarks  about  the  taking  of  an  account,  when  treating 
other  topics;  especially  the  various  modes  of  dissolution,  and  its 
consequences.  The  right  to  demand  an  account  is  almost,  but  not 
quite,  peculiar  to  partners  and  their  representatives.^  In  decid- 
ing one  case,  (a)  Lord  Eldon  seemed  to  thinlv  that  the  having  a 

(rt)  Ex  parte  Hamper,  17  Ves.  412.  a  partner ;  and  there  is  a  failure  of  evi- 
And  see  Katsch  v.  Shenck,  13  Jur.  668.  dence  to  show  that,  notwithstanding  the 
By  a  memorandum  in  writing,  the  defend-  words  of  the  agreement,  there  was  sub- 
ant,  a  general  merchant,  agreed  with  the  joined  any  stipulation  that  the  plain litf 
plaintiff,  in  consideration  of  the  general  should  not  be  taken  as  a  partner ;  without 
services  in  business  of  the  latter,  to  allow  further  entering  into  the  question,  as  be- 
him,  in  addition  to  a  fixed  salary,  one-  tween  the  plaintiff  and  defendant,  there  is 
fifth  of  the  net  profits  on  all  new  business  an  interest  created  in  the  plaintiff  to  know 
entered  into  through  him  ;  scmble,  a  part-  what  is  the  amount  of  profits,  and  there- 
nership  was  thereby  constituted  between  fore  an  interest  to  see  that  those  things  out 
the  parties  ;  and  held ,  that,  at  any  rate,  of  which  the  profits  arise  are  properly  dis- 
the  plaintiff  thereby  acquired  a  right,  as  posed  of,  which  is,  in  itself,  very  like  a 
against  the  defendant,  to  an  account  of  partnership  interest.  I  think,  on  prin- 
profits,  and  the  appointment  of  a  receiver,  ciple,  a  receiver  ought  to  be  appointed." 
The  Vice-Chancellor  :  "  It  strikes  me,  that  See  Salter  v.  Ham,  31  N.  Y.  321  ;  Coll}'er 
by  the  agreement  the  plaintiff  has  become  v.  CoUyer,  38  Pa.  257. 

1  It  is  clear  that  the  right  of  a  partner  to  an  account  is  a  legal,  not  an  equitable 
right ;  and  that  the  jurisdiction  of  equity  depends  upon  the  fact  that  the  legal  action  of 
account  is  obsolete  and  useless.  Equitable  relief  is  not  discretionary.  This  seems  to 
have  been  overlooked  by  the  court  in  the  case  of  Kinney  v.  Robinson,  66  Mich.  113, 
33  N.  W.  172.  This  was  a  bill  for  an  account.  An  order  had  been  entered  that  either 
partner  might  dispose  of  the  assets  at  cost  upon  filing  a  bond.  The  plaintiff  took  the 
assets  without  filing  a  bond,  and  disposed  of  them  below  cost ;  but  the  accounting 
showed  him  to  be  a  creditor  of  the  firm  to  the  amount  of  §2000.  The  court  held 
(Sherwood,  J.,  dissenting)  that  haviug  refused  to  do  equity,  he  could  not  call  upon 
equity  to  help  him  ;  and  declined  to  grant  a  decree  that  he  should  be  paid  the  amount. 
Perhaps  they  would  have  allowed  him  an  action  at  law  against  his  copartner ;  yet  equity 
would  seem  better  able  to  adjust  the  rights  of  the  parties. 


506 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XVI. 


right  to  nu  account  was  a  good  test  of  the  relation  of  partner ; 
tliat  is,  it  one  hy  agreement  acquires  a  right  to  an  account,  this 
will  make  him  a  partner.  We  should  prefer  saying  that  partner- 
shi])  is  a  good  test  for  the  right  to  an  account ;  and  that  the  first 
in(juiry  must  be,  whether  a  man  is  a  partner;  for  though  one 
may  have  a  right  to  an  account  who  is  not  a  j)artncr,  (aa)  if  he 
is  a  partner,  the  conclusion  follows,  that  he  has  a  right  to  an 
account.  This  right  he  may  transfer ;  for  not  only  do  all  jiart- 
ncrs  possess  this  right,  but  it  is  one  among  those  rights  which 
originates  in  or  arises  out  of  a  partnership,  and  yet  which  a  part- 
ner transfers  to  his  representatives,  whether  they  be  executors  or 
administrators,  assignees  in  bankruptcy,  execution  creditors,  or 
transferees,  although  they  do  not  therel)y  become  partners.  Every 
one  of  these,  and  every  other  party  who  has  acquired  the  part- 
ner's interest  in  the  joint  fund,  may  call  for  an  account,  in  oi-der 
to  settle  and  determine  what  that  interest  is.  (6)  ^ 


{nn)  One  compensateii  by  a  share  of 
the  profits  may  have  an  account,  though 
not  a  partner.  The  right  to  an  account  is 
not  a  conckisive  test  of  partnership.  Ante, 
§  53,  note. 

{b)  In  Crawshay  i\  Collins,  2  Euss. 
342,  Lord  Eldon  says :  "  A  partnership 
may  expire  by  death,  or  by  effluxion  of 
time,  or  by  notice,  or  by  the  bankruptcy 
of  a  partner ;  but,  in  all  thes.;  cases, 
though,  in  a  certain  sense  of  the  word 
expiration,  a  partnership  does  so  expire  in 
each  and  every  one  of  them,  yet,  in  most 
instances,  a  partnership  does  not  and  can- 
not then  expire  as  to  all  purposes.  In 
some,  it  may  not  exjiire  for  years  after  the 
period  in  which,  in  one  sense  of  the  word, 
we  say  it  does  expire  ;  and  it  must  depend 
upon  the  nature  of  the  partnership,  in 
what  way  it  is  to  be  carried  on  during  the 
period  in  which  it  is  to  be  wound  np.  If 
it  expires  by  bankrujitcy,  there  are  intro- 
duced into  it,  as  persons  interested  in  the 
manner  of  winding  it  up,  the  assignees  of 
the  bankrupt.  If  it  expires  by  death, 
there  are  introduced,  in  like  manner,  the 
executors  of  the  deceased  partner ;  who 
may  be  stated,  though  certainly  not  in  a 
very  correct  use  of  the  term,  to  be  a  sort  of 
assignees  of  the  deceased  partner.     When 


it  expires  by  notice,  it  mny  happen  that  in 
many  cases  the  party  who  gave  the  notice 
may  die  long  before  the  time  arrives  when 
it  may  be  said  to  be  quite  dissolved,  and 
his  executors  may  become  partners  in  the 
concern.  In  short,  in  everj'  s[»ecies  of  dis- 
solution which  may  take  place,  in  different 
events  ])ersons  in  the  course  of  time  may 
be  introduced  into  the  partnership,  with 
reference  to  whom  accounts  must  be  settled 
much  in  the  same  manner  as  it  would 
have  been  necessary  to  have  settled  them 
with  the  original  partners."  See  Bailey  v. 
Moore,  25  111.  347.  See,  as  to  what  inter- 
est gives  a  riglit  to  an  account,  Moffat  v. 
Mofl'at,  10  Bosw.  468.  Even  a  member  of 
a  firm  organized  for  the  purpose  of  hinder- 
ing and  delaying  creditors  of  a  prior  firm 
may  have  an  account.  Harvey  v.  Varney, 
98  Mass.  118. 

Where  after  dissolution  the  respective 
partners  continue  in  settlement  of  the 
affairs  of  the  partnership,  the  statute  of 
limitation  begins  to  run  against  the  right 
of  either  to  an  account  from  the  others, 
from  the  date  of  the  last  transaction,  re- 
ceipt, or  payment  by  either,  and  no 
demand  is  necessary  before  suit.  McClung 
V.  Capehart,  24  Minn.  17,  1  N.  W.   123. 


^  Thus,  a  sub-partner,  so-called,  has  a  right  to  an  account.  Nirdlinger  v.  Bern- 
heimer,  133  N.  Y.  45,  30  N.  E.  561.  As  to  the  right  of  an  employee  paid  by  a  share 
of  the  profits,  see  ante,  §  53,  note. 


§  407.] 


OF    AN    ACCOUNT. 


507 


§  407.  Duty  to  keep  Accounts.  —  Tt  is  partly  as  a  consequence 
of  this  universal  and  inii)i>rtaut  ritj:lit,  that  all  partners,  having 
any  charge  of  the  business  of  the  (irm,  are  bound  to  keep  con- 
stantly, regular,  intelligible,  and  accurate  accounts  of  all  the 
business,  and  to  give  all  the  partners  at  all  times  access  to  them, 
and  to  the  means  of  verifying  them.  And  if  they,  for  any  con- 
siderable time,  disregard  and  refuse  to  r)erform  this  duty,  a  court 
of  equity  will  coerce  them  to  its  fidl  discharge,  (c) 

It  is  possible  that  for  a  breach  of  this  duty,  especially  where 
there  was  an  express  contract  to  perform  it,  an  injured  party 
might  have  redress  at  law ;  but  he  can  compel  the  performance, 
and,  generally,  find  a  remedy  for  the  ill  consequence  of  a  non- 
performance, only  in  equity.  But  this  court  has  full  power  in  the 
premises,  and  usually  acknowledges  the  right  to  an  account  of  any 
partner,  or  rei)resentatives  of  a  partner,  unless  it  is  obviously 
unnecessary,  and  requested  for  frivolous  reasons,  or  with  malicious 
mtent.  (t?) 

{c)  Rowe  V.  Wood,  2  Jac.  &  W.  358, 
per  Lord  Eldon  :  "  One  partner  cannot 
exclude  another  from  an  equal  manage- 
ment of  the  concern  ;  and  it  is  the  duty  of 
each  to  keep  precise  accounts,  and  to  have 
them  always  ready  for  inspection,  and,  in 
short,  to  keep  good  faith  towards  each 
other.  I  think  that  the  plaintiff,  subject 
to  the  equities  which  may  he  ultimately 
declared  between  the  parties,  has  a  clear 
right  to  insist  that  regular  accounts  shall 
be  kept  of  all  receipts,  payments,  trans- 
actions, and  so  on,  relative  to  the  mine, 
and  to  have  constant  access  for  the  pur- 
pose of  inspecting  the  accounts  ;  and  also, 
that,  subject  to  those  equities,  he  has  a 
clear  right  to  control  the  working  of  the 
mines,  and  if  he  is  impelled  in  the  exercise 
of  any  of  these  rights,  let  him  come  to  the 
court  again.  The  application,  after  the 
other  parties  have  been  apprised  of  what 
the  court  expects  them  to  do,  will  be  dif- 
ferently treated."  Beacham  v.  Eckford, 
2  Sandf.  Ch,  116.  See  Tyng  v.  Thayer,  8 
Allen,  391. 

(d)  Smith's  Merc.  Law  (5th  ed.),  35  ; 
JLarshall  v.  Colman,  2  Jac.  &  W.  266. 
Where  [ilaintiff  has  an  adequate  7-emedy  at 
law  by  action  of  account,  it  is  held,  in 
Connecticut,  that  chancery  has  no  juris- 
diction. Stannard  v.  Whittlesey,  9  Conn. 
556.  It  has  also  been  held  in  Connecticut, 
that  no  action  at  law  will  lie  for  the  settle- 


ment of  a  partnership  account,  where  the 
number  of  partners  exceeds  two  ;  the 
remedy  is  in  equity.  Beach  v.  Hotchkiss, 
2  Conn.  425.  But  it  is  otherwise  in  Penn- 
sylvania. Whelen  V.  Watniough,  15  S.  & 
R.  153  ;  Griffith  v.  Wilbing,  3  Binn.  317  ; 
Brightly  Eq.  .Jur.  §§  121,  122,  123  ; 
Adams  Eq.  225  ;  1  Story  Eq.  §  449.  And 
see  Bracken  v.  Kennedy,  4  111.  558  ;  Gil- 
lett  V.  Hall,  13  Conn.  426  ;  Cunningham 
V.  Littlefield,  1  Edw.  Ch.  104.  Partners 
cannot  sue  one  another  at  law  for  any  of 
the  business  or  undertakings  of  the  part- 
nership. This  can  only  be  done  in  chan- 
cery, by  asking  a  dissolution  and  an 
account.  Stone  v.  Fonse,  3  Cal.  294  ; 
Nugent  V.  Locke,  4  Cal.  320 ;  Wilson  r. 
Lassen,  5  Cal.  116  ;  Bamstead  v.  Empire 
Min.  Co.,  5  Cal.  299.  On  the  action  of 
account  at  law,  .see  3  Steph.  Bl.  532  ; 
Foster  v.  Allanson,  2  T.  R.  479;  Jackson 
V.  Stopherd,  4  Tyrw.  330  ;  Elgie  v.  Web- 
ster, 5  M.  &  W.  518  ;  Brown  v.  Tapscott, 
6  M.  &  W.  119.  It  has  been  held,  that 
partners  may  sue  each  other  at  law  for  a 
breach  of  any  distinct  engagement  in  the 
partnership  agreement,  and  that  generally 
adequate  relief  can  in  such  case  be  obtained. 
Wheie  this  can  be  done,  equity  will  not 
interfere.  Kinloch  v.  Hamlin,  2  Hill  Ch. 
19  ;  Duncan  v.  Lyon,  3  Johns.  Ch.  360  ; 
Hunt  V.  Gookin,  6  Vt.  462.  But  where 
two  persons  enter  into  a  partnership  as  to 


508 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XVI. 


§  408.  Account  necessary  upon  Dissolution.  —  Whenever  there 
is  a  dissolution  of  a  partnership,  for  any  cause,  it  would  seem  that 
there  must  be  an  account,  if  it  be  demanded  by  any  party  in 
interest,  (e)  ^     But   it  is  always  possible    for   partners  or   their 

certain  })ropos('d  contnicts,  and,  after  the 
completion  of  one,  one  partner  notifies  the 
other  that  as  to  the  other  contracts  he 
shall  proceed  on  his  sole  account,  the 
remedy  is  by  suit  for  a  breach  of  the  con- 
tract, and  not  by  a  bill  to  account  for 
profits.  Doyle  v.  Bailey,  75  111.  418.  See 
Cross  V.  Cheshire,  7  Exch.  43.  Where 
there  is  a  distinct  promise  to  jiay  an  ascer- 
tained sum,  as  where  a  balance  of  accounts 
is  struck,  assumpsit  will  lie  between  part- 
ners. Hall  V.  Stewart,  12  Pa.  213  ;  Hamil- 
ton V.  Hamilton,  18  Pa.  20.  See  Morrow 
V.  Riley,  15  Ala.  710;  Gridley  v.  Dole,  4 

N.  Y.  486  ;  Miller  v.  Andress,  13  Ga.  366. 
And  where  an  account  stated  resulting  in 
such  balance  is  retained  by  a  partner  with- 
out objection,  a  promise  will  be  implied, 

as  in  other  cases.  Van  Amringe  v.  Ell- 
maker,    4   Barr,  281-     But  in  matters   of 

difficulty  or  controversy  between  partners, 

it  is  now  most  usual  to  resort  to  a  court  of 

equity   for    their   final   adjudication    and 

settlement.     Bracken  v.   Kennedy,   4   111. 

558.  It  will  entertain  jurisdiction,  al- 
though account  or  other  action  would  lie 

between  the  parties.     Gillett  v.  Hall,   13 

Conn.  426  ;  Cunningham  v.   Littlefield,  1 

Edw.  Ch.  104.     And  although  one  partner 

cannot  bind  the  firm  by  deed,  Donaldson 

V.   Kendall,  2  Ga.    Dec.    227  ;   Napier  v. 

Catron,    2    Humph.    534 ;    Dickinson    v. 

Legare,  1  Desaus.537  ;  Skinner  v.  Dayton, 

19  Johns.  513  ;  Fisher  v.  Tucker,  1   Mc- 

Cord  Ch.  170  ;  Williams  v.  Hodgson,  1  H. 

&  J.  474  ;  yet,  in  some  cases,  a  court  of 


equity  will  regard  a  debt  secured  by  the 
specialty  of  one  partner  as  a  simple  con- 
tract debt,  and  hold  all  the  partners  bound 
by  it.  See  Gait  v.  Calland,  7  Leigh,  594  ; 
McNaughten  v.  Partridge,  11  Ohio,  123; 
Christian  v.  Ellis,  1  Gratt.  396  ;  Anderson 
V.  Tompkins,  1  Brock.  456  ;  Kyle  v. 
Roberts,  6  Leigh,  495  ;  James  v.  Bost- 
wick,  Wright,  142.  As  to  pleadings  and 
practice  in  taking  an  account,  see  Auld  v. 
Butcher,  2  Kas.  135. 

(c)  Adams  Eq.  ch.  3,  p.  239  et  seq.  ; 
CoUyer  on  Part.  (3d  Am.  ed.)  §  298  ;  1 
Story  E(i.  Jur.  §  671  ;  Forman  v.  Hanfray, 
2  Ves.  &  B.  329 ;  Harrison  v.  Armitage,  4 
Madd.  143;  Russell  v.  Loscombe,  4  Sim. 
8;  Knowles  v.  Haughton,  11  Ves.  168; 
Waters  v.  Taylor,  15  Ves.  15;  Er  jiarte 
Broadbent,  1  Mont.  &  A.  635.  Sec  Hayes 
V.  Beese,  34  Barb.  151  ;  Vermillion  v. 
Bailey,  27  111.  230;  Pope  v.  Salsman,  35 
Mo.  362.  A  partner  may  have  an  account, 
although  he  has  failed  to  pay  in  the  capital 
he  agreed  to  contribute.  Palmer  v.  Tyler, 
15  Minn.  106.  But  see  Stevenson  v.  Ma- 
thers, 67  111.  123.  An  account  will  not 
be  decreed,  if  it  appears  that  the  party 
jiraying  for  it  has  no  real  cause  of  com- 
plaint, and  that  no  good  purpose  can  be 
served  by  directing  an  account  to  be  taken. 
McKacy  v.  Hebb,  42  Md.  227.  Nor  when 
one  partner  has  received,  by  agreement 
with  his  copartners,  all  he  could  in  any 
event  be  entitled  to,  so  that  he  has  no  in- 
terest in  the  accounts.  Wagner  v.  Wag- 
ner, 50  Cal.  70. 


1  A  partner  may,  upon  dissolution,  maintain  a  bill  for  an  account.  Sharp  v. 
Hibbins,  42  N.  J.  Eq.  543,  9  Atl.  113  ;  Watts  v.  Adler,  130  N.  Y.  646,  29  N.  E.  131; 
Love  V.  Pvhyne,  86  N.  C.  576  ;  Tillar  v.  Cook,  77  Va.  477.  The  bill  lies  even  if  the 
defendant  partner,  being  the  licjuidating  partner,  alleges  that  lie  has  paid  firm  debts  to 
a  greater  amount  than  the  assets.  Sharp  v.  Hibbins,  42  N,  J.  Eq.  543,  9  Atl.  113. 
All  the  partners  nnist  be  parties  to  the  bill.  Young  v.  Hoglan,  52  Cal.  466.  This 
right  to  an  account  can  generally  be  exercised  by  a  partner  only  upon  dissolution, 
Nisbet  V.  Nash,  52  Cal.  540.  But  it  is  not  always  necessary  to  wait  for  a  dissolution. 
Davis  V.  Davis,  60  Miss.  615  ;  ante  §  207. 

Where  the  accounts  are  in  such  confusion  that  nothing  can  be  proved,  the  bill  must 
be  dismissed,  and  the  parties  left  as  they  were.  Clement  r.  Ditterline,  (Ky.)  US. 
W.  658  ;  Succession  of  Gassie,  42  La,  Ann.  239,  7  So.  454  ;  Ashley  v.  Williams,  17 
Ore.  441,  21  Pnc.  556  ;  Slater  v.  Arnett,  81  Va.  432. 


i08.J 


OP   AN    ACCOUNT. 


509 


rc[)resentativcs  to  agree  together  upon  some  arrangements  which 
render  an  account  unnecessary.  Nur  is  this  very  unfrequent  in 
fact.  The  parties  interested  value  the  property,  good-will,  &c., 
and  found  their  arrangements  upon  this  estimate ;  one  paying  to 
the  other  a  sum  of  money,  without  any  account  being  taken.  (/) 
I'ut  such  an  arrangement  can  arise  only  from  an  agreement ;  for 
if  the  pai'ties  differ  as  to  the  value  of  the  property,  or  of  their 
respective  interests  therein,  an  account  must  be  taken,  as  the 
only  means  of  determining  this,  (j)  Indeed,  the  taking  of  an 
account  is  a  fre(iuent  preliminary  to  any  further  action  by  a  court 
of  equity ;  because  by  this  means  alone  can  the  court  ascer- 
tain the  true  relation  of  the  parties  as  to  their  rights  and  obliga- 
tions. (A)  An  account  and  a  dissolution  seem  to  be  so  clearly 
connected,  that  Lord  Eldon,  as  we  have  seen,  was  unwilling  to 
grant  an  account,  unless  the  i)ctitioncr  })raycd  also  for  a  dissolu- 


{/)  7  Jarman  Convey.  31  ;  Cooksoii  v. 
C'ooksoii,  8  Sim.  529.  But  see  Cook  v. 
Colliiigriilge,  Jac.  607,  620.  Where  one 
partner  sells  out  his  interest  to  another, 
the  presunijjtion  is  that  the  price  paid  is 
based  upon  a  settlement  of  accounts.  Wig- 
gin  V.  Goodwin,  63  Me.  389;  Noonan  v. 
Huddleston,  64  111.  11. 

(r/)  Featherstonhaugh  v.  Fenwick,  17 
Ves.  293,  309,  per  Sir  William  Grant: 
"The  next  consideration  is,  whether  the 
terms  upon  which  the  defendants  jjroposed 
to  adjust  the  partnership  concern  were 
those  to  which  the  plaintiff  was  bound  to 
accede.  The  proposition  was,  that  a  value 
should  be  set  upon  the  partnership  stock  ; 
and  that  they  should  take  his  proportion 
of  it  at  that  valuation,  or  that  he  should 
take  away  his  share  of  the  property  fiom 
the  premises.  My  opinion  is  clearly,  that 
these  are  not  terms  to  which  he  was  bound 
to  accede.  They  had  no  more  right  to  turn 
him  out  than  he  had  to  turn  them  out, 
upon  those  terms.  Their  rights  were  pre- 
cisely equal:  to  have  the  whole  concern 
wound  up  by  a  sale,  and  a  division  of  the 
produce.  As,  therefore,  they  never  pro- 
posed to  him  any  terms  which  he  was 
bound  to  accept,  the  consequence  is,  that, 
continuing  to  trade  with  his  stock,  and  at 
his  risk,  they  come  under  a  liability  for 
whatever  might  be  produced  by  that  stock. 
In  the  case  of  Crawshay  v.  Collins,  15  Ves. 
218,  there  was  no  circumstance,  except, 
merely,  that  there  had  been  no  adjustment 


of  accounts  with  the  assignees  of  the  bank- 
rupt. Here,  the  defendants  proposed  ad- 
justing the  accounts  on  certain  terms,  but 
terms  which  the  other  party  was  not  bound 
to  accept.  Though  he,  thinking  they  had 
no  right  to  dissolve  the  partnership,  might 
not  have  gone  into  any  detail  of  the  prin- 
ciples on  which  the  dissolution  should  take 
place,  yet  I  conceive  it  to  have  been  their 
duty,  in  the  first  place,  to  put  themselves 
right  by  offering  to  hira  those  terms  upon 
which  the  law  gave  him  a  right  to  insist; 
and,  not  having  done  so,  but  continuing 
to  trade  with  his  stock  under  the  liability 
to  answer  for  the  profits,  the  same  inquiry 
should  be  directed  as  in  Crawshay  v.  Col- 
lins, to  ascertain  what  that  stock  was  at 
the  period  of  the  dissolution,  what  use  was 
afterwards  made  of  it,  and  what  ]>rofits 
were  produced  by  the  trade."  Wilson  v. 
Greenwood,  1  Swanst.  471,  482;  Rigden 
V.  Pierce,  6  Madd.  353 ;  Cook  v.  Colling. 
ridge,  Jac.  607. 

(/;)  It  has  often  been  held  that  there 
can  be  no  division  of  partnership  pro[ierty 
until  all  the  accounts  of  the  partnership 
have  been  taken,  and  the  clear  interest  of 
each  partner  ascertained  ;  that  the  chan- 
cellor may,  in  a  ))roper  case,  dissolve  the 
partnership,  but  cannot  aid  in  carrying  it 
on.  Baird  v.  Baird,  1  Dev.  &  B.  524; 
McRae  v.  Midvenzie,  2  Dev.  &  B.  232  ; 
Camblat  v.  Tupery,  2  La.  Ann.  10 ;  Ken- 
nedy i\  Kennedy,  3  Dana,  240.  But  see 
Hudson  V.  Barrett,  1  Furs.  Sel.  Cas.  414. 


510 


THE   LAW    OF    PARTNERSHIP. 


[CH.  XVI. 


tioii;  («)  but  this  cannot  be  deemed  a  rule  of  equity,  (/)  although 
in  the  great  majority  of  cases,  where  the  relations  between  the 
partners  are  sucii  that  one  of  them  can  obtain  an  account  only 
through  the  interposition  of  a  court,  a  dissolution  is  and  should 
be  asked,  {k)  ^ 


(t)  Fonnan  v.  Hanfray,  2  Ves.  &  B. 
329. 

{j)  In  Harrison  v.  Arniitage,  4  Madd. 
143,  it  is  said  that  the  rule  laid  down  by 
Lord  Eldon  applies  only  to  the  case  of  an 
injunction,  or  to  a  case  of  interim  man- 
agement. The  following  cases  bear  on  the 
question  ;  Loscombe  v.  Russell,  4  Sim.  8 ; 
Knowles  v.  Ilaughton,  11  Ves.  168  ;  Waters 
V.  Taylor,  15  Ves.  15;  Walworth  v.  Holt, 
4  Mylne  &  C.  619,  635.  In  this  last  case, 
Lord  Cottenhani  made  a  very  full  review 
of  the  authoiities ;  deciding  that  a  relief 
of  this  limited  kind  could  be  given  without 
a  prayer  for  dissolution,  and  a  final  wind- 
ing up  of  the  affairs  of  the  company.  This 
rule,  although  not  without  great  conflict, 
seems  now  to  be  decided.  Richardson  v. 
Hastings,  7  Beav.  301  ;  Fairtliorne  i: 
\Veston,  3  Hare,  387;  Miles  v.  Thomas,  9 
Sim.  609  ;  Goodman  v.  Whitcomb,  1  Jac. 
&  W.  593 ;  Richards  v.  Davies,  2  Russ.  & 
M.  347  ;  Richardson  v.  Hastings,  cited  in 
3  Hare,  391;  Chappie  v.  Cadell,  Jac.  537. 

(k)  Loscombe  v.  Ru.ssell,  4  Sim.  8 ; 
Waters  v.  Taylor,  15  Ves.  10  ;  Forman  v. 
Hanfray,  2  Ves.  &  B.  329  ;  Goodman  v. 
Whitcomb,  1  Jac.  &  W.  589  ;  Chapman  v. 
Beach,  Jan.  &  W.  594 ;  Marshall  v.  Col- 
man,  2  Jac.  &  W.  266  ;  Vansandau  v. 
Moore,  1  Russ.  441  ;  Pigott  v.  Bagley, 
McClel.  &  Y.  569 ;  Krebell  v.  White,  2  Y. 
&  C.  15.     In  an  action  by  one  partner  for 


a  dissolution  of  the  jiartnership,  and  an 
account,  &c.,  alleging  that  dividends  of 
jirofits  were  to  be  made  at  stated  periods, 
the  court  may  decree  the  ])ayment  of  tha 
sum  due  for  such  dividends,  before  final 
distribution  of  the  assets.  O'Conner  v. 
Stark,  2  Cal.  155.  The  ordinary  course  is 
to  pray  that  the  partnership  may  be  dis- 
solveil,  and  the  surjilus  assets  distributed  ; 
but  this  practice  has  been  relaxed  in  favor 
of  joint-stock  comi)anies,  and  of  other 
numerous  partnershi[)s,  and  bills  have  been 
sustained  which  asked  more  limited  lelief ; 
namely,  that  the  assets  of  an  abandoned 
or  insolvent  partnership  might  be  collected 
and  apjilied  in  discharge  of  the  debts,  leav- 
ing the  questions  of  dissolution  and  con- 
tribution as  between  the  partners  entirely 
open  for  future  settlement.  Adams  Eq. 
241  •  Goodman  v.  Whitcomb,  1  Jac.  &  W. 
572;  Marshall  v.  Colman,  2  Jac.  &  W. 
266;  Glassington  v.  Thwaites,  1  Sim.  & 
St.  124  ;  Loscombe  v.  Russell,  4  Sim.  8 ; 
W^al worth  v.  Holt,  4  Mylne  &  C.  619; 
Richardson  v.  Hastings,  7  Beav.  301,  323  ; 
Apperly  v.  Page,  1  Phillips,  779 ;  Fair- 
thorue  v.  Weston,  3  Hare.  387. 

A  creditor  cannot  file  a  bill  to  stop  a 
partnership,  and  wind  up  its  concerns.  It 
is  only  at  the  instance  of  a  partner  that 
this  can  be  done.  Clement  v.  Foster,  3 
Ired.  Eq.  213. 


1  We  have  already  seen  {ante,  §  206  etseq.)  that  ancillary  relief  may  be  given  to  a 
partner  during  the  pendency  of  a  bill  for  an  account.  Thus  a  partner  maybe  enjoined 
from  selling  partnership  property  if  the  injury  would  be  irreparalde.  Wilkinson  v. 
Tilden,  9  F.  R.  683.  So  a  partner  may  secure  protection  against  a  partnership  claim 
wrongfully  created  by  his  copartner.  Johnson  v.  Battler,  31  N.  J.  Eq.  35.  In  some 
cases  the  partnership  creditors  may  intervene,  as  to  secure  the  benefit  of  a  fund  in  the 
hands  of  a  partner  resulting  from  the  fiau  lulent  sale  of  partnership  property.  Grossini 
V.  Perazzo,  66  Cal.  545. 


§  409.1 


OF   AN    ACCOUNT. 


511 


SECTION   XL 

OF   OPENING    AN    ACCOUNT    FOR    ERROR. 

§  409.  Account  not  opened  after  Lapse  of  Time.  —  Mere  errors 
alone  will  not  always  lead  to  the  opening  and  restating  of  accounts. 
If  the  parties  agree,  as  they  sometimes  do,  that  closed  accounts 
shall  not  be  opened  for  error,  after  the  death  of  the  parties,  or 
after  a  fixed  period,  a  court  of  equity  will  always  respect  such  an 
agreement,  (^)  unless  gross  mistake,  fraud,  or  great  danger  of 
fraud,  be  shown,  [ni)^     And  the  same  reasons  which  cause  part- 


(Z)  Gainsborough  v.  Stork,  Barnard. 
312.  See  Heath  v.  Corning,  3  Paige, 
566  ;  Stoughton  v.  Lynrh,  2  Jolins.  Ch. 
218.  In  Mackellar  v.  Wallace,  8  Moore 
P.  C.  378,  the  following  distinction  is 
drawn :  "  Parties  having  accoiuits  be- 
tween them  may  meet  and  agree  to  settle 
those  accounts  by  the  ascertainment  of 
the  exact  bahmce ;  it  may  be  neeessaiy 
for  that  case,  and  probably  it  is  necessary 
in  most  cases,  that  vouchers  should  be 
jiroduced,  and  that  all  the  information 
possessed  on  one  side  and  the  other  should 
be  furnished  in  the  settlement  of  that 
account ;  and,  if  it  afterwards  turn  out 
that  there  were  errors  in  that  account,  it 
is  a  sufficient  ground  for  opening  such 
account,  and  setting  it  right  in  a  court  of 
equit}^  If,  on  the  other  hand,  persons 
meet  and  agree,  not  to  ascertain  the  exact 
balance,  but  a  sum  which  one  is  willing  to 
pay,  and  the  other  is  content  to  receive  as 
the  result  of  those  a(!eounts,  —  in  a  case 
of  that  sort,  it  is  obvious  that  the  produc- 
tion of  vouchers  is  entirely  unnecessary, 
and  errors  in  the  account  are  entirely  out 
of  the  question  ;  for  the  very  object  of  the 
parties  is  to  avoid  the  necessity  for  pro- 
ducing those  vouchers,  upon  the  assump- 
tion that  there  are  or  may  be  errors  in  the 
account  so  settled.  Therefore,  it  is  either 
an  account  stated  and  settled,  in  the  for- 
mal sense  of  the  expression,  or  it  is  the 
case  of  a  settlement  by  compromise." 


(«i)  Oldaker  v.  Lavender,  7  Sim.  239. 
In  Mackellar  v.  Wallace,  cited  supra,  the 
court,  after  laying  down  the  doctrine  as 
above,  go  on  to  say  :  "In  either  case,  the 
transaction  might  be  vitiated  by  fraud. 
In  either  case,  it  is,  good  for  nothing  if, 
either  from  the  collusion  of  the  parties,  or 
from  the  circumstances  under  which  the 
settlement  takes  place,  it  is  proved  in  a 
court  of  equity  that  the  transaction  was 
not  so  fairly  and  so  fully  understood  be- 
tween the  parties,  either  from  the  confu- 
sion in  which  it  was  involved,  or  from 
nnsrepresentation  made  on  the  one  side  or 
the  other,  as  it  ought  to  have  been,  and 
that  injustice  has  been  done  on  either 
side."  Slee  v.  Bloom,  20  Johns.  669,  5 
Johns.  Ch.  366  ;  Lee's  Admr.  v.  Keed,  4 
Dana,  112  :  Botifeur  v.  Weynian,  1  Mc- 
Cord  Ch.l56;  Barrow  v.  Hhinelander,  1 
Johns.  Ch.  550  ;  Johnson's  Executors  r. 
Ketchum,  3  Green  Ch.  364  ;  Bloodgood 
V.  Zeily,  2  Cai.  Cas.  124  ;  Gray  v.  Wash- 
ington, Cooke,  321 ;  Chappedelaine  v. 
Dechenaux,  4  Cranch,  309 ;  Stoughton  v. 
Lynch,  2  Johns.  Ch.  218,  219,  1  Madd. 
Ch.  Pr.  (2d  ed.)  103,  262,  280  ;  Henick 
V.  Ames,  8  Bosw.  115  ;  Cann  v.  Cann,  1 
P.  Wms.  727  ;  Stapilton  v.  Stapilton,  1 
Atk.  10  ;  PuUen  v.  Keady,  2  Atk.  592  ; 
Lewis  ?'.  Pead,  1  Ves.  Jr.  19  ;  Vernon  v. 
Vawdry,  2  Atk.  119,  2  Eq.  Cas.  Abr.  8; 
Gordon  v.  Gordon,  3  Swanst.  476;  Halhed 
V.  Marke,  3  Swanst.  444,  note,  1  Hoven- 


1  Where  a  partnership  account  has  been  settled,  it  will  not  generally  be  disturbed. 
This  is  especially  true  where  the  partners  have  acquiesced  in  the  account  for  a  number 


512 


THE    LAW    OF    PARTNERSHIP. 


[CH.  xvr. 


ners  to  make  such  an  agTccmcnt  would  induce  a  court  to  open 
an  account  only  for  im])ortant  error,  after  the  death  of  parties  or 
long  acquiescence,  (m)  But  it  has  been  held  that  where  a  partner- 
ship had  existed  for  eight  years,  and  during  this  time  accounts 


den  on  Frauds,  160  ;  Osmond  v.  Fitzroy, 
3  P.  Wuis.  130  ;  Willis  v.  Jeniegan,  2 
Atk.  251  ;  Milnes  v.  Cowley,  8  Price,  620  ; 
Ijloyd  V.  Passingliam,  Cooper,  156 ;  Beau- 
mont I'.  Biamley,  1  Turner,  51  ;  Evans  v. 
Bicknell,  6  Ves.  183,  189  ;  Pomeroy  v. 
Benton,  57  Mo.  531. 

(n)  A  suit  to  impeacdi  an  account 
ought  to  be  brought  within  a  reasonable 
time,  or  at  farthest,  within  the  statutory 
period  for  commencing  an  action  at  law 
uiiou  matters  of  account.  Lupton  v.  Jan- 
ney,  13  Pet.  381.  And  where  the  bar 
of  the  statute  is  inapplicable,  —  namely, 
where  the  demand  is  purely  equitable,  — 
the  court  is  reluctant  to  interfere  after  a 
considerable  lapse  of  time ;  particularly 
after  the  death  of  parties  whose  transac- 
tions are  involved  in  the  inquiiy.  Adams 
Eq.  227;  Baker  v.  Biddle,  Bald.  418; 
Ellison  V.  Moffat,  1  Jolins.  Ch.  46  ;  Ray 
V.  Bogart,  2  Johns.  Cas.   432  ;  liayner  v. 


Pearsall,  3  Johns.  Ch.  578,  586  ;  Mooers 
V.  White,  6  Johns.  Ch.  360,  370  ;  Boiling 
V.  Boiling,  5  Munf.  334  ;  Randolph  v. 
Randolph,  2  Call,  537  ;  Dexter  v.  Arnold, 
2  Sumn.  108  ;  Wilde  v.  Jenkins,  4  Paige, 
481  ;  Dakin  v.  Demming,  6  Paige,  95 ; 
Bloodgood  V.  Zeily,  2  Cai.  Cas.  124  ; 
Gregory  v.  Forrester,  1  McCord  Ch.  318, 
382  ;  Radcliffe  v.  Wightman,  1  McCord 
Ch.  408  ;  Hiitchins  v.  Hope,  7  Gill,  119  ; 
Chesson  v.  Chesson,  8  Ired.  Eq.  141. 
But,  where  there  has  been  fraud,  the 
court  will  open  and  examine  accounts 
after  any  length  of  time,  even  though  the 
person  who  committed  the  fraud  be  dead. 
Botifeur  v.  Weyman,  1  McCord  Ch.  156. 
But  it  must  be  shown  that  the  fraud  was 
not,  and  could  not  with  reasonable  dili- 
gence be  discovered,  until  within  six  years 
before  the  commencement  of  suit.  Ogdea 
V.  Astor,  4  Sandf,  311. 


of  years.  Claflin  v.  Bennett,  51  F.  R.  693  ;  Bell  v.  Hudson,  73  Cal.  285,  14  Pac.  791  ; 
Valentine  v.  Wysor,  123  Ind.  47,  23  N.  E.  1076  ;  Todd  v.  Rafferty,  30  N.  J.  Eq.  254  ; 
King  V.  White,  63  Vt.  158,  21  Atl.  535.  After  the  statute  of  limitations  has  run,  it 
would  probably  be  reopened  only  in  case  of  fraud.  Todd  v.  Rafferty,  30  N.  J.  Eq. 
254.  But  an  account  may  be  reopened  in  equity  within  a  reasonable  time  for  fi-au(l, 
omission,  or  mistake ;  and  an  injured  party  may  be  allowed  to  "  surcharge  and 
falsify."  Harrison  v.  Dewey,  46  Mich.  173,  9  N.  W.  152;  Cobb  v.  Cole,  44  Minn. 
278,  46  N.  W.  364  ;  s.  c.  52  N.  W.  985;  Silver  v.  St.  Louis,  1.  M.  &  S.  Ry.,  72  Mo. 
194,  5- Mo.  App.  381  ;  Farrington  v.  Harrison,  44  N.  J.  E(i.  232,  10  Atl.  105  :  King 
V.  Leighton,  100  N.  Y.  386,  3  N.  E.  594  ;  Powell  v.  Heisler,  16  Ore.  412,  19  Pac. 
109  ;  Varner's  Appeal,  (Pa  )  16  Atl.  98,  2  Monaghan,  228  ;  Henry  v.  Chaj.man,  (Tex.) 
16  S.  W.  543;  Mahnke  v.  Neale,  23  W.  Va.  57  ;  Hoyt  v.  McLaughlin,  52  Wis.  280,  8 
N.  W.  889. 

The  mistake  or  fraud  which  is  relied  upon  must  be  clearly  stated  in  the  bill. 
!Merriwether  v.  Hardeman,  51  Tex.  436.  And  it  must  be  clearly  and  certainly  proved. 
Powell  V.  Heisler,  16  Ore.  412,  19  Pac.  109;  Varner's  Appeal,  (Pa.)  16  Atl.  98,  2 
Monaghan,  228;  Mahnke  v.  Neale,  23  W.  Va.  57;  Hoyt  t».  McLaughlin,  52  Wis.  280, 
8  N.  W.  889.  Where  the  facts  upon  which  the  application  for  reopening  an  account 
is  based  were  known  to  the  applicant  at  the  time  of  settlement,  equity  will  refuse  to 
act.     Quinlan  v.  Reiser,  66  Mo.  603. 

A  former  partial  settlen)ent  is  no  bar  to  a  bill  for  an  account.  Thompson  v. 
Walker,  40  La.  Ann.  676,  4  So.  881 ;  Gleason  v.  Van  Aernam,  9  Ore.  343.  But  if  it 
was  a  fair  settlement,  the  account  will  be  limited  to  the  unsettled  part  of  the  business. 
Stretch  v.  Talmadge,  65  Cal.  510,  4  Pac.  513  ;  Burke  v.  Fuller,  41  La.  Ann.  740,  6 
So.  557  ;  Dobbins  v.  Tatem,  (N.  J.)  25  Atl.  544. 


§  410.] 


OF   AN    ACCOUNT. 


613 


had  been   taken,  witliont  cancellation  of  books,  releases,  or  dis- 
charges in  full,  an  account  might  be  called  for.  (nn^ 

§  410.  Accouuts  opened  for  Fraud.  —  Where  there  is  danger  of 
fraud,  or  where  the  accounts  were  made  up  by  parties  having 
unrestricted  power,  and  acting  under  strong  personal  interest,  as 
in  the  case  of  accounts  between  an  executor  partner  and  the 
legatees  of  the  deceased  partner,  a  long  acquiescence  will  not 
establish  them  beyond  the  reach  of  inquiry  ;  (o)  and  in  one  case, 


{?i?()  Lynch  V.  Bitting,  6  Jones  Eq. 
238.  And  see  Stephens  v.  Orinan,  10 
Fia.  9. 

(o)  A.,  B.,  &  C,  in  1796,  became  part- 
ners, as  nieiuliants,  under  articles  tor 
seven  years,  and  it  was  provided,  that,  if 
either  pai-ty  died  in  the  mean  time,  the 
partnerslup  should  be  determined,  as  to  his 
share,  from  the  first  of  May  following  his 
death  ;  and  that  thereupon  an  account 
should  be  taken,  and,  after  payment  of 
debts,  "payment,  appropriation,  and  de- 
livery "  should  be  made,  between  the  sur- 
viving partners  and  the  executors  of  the 
deceased  partner,  of  the  residue  of  the 
moneys,  goods,  &c.,  of  the  partnership. 
In  1801,  B.  died,  and  appointed  his  wife 
and  surviving  partners,  A.  and  C,  his 
executors  and  guardians  of  his  infant 
children,  who  were  his  residuary  legatees. 
A.  and  C,  only,  proved  the  will,  and 
having  caused  a  valuation  and  account  of 
the  partnership  assets  to  be  made,  a  bal- 
ance sheet  was  settled  up  to  the  first  of 
May,  1801,  showing  what  amount  was 
due  to  the  testator's  estate  (which  in- 
cluded outstanding  credits  to  a  large 
amount),  and  his  estate  was  credited  ac- 
cordingly in  the  partnership  books,  and 
the  partnership  continued  by  the  surviv- 
ing partners,  but  no  severance  of  the 
assets  was  made.  In  May,  1809,  the 
eldest  son  came  of  age,  and  an  account 
was  stated,  by  the  executors,  of  the  tes- 
tator's residuary  personal  estate,  but  which 
assumed,  as  its  basis,  the  valuation  and 
account  made  on  the  testa+nr's  death. 
Another  account  was  stated  of  the  debts, 
and  credits  remaining  unpaid  and  uncol- 
lected, showing  what  was  then  divisible  ; 
and  another  of  the  moneys  expended  for 
the  eldest  son's  maintenance.  A  deed, 
dated  September,  1809,  between  A.  and 
the  eldest  son,  was   executed,  on  which 


these  accounts  were  indorsed,  and  A.  cov- 
enanted for  the  payment,  by  instalments, 
of  the  share  due  to  the  eldest  son,  so  far 
as  the  same  had  lieen  realized ;  and  tlie 
eldest  son  declared  he  was  "content  and 
satisfied  with  the  disclosures  thus  far  made 
and  accounts  thus  far  given,"  &c.  ;  and 
it  was  proviiled  that  he  should  not  be 
prevented  from  claiming  any  further  share 
"not  as  yet  received,  or  fallen  in,  or 
accounted  for."  In  1810,  1815,  1821, 
1826,  and  1830,  changes  took  place  in 
the  partnership  firm.  There  were  three 
younger  children,  who  attained  twenty- 
one,  respectively,  in  1812,  1813,  and  1820, 
when  similar  accounts,  founded  on  the 
same  basis,  were  stated  in  each  of  them 
by  the  executors  ;  and  a  similar  deed  of 
settlement  executed  by  the  two  former, 
and  a  release  by  the  latter,  and  further 
divisions  of  the  testator's  assets  made  ac- 
cordingly. In  1816,  the  only  other  child 
died  an  infant,  and  then  also  a  division  of 
assets  was  made;  and,  in  1822,  a  deed  of 
release  was  executed  by  the  trustees  of  the 
settlement  of  one  of  the  daughters,  in 
respect  of  a  balance  not  included  in  the 
deed  executed  by  her.  The  bill  was  filed 
in  1831,  by  the  several  children  and  their 
representatives.  It  was  held  that  A.  and 
C,  being  executors  and  guardians  as  well 
as  surviving  partners,  and  the  release 
being  partial  only,  and  founded  on  in- 
sufficient knowledge  by  the  cestuis  que 
trustent  of  the  partnership  affairs  and  ac- 
counts, the  plaintiffs  were  not  precluded 
by  their  deeds  or  by  lapse  of  time,  from 
inquiring  into  the  mode  in  which  the 
assets  of  the  old  firm  had  been  dealt 
with,  and  claiming  a  share  iii  the  profiti 
arising  from  the  testator's  assets  having 
been  used  in  the  business  of  the  success- 
ive partnerships.  Wedderburn  v.  Wedder- 
burn,  2  Keen,  722,  4  Mylne  &  C  41 
33 


514 


THE   LAW    OF   PAETNERSHIP. 


[CH.    XVI. 


elsewhere  referred  to,  they  were  opened  after  some  thirty  years 
of  acquiescence.  (^)  Where  fraud  had  been  committed,  an 
account  was  opened  after  nearly  as  long  a  tin^ie,  although  the 
fraudulent  partner  had  long  been  dead.  (^)  And  if  the  bill 
praying  for  the  opening  of  a  settled  account  do  not  allege  fraud, 
but,  in  the  o|)inion  of  the  court,  the  facts  stated  imply  fraud,  the 
prayer  will  be  granted,  (r) 

§  411.  Accounts  opened  for  Error.  —  A  party  seeking  to  open 
an  account  for  error  must  specify  the  errors  so  particularly  that 
each  may  be  judged  of  by  itself.  For  the  court  may  be  unwilling 
to  open  an  account  if,  when  it  is  opened,  it  may  be  examined  and 
unravelled  from  end  to  end.  (s)     But  they  may  be  willing  to  per- 


And  see  Cook  v.  CoUingridge,  1  Jac.  607  ; 
Walker  v.  Synionds,  3  Swanst.  64,  69  ; 
Gregory  v.  Gregory,  Cooper,  201,  Jac. 
631  ;  Champion  v.  Rigby,  1  Russ.  &  M. 
539  ;  Chalmers  v.  Bradley,  1  Jac.  &  W. 
51  ;  Downs  v.  Gazebrooke,  3  Meriv.  200  ; 
Ex  parte  Lacey,  6  Ves.  628  ;  Cockerell 
V.  Cholmeley,  1  Russ.  &  M.  425,  on  the 
strictness  of  equity  in  similar  cases  of 
trust.  See  also  Smith  v.  Clay,  3  Bro.  C. 
C.  639,  note  ;  Townsend  v.  Townsend,  1 
Cox,  28  ;  Bonney  f.  Ridgard,  1  Cox,  145  ; 
Beckford  v.  Wade,  17  Ves.  87,  97; 
Hickes  v.  Cook,  4  Dow,  16,  on  the  ques- 
tion of  the  length  of  time  that  had 
elapsed.  Dickenson  v.  Lord  Holland,  2 
Beav.  310  ;  Purcell  v.  Cole,  1  Longf.  & 
T.  449  ;  Edwards  v.  Meyrick,  2  Hare,  60, 
6  Jur.  924. 

(p)  Wedderburn  v.  Wedderbum,  2 
Keen,  722,  4  Mylne  &  C,  41.  And  see 
Hoe  V.  Richards,  2  Beav.  305.  Under 
particular  circumstances  of  fraud,  impo- 
sition, and  delay,  a  court  of  equity  will 
decree  an  account  of  rents  and  profits  of 
an  estate  after  an  adverse  possession  of 
fifty  years.  Stackpole  v.  Davoren,  1  Bro. 
P.  C.  9.  And,  in  another  case,  where  an 
entry  in  an  administrator's  account,  which 
had  been  settled,  was  shown  to  be  fraud- 
ulently made,  the  whole  account  was 
opened,  notwithstanding  the  lapse  of  forty 
years  since  the  death  of  the  intestate, 
seventeen  since  the  settlement  of  the  ac- 
count, and  more  than  two  since  the  dis- 
covery of  the  entry  complained  of.  Special 
directions  were  inserted  in  a  decree  for 
the  protection   of  the   accounting   party. 


Allfrey  v.  Allfrey,  1  Macn.  &  G.  87,  1 
Hall  &  Twells,  179,  13  Jur.  269. 

iq)  Vernon  v.  Vawdry,  2  Atk.  119  ; 
Botifeur  v.  Weyman,  1  McCord  Cli.  161  ; 
Lowe  V.  Farlie,  2  Madd.  Ch.  102  ;  Beame's 
Pleas  in  Eq.  232. 

(r)  Farnham  v.  Brooks,  9  Pick.  212. 
And  see  Worndey  v.  Wormley,  8  Wheat. 
421  ;  FuUagar  v.  Clark,  18  Ves.  481. 
Courts  of  equity  feel  themselves  at  liberty 
to  infer,  juilicially,  a  fraudulent  purpose, 
from  suspicious  circumstances,  well  cor- 
roborated and  in  no  way  rebutted,  though 
such  circumstances  fall  short  of  legal  proof. 
Earl  of  Chesterfield  v.  Janssen,  2  Ves.  Sen. 
155  ;  Walker  v.  Symonds,  9  Swanst.  71  ; 
Taylor  v.  Jones,  2  Atk.  602  ;  Stileman  v. 
Ashdown,  2  Atk.  480.  A  party  who  has 
once  admitted  an  account  to  be  correct 
cannot  afterwards  tile  a  bill  to  have  the 
account  taken  in  equity,  upon  the  mere 
allegation  that  he  had  no  means  of  ascer- 
taining that  the  account  so  delivered  was 
correct,  without  charging  specific  acts  of 
fraud  against  the  defendant  ;  and  it  is  not 
necessarily  an  allegation  of  fraud  to  say 
that  the  accounting  jiarty  agreed  to  deliver 
up  certain  chattels  demanded  by  the  other, 
upon  condition  of  having  his  alleged  bal- 
ance admitted  and  paid.     Darthery  v.  Lee, 

2  Y.  &  C.  5  ;  President,  &c.  of  Orphan 
Board  r.  Van  Reenen,  1  Knapp,   100. 

(s)  Union  Bank  v.  Knapp,  3  Pick.  113  ; 
Kinsman  v.  Barker,  14  -Ves.  579  ;  Shep- 
herd V.  Morris,  4  Beav.  252  ;  Chambers  v. 
Goldwin,  9  Ves.  254  ;  Calvit  v.  Markham, 

3  How.  (Miss.)  343  ;  Mebane  v.  Mebane, 
1   Ired.    Eq.    403  ;    De    Montmorency   v. 


§  411-] 


OF    AN    ACCOUNT. 


515 


mit  the  plaintiff  to  surcharge  and  falsify,  (f)'  If  an  omission 
has  been  made  of  a  credit  due,  the  plaintiff,  by  showing  the  same, 
will  be  permitted  to  add  it ;  and  this  is  a  surcharge.     If  a  wrong 


Deverenx,  1  Drii.  k  W.  119  ;  Leaycraft  v. 
Dempsey,  15  Wend.  83  ;  Baker  v.  Bidille, 
1  Bald.  394,  418  ;  Baiiibrid<,'e  v.  Wilcoeks, 
1   Bald.  536,   540  ;  Coiise(jua  v.   Fanning, 

3  Johns.  Ch.  587,  17  Johns.  511,  1  Madd. 
Ch.  Pr.  (4th  Am.  ed.)  103;  Taylor  v. 
Hamlin,  2  Bro.  C.  C.  310  ;  Wilde  v.  Jen- 
kins, 4  Paige,  481  ;  Weed  v.  Small, 
7  Paige,  573  ;  Hobart  v.  Andrews,  '21 
Pick.  526  ;  Chapjjedelaine  v.  Dechenaux, 

4  Cranch,  306  ;  Bullock  v.  Boyd,  2  Edw. 
Ch.  293  ;  Philips  v.  Iklden,  2  Eilw.  Ch. 
1  ;  Stoughton  v.  Lynch,  2  Johns.  Ch.  209  ; 
Hickson  v.  Aylward,  3  Moll.  1.  Where  an 
account  stated  is  open  a  long  time,  as  six- 
teen years  after  it  has  been  rendered,  it 
will  not  generally  be  opened.  It  will  be 
opened  as  to  fraud  or  mistakes  cliarged  in 
the  bill,  and  so  far  proved  that  the  court 
is  satisfied  they  ought  to  be  corrected  ; 
and,  when  some  such  errors  are  proved, 
then  as  to  other  errors  charged,  which  the 
court  is  satisfied  ought  to  be  made  the 
subjects  of  further  examination.  Ogden  r. 
Astor,  4  Sandf.  311.  And  see  Clarke  v. 
Tipping,  9  Beav.  282  ;  Holland  v.  Holland, 
6  Ired.  Eq.  407  ;  Pritt  v.  Clay,  6  Beav. 
503  ;  Scott  V.  Milne,  5  Beav.  215,  affirmed 
12  L.  J.  N.  s.  Ch.  233,  7  Jur.  709  ;  Jones 
t'.  Latimer,  1  Jur.  980  ;  Johnson  v.  Curtis, 
3  Bro.  C.  C.  226  ;  Taylor  v.  Hayling,  1 
Cox,  435  ;  Dunbar  v.  Lane,  1  Bro.  P.  C. 
3  ;  Maund  v.  Allies,  5  Jur.  860  ;  Milliken 
V.  Gardner,  37  Pa.  456.  The  court  will 
not  open  a  settled  account  where  it  has 
been  signed,  or  a  security  taken  on  the 
foot  of  it,  unless  the  whole  transaction 
appears  fraudulent,  upon  errors  specified 
in  the  bill,  and  sujiported  by  evidence. 
Drew  V.  Power,  1   Sch.   &    l"  182.     See 


Parker  v.  Jonte,  15  La.   Ann.  290,  as  to 
alleged  errors  in  tiooks. 

(t)  Consequa  v.  Fanning,  3  Johns.  Ch. 
587  ;  Tioup  v.  Haight,  Hopk.  239  ;  Chap- 
pedelaine  v.  Dechenaux,  4  Cranch,  306  ; 
Kedman  v.  Green,  3  Ired.  Ei].  54  ;  Bullock 
V.  Boyd,  1  Hoff.  Ch.  294;  Nourse  v. 
Prime,  7  Johns.  Ch.  69;  Philips  v.  Belden, 
2  Edw.  Ch.  1  ;  Grover  *;.  Hall,  3  H.  &  J. 
43;  Freeland  v.  Cocke,  2  Munf.  352; 
Compton  V.  Greer,  2  Dev.  Ch.  93  ;  Jliller 
V.  Wornack,  Freem.  Ch.  486 ,  Lilly  v. 
Kroesen,  3  Md.  Ch.  83 ;  Williams  v. 
Savage  Manuf.  Co.,  1  Md.  Ch.  306;  Kins- 
man V.  Barker,  14  Ves.  579  ;  Vernon  v. 
Vawdry,  2  Atk.  119,  Barn.  Ch.  280,  305; 
Sewel  V.  Bridge,  1  Ves.  Sen.  297 ;  Earl 
Pomfret  v.  Lord  Windsor,  2  Ves.  Sen. 
482 ;  Pitt  17.  Cholmondeley,  2  Ves.  Sen. 
565  ;  Brownel  v.  Brovvnel,  2  Bro.  Ch.  62 ; 
Chambers  v.  Goldwin,  9  Ve.s.  254  ;  Anon., 
2  E(i.  Abr.  12.  Plaintiff,  in  his  bill,  hav- 
ing assigned  150  eirors  in  five  .stated 
accounts,  an. order  was  made  on  him  to 
pick  out  those  he  would  insist  on,  and,  if 
the  court  should  be  of  opinion  they  were 
not  errors,  to  con.sent  to  waive  the  rest. 
If  the  court  thought  them  errors,  there 
would  be  good  cause  either  to  decree  an  open 
account,  or  give  plaintiff  leave  to  surcharge 
and  falsify.  Rodney  v.  Hare,  Mos.  296. 
See  further,  on  the  question  of  surcharging 
and  falsifying,  Roberts  v.  Kuffin,  2  Atk. 
112  ;  Chambers  v.  Goldwin,  5  Ves.  837  ; 
Ex  parte  Townshend,  2  Moll.  242  :  Hick- 
sou  V.  Aylward,  3  Moll.  14  ;  Davies  v. 
Spurling,  1  Tamlyn,  199,  1  Russ.  &  M. 
64  ;  Millar  v.  Craig,  6  Beav.  433.  The 
party  complaining  of  errors  in  a  settled 
account  should  make  the  errors  appear  by 
proof.     Bry  v.  Cook,  15  La.  Ann.  493. 


^  "Surcharge"  means  to  add  an  omitted  item  in  the  account ;  '*  falsify,"  to  correct 
a  wrong  item.  "  Upon  a  liberty  to  the  plaintiff  to  surcharge  and  falsify,  the  onus  pro- 
bandi  is  always  on  the  party  having  that  liberty  ;  for  the  court  takes  it  as  a  stated 
account,  and  establishes  it.  But  if  any  of  the  parties  can  show  an  omission,  for  which 
credit  ought  to  be,  that  is  a  surcharge  ;  or  if  anything  is  inserted  that  is  a  wrong 
charge,  he  is  at  liberty  to  show  it,  and  that  is  a  falsification.  But  that  must  be  by 
proof  on  his  side.  And  that  makes  a  great  difference  between  the  general  cases  of  an 
open  account,  and  where  only  to  surcharge  and  falsify  ;  for  such  must  V)e  made  out." 
Lord  Hardwicke,  L.  C,  in  Pitt  v.  Cholmondeley,  2  Ves.  Sen.   565,   566. 


516 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XVI. 


charge  is  stated  in  the  account,  the  plaintiff  may  be  permitted  to 
remove  it ;  and  this  is  falsification,  {u}  It  may  be  added,  as  a 
general  remark,  that  whenever  accounts  are  stated  by  persons 
having  great  trust  reposed  in  them,  and  great  ))Ower,  a  court  of 
equity  allows  a  latitude  in  opening  and  examining  such  accounts, 
bearing  some  proportion  to  that  trust  and  power,  (v) 

§  412.  Plaintiff  must  pay  in  a  Debt  due  from  Him.  —  In  Eng- 
land, the  practice  is  quite  uniform  of  requiring  a  partner  who 
petitions  for  an  account,  and  either  admits  expressly  or  by  impli- 
cation that  he  is,  or  is  shown  to  be,  owing  to  the  partnership  a 
private  debt  or  balance,  to  pay  that  debt  or  balance  into  court 
before  a  decree  will  issue,  (w)  This  is  not  true  of  a  debt  on 
partnership  account ;  for  if  a  partner  avers  that  he  has  taken 
money  from  the  firm,  but  avers  also  that  a  balance  is  still  due  to 
him,  he  is  not  required  to  pay  into  court  the  money  thus  taken, 
unless  special  reasons  exist  for  the  requirement.  (2;)     The  rule 


(m)  In  reference  to  these  ternifi,  see  1 
Story  Eq.  Jur.  §  525  ;  Pitt  v.  Cholmon- 
deley,  2  Ves.  Sen.  565,  566  ;  Perkins  v. 
Hart,  11   Wheat.  237,  256. 

(v)  Matthews  v.  Wallyn,  4  Ves.  118  ; 
Newman  v.  Payne,  2  Ves.  Jr.  199  ;  Pitt  v. 
Chohnondeley,  2  Ves.  Sen.  565  ;  Stough- 
ton  V.  Lynch,  2  Johns.  Ch.  217  ;  Higgin- 
son  V.  Fabre,  3  Desans.  93.  Thus,  in 
ordinary  cases,  the  rule  is,  that  the  estab- 
lishment of  a  material  mistake  is  necessary 
to  induce  the  court  to  give  a  decree  enti- 
tling the  party  to  surcharge  and  falsify 
an  account.  But,  where  the  relation  of 
attorney  and  client  subsists,  the  ordinary 
rule  does  not  prevail  ;  for  there,  though 
the  party  only  alleges  generally  that  the 
accounts,  as  settled,  are  erroneous,  the 
court  will,  if  sufficient  cause  be  shown, 
make  a  decree  opening  those  accounts. 
Lawless  v.   Mansfield,  1  Dru.  &  W.    557. 

(?/))  Vin.  Abr.  Partners  (E),  5  ;  Melio- 
ruclii  V.  Royal  Ex.  Ass.  Co.,  1  Eq.  Abr. 
8  ;  Gold  I'.Canhain,  2  Swanst.  325,  1  Ch. 
Ca.  311.  See  Mulhollan  v.  Eaton,  11  La. 
291.  Payment  of  money  into  court  is 
directed  where  the  defendant  admits  money 
to  be  in  his  hands  which  he  does  not  claim 
as  his  own,  and  in  which  he  admits  that 
the  applicant  is  interested.  Adams  Eq. 
350.  See,  on  this  subject,  Hosack  v. 
Rogers,  9  Paige,  468  ;  Clagett  v.  Hall,  9 
G.  &  J.  81 ;  Contee  v.  Dawson,  2  Bland, 


293  ;  Nokes  v.  Leppings,  2  Phillips,   19  ; 
Maddox  v.  Dent,  4   Md.   Ch.  543. 

{x}  Foster  v.  Donald,  1  Jac.  &  W.  252. 
In  this  case,  the  plaintiffs  and  the  defend- 
ant carried  on  business  together  in  the 
north  of  England.  It  had  been  proposed 
to  dissolve  the  partnership  ;  and  the  terms 
of  dissolution  had  been  nearly  arranged, 
when  the  defendant  represented  that, 
before  finally  acceding  to  thein,  he  thought 
it  proper  to  go  to  London,  for  the  pur- 
pose of  consulting  a  friend  residing  there. 
In  the  course  of  his  journey,  he  went 
round  to  several  customers  of  the  firm,  in 
different  parts  of  the  country,  and  collected 
of  them  debts  due  to  the  partnership  to 
the  amount  of  about  2,318?.  In  one  in- 
stance, a  debt  due  by  himself  had  been  set 
off  against  a  debt  due  to  the  firm,  and  he 
received  the  difference.  The  bill  was  filed 
for  an  account  of  the  partnership  trans- 
actions. The  defendant,  in  his  answer 
disclosing  these  facts,  .stated  that  he 
believed  the  balance  of  the  account  would 
be  in  his  favor.  Lord  Eldon  :  "  If  a  part- 
ner, as  partner,  receives  money  belonging 
to  the  firm,  and,  admitting  that  he  has 
received  it,  insists  that  there  is  a  balance 
in  his  favor,  there  is  no  pretence  for  mak- 
ing him  pay  it  in.  But  if  he  has  received 
it  under  circumstances  from  which  you 
can  infer  that  he  had  agreed  not  to  receive 
it,  and  that  his  receiving  it  was  contrary 


§  413.] 


OF    AN    ACCOUNT. 


517 


is,  therefore,  applicable  only  to  a  private  and  personal  debt.  It 
would  hardly  be  applied  here,  merely  on  the  authority  of  the 
English  practice  ;  but  it  rests  in  that  country  on  the  general 
principle,  that  he  who  asks  equity  must  be  ready  to  do  equity; 
and  it  may  be  expected  that  a  similar  rule  will  be  provided  for  here, 
by  the  rules  of  practice  of  the  courts  of  equity,  (^y) 


SECTION  III. 


HOW  AN  ACCOUNT  SHOULD  BE  TAKEN. 

§413.  Accounting  by  the  Parties.  —  As  to  the  manner  of  tak- 
ing an  account,  the  first  remark  to  be  made  is,  that  the  parties 
themselves  may  regulate  this,  and  the  court  will  respect  their 
agreement,  (z")  This  may  be  contained  in  the  original  articles, 
or  in  subsequent  agreements.  Or  it  may  be  derived  from  their 
practice.  Where  partners  have,  for  a  considerable  time,  settled 
their  accounts  in  a  certain  way  and  upon  certain  terms,  it  is 
obviously  reasonable  to  infer  that  this  was  their  agreement  and 
understanding.     Equity  will  draw  this  inference,  and  direct  the 


to  good  faith,  then  he  ma}'  be  ordered  to 
bring  it  into  court.  Cases  may  haiijien 
where  10,000/.  may  be  due  to  him,  and 
yet  he  may  have  received  l.OOOZ.  under 
such  circunistances  that  he  will  not  be 
allowed  to  retain  it.  .  .  .  Though  it  is 
very  true  that  a  partner  may  receive  part- 
nership  effects,  and  insist  on  not  paying  in 
the  amount,  unless  all  the  other  partners 
will  pay  in  what  they  have  in  their  hands, 
yet  I  think  the  defendant  has  admitted 
himself  to  have  received  these  sums  in  a 
manner  in  which  he  ought  not  to  have 
received  them.  He  must,  therefore,  pay 
them  in."     See  Richardson  v.  The  Bank 


(y)  Under  section  244  of  the  New  York 
Code  of  Procedure,  as  amended  in  July, 
1851,  a  [lartner,  who  by  his  answer  admits 
that  he  has  in  his  hands  partnership  funds, 
which  on  his  statement  ajjpear  to  belong 
to  the  administrators  of  his  deceased  part- 
ner, will  be  ordered  to  pay  over  such  funds 
to  them,  although  there  are  outstanding 
contested  claims  against  the  firm,  and  it 
has  claims  to  enforce  which  will  require 
time  and  disbursements.  The  order  for 
such  payment  will,  however,  require  the 
administrators  to  give  security  to  the  sur- 
viving jiartner  to  contribute  to  the  out- 
standing claims,  if  established,  and  to  pay 


of  England,  4  Mylne  &  C.  165,  in  which  their  sliare  of  the  expenses  that  may  be 

the  question  is  fully  considered.     See  also  incurred  in  prosecuting   the  demands   of 

Mills  V.  Hanson,  8  Ves.  68,  91 ;  Domville  the  firm.     The  surviving  partner  will  also 

V.   Solly,  2  Russ.    372  ;  Toulmin  v.   Cop-  be  permitted  to  retain  sufficient  to  cover 

land,  3  Y.  &  C.  643.     In  Jervis  v.  White,  such  claims  against  the  deceased  partner 


6  Ves.  738,  the  defendant  was  ordered  to 
pay  money  into  court  befoi'e  answer  in  a 
case  of  gross  fraud,  appearing  irpon  affi- 
davit by  the  plaintiff,  and  by  a  correspond- 
ing affidavit  by  the  defendant.  Daniel's 
Ch.  Pr.  (Perkins*  ed.)  2024;  Vann  v. 
Barnett,  2  Bro.  C.  C.  158  ;  Costeker  v. 
Horrox,  3  Y.  &  C.   530. 


as  are  contested  in  the  suit  in  which  the 
order  is  made.  Roberts  i;.  Law,  4  Sandf. 
642.  If  a  defendant  by  his  answer  acknowl- 
edges any  particular  sum  due,  though  he 
swears  those  sums  were  discharged,  yet  it 
is  still  a  ground  for  directing  an  account  '■ 
Brace  V.  Taylor,  2  Atk.  253. 
(z)  See  ante,  §  208. 


518 


THE    LAW    OF    PARTNERSHIP. 


[CH.  XVI. 


account  to  be  taken  in  a  similar  manner,  (a)  Indeed,  this  evi- 
dence from  custom,  or  from  conduct  and  acquiescence,  is  even 
stronger  than  that  of  expressed  agreement.  For  if  there  be  cer- 
tain terms  agreed  upon,  and  the  accounts  have  been  kept  in 
disregard  of  them  for  a  considerable  time,  and  without  objection, 
we  have  seen  that  the  court  will  treat  it  as  a  waiver  of  the  terms 
by  the  party  whom  they  bcneiit,  or  as  a  subsequent  agreement 
cancelling  them,  {b)  And  the  accounts  need  not  be  signed  by 
the  parties,  if  there  be  other  evidence  of  acquie'scence.  The  pos- 
session of  the  account  and  vouchers  for  a  long  time,  without 
objection,  will  be  deemed  evidence  of  acquiescence ;  not  only 
from  its  intrinsic  probability,  but  because  the  other  parties  have 
a  right  to  know  and  meet,  at  an  early  period,  any  ol>jections 
which  exist,  or  else  to  go  on  upon  the  assumption  that  none 
exist,  (c)     Hence  in  a  leading  American  case,  it  was  held  that  a 


(a)  Jackson  v.  Sedj^wick,  1  Swanst. 
460,  469,  per  Lord  Eldon  :  "Partnership 
accounts  may  be  taken  in  various  ways. 
The  distinction  is,  that,  in  the  absence  of 
a  sj'ecial  agieenient,  the  accounts  nmst  be 
taken  in  tlie  usual  way;  but  where  a  sjiecial 
agreement  has  been  made,  it  must  be  abided 
by,  provided  that  the  parties  have  acted  on 
it  ;  if  not,  I  always  understood  that  the 
articles  are  read  in  this  court  as  not  con- 
taining the  clauses  on  which  the  parties 
have  not  acted." 

(b)  Geddes  V.  Wallace,  2  Bligh,  270  ; 
Petty  i'.  Janeson,  6  Madd.  146  ;  Const  v. 
Harris,  Turn.  &  Russ.  496,  523  ;  Jackson 
V.  Sedgwick,  1  Swanst.  460,  469. 

(c)  Willis  i;.  Jernegan,  2  Atk.  25L  The 
plaintiffs  counsel  objected  to  the  defend- 
ant's plea  of  a  slated  account,  on  the  ground 
that  it  was  not  signed  by  the  parties.  Lord 
Hardwicke  :  "  There  is  no  absolute  ne- 
cessity that  it  should  be  signed  by  the 
parties  who  have  mutual  dealings,  to  make 
it  a  stated  account ;  for  even  where  there 
are  transactions  supposed  between  a  mer- 
chant in  England  and  a  merchant  beyond 
sea,  and  an  account  is  transmitted  here 
from  the  person  who  is  abroad,  it  is  not 
the  signing  which  will  make  it  a  stated 
account,  but  the  person  to  whom  it  is  sent, 
keeping  it  by  him  any  length  of  time, 
without  making  any  objection  which  shall 

ibind  him,  and  prevent  his  entering  into 
an  open  account  afterwards."  Id.  252. 
Tickel  V.  Short,  2  Ves.  Sen.  239  ;    Morris 


V.  Harrison,  Colles  P.  C.  157  ;  1  Story, 
Eq.  Jur.  §  526  ;  2  Dan.  Ch.  Pr.  762  ; 
Jessup  V.  Cook,  1  Halst.  (5  N.  J.  L.)  436; 
Lamalere  v.  Gaze,  1  Wash.  C.  C.  436,  2 
P.  A.  Browne,  128  ;  Murray  v.  Toland,  3 
Johns.  Ch.  569;  Wilde  r.  Jenkins,  4  Paige, 
481 ;  Freeland  v.  Heron,  7  Cranch,  147  ; 
Codman  v.  Rodgers,  10  Pick.  112.  But 
in  Claucarty  v.  Latouche,  1  Ball  &  B.  428, 
it  was  held,  by  Lord  Chancellor  Manner-s, 
that  acquiescence  alone,  in  accounts  fur- 
nished, does  not  fimount  to  a  settlement, 
although  it  must  have  considerable  effect. 
This,  however,  was  in  reference  to  an  ac- 
count which  was  usurious  ;  and  which, 
even  if  expressly  concurred  in,  would  have 
been  set  aside.  Where  an  account  relied 
on  as  a  stated  account  has  not  been  signed, 
it  is  not  enough  to  prove  the  delivery  of 
it.  The  accjuiescence  of  the  other  party 
in  it  must  also  be  proved.  Irving  v.  Young, 

1  L.  J.  Ch.  108.  In  the  Attorney-General 
V.  Brooksbank,  2  Y.  &  J.  42,  the  chief 
baron  of  the  exchequer  expressed  an  opinion 
that  an  account  stated  must  be  actually 
signed  by  the  parties,  to  enable  the  defend- 
ant to  plead  it  in  bar  to  a  suit  for  an  ac- 
count ;  although  he  seemed  to  sup])Ose  an 
account  not  signed  might  be  a  good  defence, 
if  set  up  in  the  answer  and  proved  at  the 
hearing.  Commenting  on  this.  Chancellor 
Walworth  says :  "That  opinion  is  clearly 
not  law  ;  and  it  is  directly  opposed  to  that 
of  Lord  Hardwicke,  in  Willis  v.  Jernegan, 

2  Atk.    252,  where   he    says,    in    express 


§  -il^] 


OF    AN    ACCOUNT. 


il9 


partner  would  be  deemed  to  acquiesce  in  any  statement  of  account 
to  which  he  did  not  object  within  a  reasonable  time.(t?) 

But  the  terms  of  an  account,  whether  proved  expressly  or  by 
implication,  are  not  conclusive.  Even  if  the  articles,  or  subse- 
quent agreements,  or  practice  with  acquiescence,  or  all  together, 
would  lead  to  the  conclusion  that  certain  terms  had  been  agreed 
upon,  still,  if  fraud,  opprcssiou,  or  uncom[)ensated  and  extreme 
injury,  can  be  shown,  the  court  will  direct  the  account  to  be  stated 
upon  ])remises  more  consistent  with  justice,  (t;)  It  may  be  said, 
in  general,  that  whenever  on  a  diss(jlution  questions  arise  among 
the  partners  as  to  the  division  of  the  property  or  profits,  these 
questions  fall  within  the  jurisdiction  and  practice  of  equity,  (ee)- 

§  -414.  Accounting  before  a  Master.  —  If  a  decree  for  an  account 
issues,  and  the  case  is  referred  to  a  master  to  take  an  account, 
his  method  of  proceeding  will  be  governed  very  much  by  the  rules 
and  custom  of  his  own  court.  In  general,  the  parties  must  pro- 
duce before  him  all  books,  vouchers,  and  evidence,  bearing  upon 
the  general  account  or  any  special  items ;  ^  and  he  may  examine 


ttTins,  that  it  is  not  necessary  that  the  ac- 
count should  be  signed  by  the  parties." 
Ileal tt  ('.  Corning,  3  Paige,  5t56. 

{d)  Heartt  i-.  Corning,  3  Paige,  .566. 
And  see  1  Stor}',  Eij.  Jur.  §  526  ;  Com. 
Dig.  Ch.  2  A.  3  ;  Lamalere  v.  Caze,  1 
Wash.  C.  C.  436  ;  Killani  v.  Preston,  4  W. 
&  S.  14.  In  Lamalere  v.  Caze,  the  court 
says  :  "To  constitute  a  settled  account, 
all  the  parties  must  consent  to  it  ;  all  must 
be  bound  by  it,  or  none  are.  This  consent 
must  be  either  expressed  or  implied.  I  am 
inclined  to  think,  that  if,  after  dissolution, 
one  partner  were  to  state  the  account,  and 
send  it  to  the  other,  who  should  by  his 
conduct  show  his  acquiescence,  by  retain- 
ing it  for  a  considerable  time,  without 
objections,  that  he  might  be  bound  by  that 
statement,  as  well  as  the  other,  and  that 
this  action  for  the  balance  might  then  be 
maintained."  But  in  Killam  v.  Preston, 
Kennedy,  J.,  delivering  the  opinion  of  the 
court,  and  deciding  that  a  partnership  ac- 
count stated  by  one  partner  after  the  dis- 
solution, and  presented  to  the  other,  who 
retains  it  in  his  possession  for  more  than  a 
year  without  objecting  to  it,  is  not  sufficient 
evidence,   upon  which  a  recovery  of  the 


bahince  appearing  to  be  due  upon  it  may 
be  had,  said  :  "It  would  seem,  from  the 
weight  of  authority,  that  there  must  not 
only  be  a  final  settlement  and  balance 
struck,  but  an  express  promise  to  pay, 
otherwise  the  action  cannot  be  maintained. 
Foster  V.  Allanson,  2  T.  R.  479  ;  Fromont 
V.  Coupland,  2  Ring.  170.  The  only  au- 
thority to  the  contrary  that  I  am  aware  of 
is  a  niii  prius  decision  of  Gibbs,  C.  J. ,  in 
Rackstraw  v.  Imber,  Holt,  N.  P.  Cas.  368, 
where  he  says  he  considers  an  imj)lied  un- 
dertaking sufficient."  And  see  Irving  v. 
Young,  1  Sim.  &  St.  333.  And  see  further, 
on  this  question,  Attwater  v.  Fowler,  1 
Edw.  417  ;  Story  Eq.  PL  §  801  ;  Cooper 
Eq.  PI.  278,  279  ;  Moravia  v.  Levy,  2  T. 
R.  483,  note ;  Casey  v.  Brush,  2  Caines, 
296  ;  Ozeas  v.  Johnson,  1  Binn.  191,  and 
cases  in  previous  note. 

{c)  Oldaker  y.  Lavender,  7  Sim.  239; 
Story  on  Part.  §  206;  Collyer  on  Part. 
(Perkins'  ed.)  b.  2,  ch.  2,  §  225. 

{ee)  See,  for  cases  in  which  the  English 
court  of  chancery  took  jurisdiction  of  such 
questions.  Wood  v.  Scoles,  L.  R.  1  Ch. 
369;  Ibbotsam  v.  Elam,  L.  R.  1  Eq.  183  ; 
Homfray  v.  Fothergill,  L.  R.  1  £([.  567. 


1  Partnership  books  are  of  course  receivable  in  evidence  in  taking  an  account,  though 
either  partner  has  a  right  to  show  their  incorrectness.  Carpenters.  Camp,  39  La.  Ann. 
1024,  3  So.  269 ;  TopUff  v.  Jackson,  12  Gray,  565  ;  Boire    .  McGinn,  8  Ore.  466. 


520 


THE    LAW   OF   PARTNERSHIP. 


[CH. 


XVI. 


not  only  witnesses,  but  all  the  parties,  and  should  examine  any 
party  at  the  suggestion  or  desire  of  any  opposite  party,  unless 
this  be  obviously  and  certainly  unreasonable.  (/) 

Generally,  the  master  should  begin  from  the  last  account  which 
was  closed  and  settled,  taking  the  balance  thereof  as  his  basis ; 
unless,  by  order  of  court,  or  for  reasons  shown,  he  goes  behind 
this  account.     If  there  be  no  settled  account,  he  must  supply  the 


(/)  Ferry  v.  Henry,  4  Pick.  75;  Glyn 
V.  Caulfield,  15  Jur.  807  ;  Toulniin  v.  Cop- 
land, 3  Y.  &  C.  655;  Beckford  i;.  Wikhuan, 
16  Yes.  438.  In  one  case,  where  a  surviv- 
ing partner,  who  had  possession  of  the 
partnership  books,  wilfully  and  fraud- 
ulently refused  to  produce  them,  to  have 
tlie  accounts  taken  under  a  decree  for  that 
])urpose,  the  master,  in  the  absence  of 
other  evidence,  charged  ten  per  cent  per 
annum  on  the  capital  stock,  as  the  net 
gains  made  during  the  partnership,  and 
debited  the  surviving  partner  with  a  moiety 
thereof.  The  court  held  that  the  master 
was  justified  in  so  doing,  and  made  a  decree 
accordingly.  Walnisley  v.  Walnisley,  3 
J.  &  La  T.  556.  And  in  another  case, 
where  the  defendant  denied  charges  in  the 
bill  of  fraud  and  misconduct,  and  explained 
others  away,  alleging  his  inability  to  put 
in  a  full  answer,  by  reason  that  plaintiff 
withheld  improperly  the  partnership  books, 
the  court  refused  (but  without  prejudice  to 
future  application)  the  injunction  prayed 
by  the  bill.  Littlewood  r.  Caldwell,  11 
Price,  97.  In  1811,  A.  &  B.  entered  into 
a  partnership,  which  continued  till  1818, 
when  it  was  dissolved,  and  the  affairs 
wound  up,  except  as  to  some  outstanding 
debts.  In  1820,  a  deed  of  release  was 
executed,  from  which  these  debts  were  ex- 
cluded. Partnership  books  relating  gen- 
erally to  these  and  other  debts  were  all 
along  suffered  to  remain  in  A.'s  hands. 
All  the  outstanding  debts  were  subse- 
quently settled.  In  1830,  B.  was  declared 
bankrupt,  till  which  time  the  books  were 
never  called  for  by  B.  It  was  held,  that 
A.  &  B.,  nevertheless,  continued  tenants 
in  common  in  respect  of  them,  and  that 
the  length  of  time  did  not  affect  tiiat  rela- 
tionship ;  and,  therefore,  although  there 
was  no  charge  of  fraud  in  the  settled  ac- 
count, yet  the  comynissioner  had  jurisdic- 
tion to  call  A.  before  him,  and  examine 


him  and  the  books  relative  to  the  former 
dealings  of  the  bankrupt.  Ex  parte  True- 
man,  1  Deac.  &Ch.  464  ;  Ex  parte  lii'vett, 
1  Glyn  &  .1.  185.  So,  the  solicitor  of  the 
purchaser  of  an  estate  from  a  bankrupt  has 
beeu  ordered  to  attend  (but  without  pre- 
judice to  privilege)  for  the  purpose  of  being 
examined.  Ex  parte  Hodgson,  2  Glyn  & 
J.  21.  But  where  a  partnership  has  ex- 
pired by  efflux  of  time,  and,  in  a  suit  for 
account,  &c.,  a  receiver  has  been  appointed 
before  decree,  the  court  will  not  compel 
defendant  (the  former  managing  partner) 
to  deliver  up  to  receiver,  for  the  ])urpose 
of  making  out  bills  of  costs,  partnership 
books  and  accounts  which  have  remained 
in  his  hands,  and  title-deeds  belonging  to 
a  third  person,  which  came  into  the  pos- 
session of  the  copartners  as  solicitors;  such 
defendant  offering  the  receiver  free  access 
thereto,  and  to  assist  in  making  out  such 
bills.  Dacie  v.  John,  McClel.  206,  13  Price, 
446.  Partnership  accounts  having  been 
directed  to  be  taken  by  the  masters  in  a 
case  in  which  some  of  the  books  have  been 
lost,  the  court  directed  the  master,  if  it 
should  appear  in  taking  the  account  that 
any  necessary  books,  &c.,  should  be  want- 
ing, to  report  the  same  specially,  and 
whether  in  consequence  of  the  want  of  such 
books  he  was  unable  to  proceed  satisfac- 
torily in  taking  the  account.  Millar  v, 
Craig,  6  Beav.  433.  See  further,  in  refer- 
ence to  accounts  in  partnership  books, 
Heartt  v.  Corning,  3  Paige,  566  ;  (Jaldwell 
V.  Leiber,  7  Paige,  483  ;  Simms  v.  Kirtley, 

1  T.  B.  Monroe,  80 ;  Stoughton  v.  Lynch, 

2  Johns.  Oh.  217,  218  ;  Allen  v.  Coit,  6 
Hill,  318 ;  Withers  v.  Withers,  8  Peters, 
359  ;  United  States  Bank  v.  Binnev,  5 
Mason,  188  ;  Phillips  v.  Turner,  2  Dev.  & 
B.  Eq.  123  ;  Fletcher  v.  Pollard,  2  Hen. 
&  Munf.  544 ;  Brickhouse  v.  Hunter,  4 
Hen.  &  JIunf.  363  ;  Kyle  v.  Kyle,  1  Gratt 
526  ;  Hallett  v.  Hallett,  2  Paige,  432. 


§  ^1^.] 


OF    AN    ACCOUNT. 


521 


want  of  one,  bj  beginning  with  the  partnership,  and  stating  the 
account  according  to  ordinary  rules  and  usage,  unless  they  are 
controlled  by  some  agreement  of  the  parties,  or  some  peculiar 
circumstances,  which  he  will  be  careful  to  report,  {g)  And  he 
must  continue  the  account  to  the  day  on  which  he  makes  it, 
unless  there  has  been  a  previous  dissolution.^  In  that  case,  he 
will  continue  it  to  the  dissolution,  and  either  stop  there,  or  from 
that  day  begin  a  new  account ;  for  the  dissolution  has  terminated 
the  partnership,  and  the  account  thereafter  is  not  an  account 
between  partners.  (/<)     And   if  there  be  outstanding  items  to  be 


(fj)  Beak  v.  Beak,  Cas.  temp.  Finch, 
190.  In  this  very  early  case  on  the  ques- 
tion, a  bill  was  brought  to  have  an  account 
of  the  estate  of  Elias  Beak,  deceasetl,  and 
of  a  stock  of  money  by  him  brou<(ht  into 
trade  with  the  defendant,  Arnold  Beak, 
his  brother,  in  the  year  1648.  The  bill 
set  forth  that  in  April,  1662,  a  balance 
was  made  ;  that  from  the  year  1648  a  joint 
trade  was  carried  on  Ijetween  the  brothers, 
till  February,  1673  ;  that  several  balances 
were  made  in  loose  papers,  and  "a  partic- 
ular balance  in  February,  1673,"  when  all 
the  particulars  were  agreed  between  them, 
excepting  only  an  error  of  a  small  amount. 
It  appears,  however,  from  the  further  re- 
port of  the  case,  that  Elias  made  his  will 
in  March,  1667,  and  soon  after  died.  It 
was  admitted  on  all  sides,  that  an  account 
ought  to  be  had  of  the  estate  in  partner- 
ship ;  but  the  question  was  about  the  time 
it  .should  begin,  and  how  long  it  should 
contintie.  The  counsel  for  the  plaintiffs 
insisted  on  an  account  stateil  in  the  vear 
1662,  and  that  it  ought  to  proceed  from 
that  time  without  any  retrospect  ;  and 
that  the  stock  of  Elias  might  not  be  car- 
ried on  in  a  pretended  partnership  after 
his  death,  but  that  it  might  be  accounted 
us  his  separate  estate  from  that  time.  The 
counsel  for  the  defendant  argued  that  the 
account  of  the  joint  trade  ought  to  be  car- 
ried on  till  all  the  accounts  relating  to  the 
partnership  could  be  settled  and  made 
even.     The  court  decreed  an  account,  and 


that  if  the  master  should  find  a  balance 
conceining  the  joint  trade,  either  in  1662i 
or  in  1673,  or  at  any  other  time,  then  he 
was  to  take  it  from  such  time  ;  otherwise, 
it  must  take  its  rise  from  the  year  1648, 
when  the  ])artnership  first  began,  and  must 
be  carried  on  to  the  death  of  Elias,  but 
not  afterwards.  For  the  plaintiff  ought 
not  to  be  concluded  by  any  new  or  grow- 
ing account  in  trade,  but  only  is  to  have 
an  account  of  what  was  then  in  partner- 
ship, and  the  proceeds  thereof  till  got  in. 
(A)  Booth  V.  Parks,  1  Molloy,  465,  per 
Sir  A.  Hart,  Lord  Chancellor:  "There 
can  be  no  paitneiship  without  existing 
partners.  It  is  not  correct  to  say,  that 
the  survivor,  carrying  on  the  business  for 
the  purpose  of  winding  it  up,  carries  on  a 
partnership-trade  :  he  only  deals  with  the 
effects  finally  ex  necessitate,  and  rather  in 
the  character  of  a  trustee.  If  he  con- 
tinues it  as  a  trade,  it  is  at  his  own  lisk, 
liable  to  tl.e  option  of  accounting  for  pro- 
fits, or  being  charged  with  interest  upon 
the  deceased  partner's  share  of  the  surjilus, 
as  taken  at  his  death."  In  Dyer  v.  Clark, 
5  Met.  575,  Shaw,  C.  J.,  says  :  "The  time 
of  the  dissolution  fixes  the  time  at  which 
the  account  is  to  be  taken,  in  order  to  as- 
certain the  relative  lights  of  the  partners, 
and  their  respective  shares  in  the  joint 
fund.  The  debts  may  be  numerous,  and 
the  funds  widely  dispersed  and  difficult  of 
collection  ;  and,  therefore,  much  time  may 
elapse  before  the  affairs  can  be  wound  up, 


1  Roberts  v.  Eldred,  73  Cal.  394,  15  Pac.  16.  Where  an  account  was  taken  on  a 
bill  filed  by  the  mortgagee  of  a  partner,  and  it  appeared  there  had  been  a  dissolution, 
the  account  was  ordered  to  be  taken  at  the  date  of  dissolution  ;  otherwise,  the  court 
said,  it  should  have  been  taken  at  the  date  of  the  bill.  Whetham  v.  Davey,  30  Ch. 
D.  574. 


522  THE    LAW    OF    PARTNERSHIP.  [CH.  XVI. 

settled  afterwards,  when  they  are  settled  they  must  be  referred 
back  to  that  period,  (i)  The  same  principles  of  appropriation  of 
])ayment  which  have  already  been  spoken  of  will  be  applied  to 
the  account ;  the  most  general  one  being  that  the  earliest  payment 
shall  be  applied  to  the  earliest  debt,  and  the  first  sum  paid  in 
by  a  customer  who  deposits  and  draws  is  the  first  sum  drawn 
out.  (j ) 

§  415.  Terms  of  Account  —  In  regard  to  the  terms  of  the 
account  and  settlement,  and  the  charges,  credits,  or  allowances  to 
be  made,  it  has  been  conceded,  by  the  highest  authority,  that 
specific  rules  are  of  little  use,  because  the  justice  of  every  case 
requires  that  its  peculiar  facts  and  merits,  the  nature  of  the  trade, 
the  conduct  of  the  parties,  and  all  the  various  circumstances 
which  affect  the  rights  of  the  parties,  must  be  taken  into  consid- 
eration in  determining  what  they  are  or  should  be.^     In  our  note 

the  debts  paid,  and  the  surpUis  put  in  a  to   apply   as   well   between   the    partners 

condition    to   be   divided.     But  whatever  themselves  as  between   the   partners   and 

time  ma}' elapse  before  tlie  final  settlement  third  persons;  and  there  njust  be  strong 

can  be  practically  made,  that  settlement,  evidence  to  rebut  the  presumption  as  to 

wlien  ma<le,  must  relate  back  to  the  time  that  mode  of  taking  the  partneisliip  ac- 

when  tlie  partnership  was  dissolved,  to  de-  counts.     Therefore,  where  A.  and  B.  wei'e 

termine  the  relative  interests  of  the  part-  partners  as  navy  agents,  and  A.  becoming 

ncrs  in  the  funds."  a  lunatic,  that  partnership  was  dissolved, 

(/)  Stoughton  V.  Lynch,  2  Johns.  Ch.  and  the  business  was  carried  on  upon  the 

209  ;    Dyer  v.  Clark,  5   Met.  575.      And  same  terms  by  B.   and  C,  and  B.  died, 

see  Tyng  v.  Thayer,  8  Allen,  391  ;  Brinley  and   the   accounts   of    both    partnerships 

V.  Kupfer,  6  Pick.  179  ;  Williams  i\  Hen-  were  unsettled,  it  was  held  that  the  ac- 

shaw,  11  Pick.  79,  12  Pick.  378  ;    Dickin-  counts  of  A.  and  B.  must  be  taken  on  the 

son  V.  C4rangei-,  18  Pick.  315,  317.  foundation  of  the  rule  in  Clayton's  Case, 

{./)  Clayton's  Case,  in  Devaynes  v.  although  C,  in  order  to  establish  an  agree- 
Koble,  1  Meriv.  572  ;  Bodenham  v.  Pur-  ment  to  the  contrary,  set  up  ceitain  affi- 
chas,  2  B.  &  Aid.  39  ;  Pemberton  v.  davits  made  by  B.,  in  a  suit  bVought 
Oakes,  4  Russ.  154  ;  Toulmin  v.  Copland,  against  him  by  the  committee  of  the  lun- 
3  Y.  &  C.  625.  In  this  last  case,  it  was  atie,  in  which  he  alluded  to  an  under- 
decided  that  where  persons  carry  on  busi-  standing  between  B.  &  C.  (which,  in  some 
ness  in  the  nature  of  a  banking  business,  instances,  had  been  acted  upon),  that  the 
—  as,  for  instance,  that  of  navy  agents, —  advances  made  to  the  customers  of  their 
and  a  change  takes  i)lace  in  the  house  by  firm  should  be  repaid  before  any  portion 
tlie  death  or  retirement  of  a  partner,  on  of  the  moneys  paid  in  by  tiiose  customers 
taking  the  partnership  accounts,  the  rule  was  applied  in  liquidation  of  their  debts 
in  Clayton's  Case  will  be  held  2^1'ima  facie  due  to  the  original  firm. 

1  Reasonable  expenses  of  closing  up  the  business  are  proper  items  in  the  account, 
and  are  chargeable  against  the  firm,  in  favor  of  a  surviving  or  liquidating  ])artner. 
Burke  v.  Fuller,  41  La.  Ann.  740,  6  So.  557  ;  Tompkins  v.  Tompkins,  18  S.  C.  1. 
Such  expenses  are  the  cost  of  taking  care  of  the  partnership  property  and  keeping  the 
books,  Holloway  w.  Turner,  61  Md.  217  ;  or  fulfilling  contracts  which  bound  the  firm. 
Tomjikins  v.  Tompkins,  18  S.  C.  1.  And  of  reasonably  litigating  suits  brought  on 
claims  against  the  partnership.  Brownell  v.  Steere,  128  ill.  209,  21  N.  E.  3  ;  Lee  v. 
Dolan,  39  N.  J.  Eq.  193  ;    Leiserman  v.  Bernheimer,  113  N.  Y.  39,  20  N.  E.  869. 


§  415.] 


OP   AN    ACCOUNT. 


523 


will  \)ii  found  many  cases  in  which  special  circumstances  were  con- 
sidered by  English  and  American  courts,  (k)     One  rule,  already 


(k)  Willett  V.  Blanford,  1  Hare,  253, 
269,  per  Sir  James  Wigram,  V.  C:  "I 
have  again  consiJeied  the  sulijeut,  and 
read  the  cases  to  which  I  was  referreci  ; 
and  I  remain  of  tlie  opinion  I  expressed 
at  the  close  of  tlie  aigunient,  that  there  is 
no  rule  of  this  court  applicable  alike  to 
all  cases  ;  and  that  there  is  no  rule  which  is 
.so  estahlished  or  general  in  its  apjilication, 
that  it  is  to  be  taken  to  be  the  general  rule, 
until  circumstances  are  shown  which  dis- 
place it.  The  fai!ts  of  each  case  must  be 
fully  brought  under  the  view  of  the  court, 
before  it  can  be  in  a  position  to  state  what 
justice  to  the  party  seeking  its  protection 
may  require,  with  due  regard  to  the  in- 
terest of  other  parties.  No  one  can  attend 
to  the  elaborate  judgments  of  Lord  Eldon 
in  Crawshay  v.  Collins,  Brown  v.  De 
Tastet,  and  even  in  Cook  v.  Collingridge, 
without  being  satisfied  that  his  mind  saw 
the  ini[)ossil)ility  of  subjecting  cases  so 
various  as  those  of  trading  partnerships  to 
any  universal  rule.  Tiie  decrees  in  these 
cases,  that  of  Sir  William  Grant  in 
Featherstonhaugh  v.  Fen  wick,  and  the 
judgment  and  decree  of  Lord  Cottenham 
in  Wedderburn  v.  Wedderburn,  confirming 
Lord  Landgdale's  decree  in  the  same  case, 
all  concur  to  establish  the  soundness  of 
Lord  Eldon's  opinions  ;  anil  I  think  it  is 
impossible  to  consider  the  subject,  abstract- 
edly from  authority,  without  feeling  satis- 
fied that  justice  would  be  endangered  by 
an  attempt  to  subject  all  cases  of  this  de- 
scription to  any  uniform  rule."  Where 
one  firm  enters  into  copartnership  with  a 
third  person  as  a  distinct  firm,  the}'  are 
all  in  the  new  firm  as  individuals,  and  the 
profits  must  be  divided  equally  amongst 
all.  Warren  v.  Smith,  9  Jur.  N.  s.  168. 
If  no  valuation  of  the  services  of  the  re- 
.spective  partners  is  agreed  upon,  none  can 
be  made  in  settling  the  account,  however 


much  they  may  differ  in  value.  Kaiser  v. 
Wilhelm,  2  Mo.  App.  596.  A.,  the  part- 
ner of  B.,  having  charge  of  the  firm  busi- ' 
ness  at  a  certain  place,  employs  a  firm,  of 
which  he  is  also  a  member,  to  conduct  it 
on  commission.  Accounts  are  rendered  to 
B.,  who  makes  no  objection.  A.  also  sells 
goods  of  one  firm  to  the  other  firm,  with 
notice   to   B.,  and  at   full  market  value. 

B.  cannot,  after  ilissolutiou  and  settle- 
ment, demand  an  account  of  A.'s  share  of 
the  commission  ;  nor  is  A.  to  account  for 
profits  received  by  him  as  partner  in  the 
purchasing  firm,  although  said  firm  takes 
the  goods  to  fill  contracts  for  delivery  at  a 
larger  j>rice  than  they  l>ay  for  it.  Fuch  v. 
P>lakiston,  (Pa.),  IS^Alb.  L.  J.  288.  An 
attorney  at  law,  who  is  a  partner  in  a 
commercial  firm,  cannot  charge  against 
his  firm  commissions  for  collecting  ac- 
counts due  it.  Vandiizer  v.  McMillan,  37 
Ga.  299.  In  making  up  accounts  between 
partners,  ]iresumptions  are  against  those 
wiio  by  fraud  or  negligence  emljarrass  the 
settlement ;  and  it  will  be  the  duty  of  the 
master,  in  such  case,  to  protect  the  firm. 
Harvey  v.  Varney,  104  Mass.  436.  Where 
partners  are  to  share  equally,  and  on  dis- 
solution, after  a  losing  business,  one  is 
found  to  have  contributed  more  than  the 
other  to  the  capital,  the  loss  must  be 
shared  equally,  notwithstanding  the  in- 
equality of  contribution.  Nowell  v.  No- 
well.  L.  R.  7  Eq.  538.     Articles  between 

C,  W.,  B.,  &  S.  provided  that  C.  and  AV. 
should  contribute  the  whole  capital  in  un- 
e(pial  proportions  ;  that  C.  should  contrib- 
ute "such  terms  as  he  may  be  able  to 
give;"  that  W.,  B.,  &  S.  should  each 
contribute  all  their  time  to  the  business  ; 
that  each  partner  should  receive  one- fourth 
of  the  net  profits  ;  and  that  C.  and  W. 
should  receive  interest  on  the  capital  con- 
tributed by  them.     The  business  resulted 


The  expense  of  taking  the  account  and  the  costs  of  tlie  bill  for  account  should  also  be 
jiaid  out  of  the  assets.  In  re  Beck's  Estate,  19  Ore.  503,  24  Pac.  1038  ;  Moore's 
Appeal,  (Pa.)  19  Atl.  753.  But  an  expense  due  entirely  to  the  fault  of  the  settling  or 
managing  partner,  as  where  he  committed  a  tort  in  the  course  of  the  business  and  was 
obliged  to  i)ay  compensation  for  it,  cannot  be  included  in  the  account.  Thomas  v 
Atherton,  10  Ch.  D.  185  (C.  A.). 


624 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XVI. 


stated,  is  of  so  much  practical  importance,  that  we  repeat  it 
licre  ;  it  is,  that  a  partner  settling  the  business,  as  a  surviving 
or  remaining  partner,  is  looked  ujwn  as  a  trustee,  and  the  rules 
of  equity  devised  to  secure  the  faithful  discharge  of  a  trust  are  all 
of  them  a{)plicable  to  him.  (l)  ^    In  a  case  m  Louisiana,  it  is  said 


in  loss,  and  the  firm  was  dissolved.  It 
was  held,  that  the  capital  constituted  a 
debt  of  the  firm,  to  which  all  the  partners 
were  obliged  to  contribute  eiiually  ;  and 
that,  one  of  them  being  insolvent,  the  loss 
was  to  be  borne  equally  by  the  other  three. 
Whitcomb  v.  Converse,  119  Mass.  38. 
A.,  the  owner  of  an  established  business, 
agrees  with  B.  that  the  latter  shall  receive 
a  certain  percentage  of  the  profits,  annu- 
ally, up  to  $5,000.  In  accounting,  A. 
cannot  charge  profit  and  loss,  with  interest 
on  capital,  or  on  old  business  debts,  or 
with  B.'s  salary.  But  he  may  charge  de- 
preciation of  plant ;  and,  if  the  business 
is  sold  at  an  advance  above  the  estimated 
value  at  the  time  of  the  agreement,  B.  has 
no  right  to  a  percentage  on  the  difl'erence. 
Rishton  v.  Grissell,  L.  R.  5  Eq.  326. 
Where  A.  and  B.  enter  into  a  copaitner- 
ship  for  tlie  purpose  of  a  commission  and 
warehouse  business,  A.  to  furnish  the 
buildings  and  fixtures,  and  B.  to  keep  the 
books  and  to  give  his  time  and  talents  to 
the  business,  B.  may,  on  his  own  account, 
procure  other  houses  for  storage,  if  A.  re- 
fuses, and  the  firm  business  is  not  neg- 
lected. And,  if  in  such  case  the  managing 
partner  dies,  his  estate  will  be  entitled  to 
share  in  the  profits  upon  storage  earned  in 
his  lifetime,  but  not  collected  till  after  his 
death,  deducting  the  actual  expenses  ac- 
cruing after  the  decease.  And,  if  the 
proceeds  of  sales  are  not  called  for  for 
twelve  years,  the  estate  of  the  deceased 
partner  will  be  entitled  to  a  decree  for  his 


proportion  thereof.  Parnell  v.  Robinson, 
53  Ga.  26.  When,  after  a  ilissolution,  the 
continuing  partner  carries  on  the  business 
with  the  pai'tnership  stock  pending  settle- 
ment, he  will  not  be  required  to  account 
for  profits  made  subsequent  to  dissolution, 
if  at  that  time  the  retiring  partner  had  no 
interest  in,  but  was  in  debt  to,  the  firm. 
Taylor  v.  Hutchinson,  25  Gratt.  536.  On 
a  bill  against  surviving  partners  for  an 
account,  they  should  be  charged  with  the 
value  of  the  assets  as  likely  to  be  realized 
on  reasonable  diligence  in  the  disposition 
thereof,  and  not  with  their  value  as  of  the 
date  of  the  decease.  Moore  v.  Hunting- 
ton, 17  Wall.  417.  The  surviving  part- 
ner may  be  allowed  for  expenditure  not 
stiictly  on  partnership  account,  if  made 
in  accordance  with  the  previous  practice  of 
the  firui,  and  the  business  has  been  con- 
tinued at  request  of  the  deceased  partner. 
Tillotson  V.  Tillotson,  34  Conn.  355. 

(0  Cook  V.  Collingridge,  Jac.  607,  622, 
2  Fonb.  Eq.  186  ;  Simpson  v.  Feltz,  1 
McCord  Ch.  213,  220  ;  Honore  v.  Colmes- 
nil,  7  Dana,  201  ;  Beacham  v.  Eckford's 
Exec,  2  Sandf.  Ch.  116;  W'est  v.  Skip, 
2  Ves.  Sen.  242.  Where,  after  dissolution 
by  death,  cotton  held  on  commission  was 
sold  by  the  surviving  partner,  and  the 
proceeds  were  not  claimed  within  twelve 
years,  it  was  held  that  the  estate  of  the 
deceased  partner  was  entitled  to  its  pro- 
portion of  such  unclaimed  proceeds.  Par- 
nell V.  Robinson,  53  Ga.  2.  See  also 
Keyes's  Appeal,  65  Pa.  196. 


1  Where  a  bill  for  an  account  is  brought  by  a  partner  who  has  been  wrongfully 
excluded  from  the  business,  he  is  ordinarily  granted  a  decree  for  his  share  of  the  profits; 
and  if  two  or  more  partners  combine  to  exclude  him,  he  may  have  a  decree  cliarging 
them  jointly.  Bloomfield  v.  Buchanan,  14  Ore.  181,  12  Pac.  238.  Where  the  share 
of  one  ])artner  in  the  business  is  purchased  by  a  copartner  by  fraud,  he  would  usually 
have  the  option  to  claim  either  profits,  as  if  he  had  be(>n  wrongfully  excluded,  or  his 
damages  with  interest.  In  a  case  where  in  spite  of  the  fraud  he  had  received  the  full 
value  of  his  share,  he  was  held  not  to  be  entitled  to  a  share  of  the  profits,  since  neither 
his  exertions  nor  his  ca]iital  had  helped  in  any  degree  to  earn  them.  W^hite  v.  Reed, 
124  N.  Y.  468,  26  N.  E.  1037. 


§  41G.]  OF   AN    ACCOUNT.  525 

that  the  correct  rule  in  taking  an  aceoiint  between  partners  is  to 
ascertain  what  each  has  contributed,  and  first  to  make  them  equal, 
and  then  devide  the  Ijalance  of  the  proceeds.  (11) 

§  416.  Method  of  stating  Accounts.  —  [The  method  of  stating 
partnershij)  accounts  is  not  to  state  an  account  between  the  part- 
ners directly.  Each  partner  is  primarily  the  debtor  or  creditor 
of  the  firm,  not  of  his  co-partners.  The  account  of  each  partner 
with  the  firm  is  therefore  first  to  be  stated.  This  process  deter- 
mines the  amount  which  each  partner  is  to  pay  or  to  receive. 
Upon  the  basis  of  the  individual  accounts  the  court  may  decree  a 
payment  from  one  partner  to  another  ;  not  because  the  former  is 
indebted  to  the  latter,  but  because  the  former  is  indebted  to  the 
firm,  and  the  firm  to  the  latter.^  This  account  is  of  course  to  be 
taken  after  all  the  debts  of  the  firm  have  been  paid,  since  the 
item  of  profit  or  loss  cannot  be  adjusted  until  that  time.  After 
the  payment  of  all  liabilities  there  can  be  no  distribution  between 
the  partners  till  an  account  is  taken.^  Yet  it  is  not  necessary  to 
wait  till  all  transactions  are  completed  before  filing  a  bill  for  an 
account ;  on  the  contrary,  such  a  bill  is  usually  brought  to  secure 
the  settlement  of  the  partnership  affairs.^ 

Upon  a  final  accounting,  the  advances  of  both  partners  stand 
upon  the  same  footing  as  contributions  of  capital ;  that  is,  both 
enter  into  the  account  between  the  partner  and  the  firm.  If  there 
has  been  a  loss,  so  that  capital  and  advances  cannot  be  repaid  in 
full,  the  loss  is  divided  ;  the  partner  to  whom  least  is  owed  by 
the  firm  paying  over  to  the  partner  who  is  more  in  advance  his 
proper  share  of  the  loss.  Thus  if  one  partner  has  put  in  all  the 
capital,  which  has  been  lost,  and  the  profits  are  equally  divided 
between  the  two  partners,  his  co-partner  must  pay  over  to  him 
half  the  amount  of  the  loss.^] 

(Jl)  Frigerio   v.  Crottes,  20   La.   Ann.  351. 

1  Garrett  u.  EoWnson,  80  Ala.  192.     See  Lindl.  Part.  396,  et  seq. 

2  Gaie  v.  SuUoway,  62  N.  H.  57. 

8  Walsh  v.  MeKeen,  75  C:il.  519,  17  Pac.  673. 

*  See  ante,  §  173  ;  Binney  v.  Mutrie,  12  App.  Cas.  160  ;  Xowell  v.  Nowell,  L.  P.  7 
Eq.  538;  Sangston  v.  Hark,  52  Md.  173  ;  Whitcomb  v.  Converse,  119  Mass.  38.  But  in 
Killefer  v.  McLain,  70  :\Iich.  503,  38  N.  W.  455,  it  was  held  that  after  the  debts  were 
paid  the  individual  creditors  of  one  partner  could  secure  payment  of  all  debts  which 
were  contracted  before  the  beginning  of  the  partnership  out  of  the  capita]  contributed 
by  their  debtor  before  the  copartner  could  come  on  it  for  his  advances  to  the  firm. 

One  partner  has  no  lien  on  the  share  of  the  other  for  a  private  debt  due  from  the 
latter.  Therefore  after  the  partnership  accounts  have  been  stated  and  a  balance  found 
due  to  a  partner,  he  may  claim  his  statutory  exemption  out  of  it  before  his  copartuei 
can  seize  it  for  a  private  debt.     Evans  v.  Bryan,  95  N.  C.  174. 


526  THE   LAW   OF    PARTNERSHIP.  [CH     XVI. 

§  417.  Interest.. —  [When  the  accounts  of  the  partnership  have 
been  settled  and  a  bahince  found  due  to  one  partner,  or  against 
the  other,  interest  is  often  claimed  upon  the  balance  ;  and  the 
courts  are  not  agreed  in  the  view  they  take  of  the  mj'tter.  If  a 
partner  is  indebted  to  the  partnership,  it  is  ordinarily  because  he 
has  overdrawn  his  account ;  if  the  partnership  is  indebted  to  a 
partner,  it  is  usually  because  of  advances  made  by  the  partner. 
But  the  balance  in  favor  of  a  partner  may  consist  entirely  of 
accrued  ))rofits ;  the  balance  against  a  partner  may  result  from  a 
breach  of  his  agreement  to  advance  a  certain  amount  as  capital. 
Whether  or  not  interest  will  be  allowed  should  depend  upon  the 
cause  of  the  balance.  Interest  upon  a  sum  of  money  is  given 
either  because  of  an  express  or  implied  contract  to  pay  it,  or  as 
damages  for  failure  to  pay  over  a  certain  amount  of  money  at  a 
definite  time.^  It  is  evident  that  the  partner's  share  of  undivided 
profits  was  never  payable,  and  therefore  that  no  interest  should 
be  given  by  way  of  damages  for  not  paying  it.  Agreed  capital 
not  paid  in,  however,  should  bear  interest,  since  an  obligation  to 
pay  a  certain  amount  of  money  at  a  certain  time  has  been  broken. 
As  to  advances  and  overdrafts  of  a  partner  the  case  is  more  dif- 
ficult ;  yet  it  seems  impossible  to  distinguish  such  items  from 
the  item  of  undivided  profits.  The  partner  in  advancing  or  with- 
drawing money  is  not  doing  an  isolated  act,  as  to  which  the 
obligations  are  at  once  to  be  settled.  He  is  simply  adding  one 
item  to  a  long  account  between  himself  and  the  firm.  Until  the 
account  comes  to  be  settled,  he  is  not  called  upon  to  repay  what 
he  withdraws,  nor  can  he  complain  if  he  is  not  reimbursed  the 
exact  amount  of  his  advances.  A  simple  running  account  does 
not  bear  interest,  in  the  absence  of  an  agreement  that  it  shall 
do  S0.2  The  better  view,  then,  would  seem  to  be  that  interest 
shall  be  allowed  upon  a  partnership  account,  in  the  ab.sence  of 
agreement,  only  when  a  partner  has  failed  to  pay  in  the  agreed 
amount  of  capital.  The  great  weight  of  authority  is  to  this 
effect.  Thus,  it  is  held  that  no  interest  will  be  allowed  upon  the 
balance  of  a  partnership  account.^     The  case  of  advances  by  a 

1  1  Sedg.  Dam.  (8th  ed.)  §§  282,  301. 

2  1  Sedg.  Dam.  (8th  ed.)  §  310. 

8  See  ante,  §  156  ;  Dexter  v.  Arnold,  3  Mass.  284 ;  Gage  v.  Parmalee,  87  111.  329  ; 
Kemmerer  I'.  Kennnerer,  (la.)  52  N.  W.  194;  Wendling  i;.  Jeniiisch,  (la.)  52  N.  W. 
341  ;  Sweeney  v.  Neeley,  53  Mich.  421,  19  N.  W.  127  ;  Brown's  Appeal.  89  Pa.  139  ; 
MoKay  i'.  Overton,  65  Tex.  82  ;  Oilman  v.  Vanghan,  44  Wis.  646  ;  Carroll  v.  Little, 
73  Wis.  52,  40  N.  W.  582.   Contra,  Masonic  Savings  Bank  v.  Bangs,  (Ky.)  10  S.  W.  633. 

It  has  been  said  in  some  cases  that  the  allowance  of  interest  on  partnership  accounts 
cannot  be  determined  on  any  rule  of  law,  but  depends  solely  upon  the  facts.  Bucking- 
ham V.  Ludlum,  29  N.  J.  Eq.  345  ;  Johnson  v.  Hartshorne,   52  N.  Y.   173  ;    Gyger's 


§  417.]  OF   AN   ACCOUNT.  527 

partner  would  seem  not  to  differ  from  any  other  circumstance  of 
the  account ;  and  it  is  usually  held  that  in  the  absence  of  agree- 
ment a  partner  is  not  entitled  to  interest  on  advances.^  Where 
a  partner  fails  to  pay  in  the  capital  which  he  has  agreed  to  pay, 
he  is  liable  for  interest  on  the  balance.^  And  when  there  is  an 
agreement,  either  express  or  implied,  to  pay  interest,  it  will  of 
course  be  allowed.^  But  the  payment  will  cease  upon  dissolu 
tion,  unless  a  contrary  intention  is  evident,  since  the  firm  then 
ceases  to  earn  profits.* 

A  surviving  or  settling  partner  may,  however,  be  bound  to  pay 
interest  upon  a  balance  left  in  his  hands.  Either  unreasonable 
delay  in  paying  over  a  balance,  or  misconduct  in  the  use  of  the 
assets  will  render  such  a  partner  liable  for  interest.  Thus  where 
he  fails  to  pay  over  a  balance  at  the  proper  time  he  is  liable  for 
interest.^  So  where  he  mingles  the  funds  with  bis  own,  or  other- 
wise uses  them  for  his  own  purjjoses;^  but  if  there  is  no  im- 
proper delay  or  misuse  such  a  partner  is  not  liable  for  interest." 
Where  a  surviving  partner  is  obliged  to  pay  out  money  in  advance 
of  getting  in  the  assets,  he  has  been  held  entitled  to  interest.^ 

Compound  interest  will  not  usually  be  allowed,  without  agree- 
ment;^ but  in  case  of  bad  faith,  as  where  there  has  been  per- 
sistent and  wrongful  failure  to  account,  it  may  be  allowed. ^*^] 

Appeal,  62  Pa.  73.  This  means  no  more  than  that  the  facts  may  show  an  agreement 
to  pay  interest,  or  some  such  fraud  or  misconduct  as  will  give  a  claim  for  interest  in  a 
particular  case. 

1  Prentice  r.  Elliott,  72  Ga.  154;  Leer.  Lashbrooke,  8  Dana,  214;  Clark  r.  Worden, 
10  Neb.  87  ;  Morris  v.  Allen,  14  N.  J.  Ei^.  (1  ML-Carter)  44  (semhlc);  Jones  v.  Jones, 
1  Ired.  E([.  332  ;  Holden  v.  Peace,  4  Ired.  Ei|.  223.  But  see  contra,  Reynolds  t'. 
Mardis,  17  Ala.  32  ;  Ligare  v.  Peacock,  109  111.  94  ;  Baker  o.  Mayo,  129  Mass.  517; 
Berry  v.  Folkes,  60  Miss.  576  ;  Hodges  v.  Parker,  17  Vt.  242. 

2  Krapp  V.  Aderholt,  42  Kas.  247,  21  Pac.  1063. 

3  Montague  v.  Hayes,  10  Gray,  609  ;  Payne  v.  Freer,  91  N.  Y.  43  ;  McKay  v. 
Overton,  65  Tex.  82.  It  was  pointed  out  in  Payne  v.  Freer,  91  N.  Y.  43,  that  though 
called  interest,  the  payment  by  a  partner  of  a  percentage  on  overdrafts  was  not  prop- 
erly so  called,  for  he  could  not  be  said  to  borrow  the  monej'.  It  was  a  mere  method  of 
adjusting  the  profits,  and  was  not  to  be  repaid  to  any  one  unless  upon  final  accounting 
a  balance  was  due  to  the  copartner.  For  this  reason  it  was  decided  that  though  the 
amount  to  be  paid  exceeded  the  legal  rate  of  interest,  the  agreement  for  the  ])ayment 
(or  rather  for  the  charge  in  the  accounts)  of  this  percentage  was  not  usurious.  Ace. 
Campbell  v.  Coquard,  16  Mo.  App.  552  ;  Cunningham  v.  Green,  23  Oh.  St.  296. 

*  Watney  v.  Wells,  L.  R.  2  Ch.  250;  Bradley  v.  Brigham,  137  Mass.  545;  Johnson 
V.  Hartshorne,  52  N.  Y.  173. 

5  Beale  v.  Beale,  (111.)  2  N.  E.  65:  Crabtree  v.  Randall,  133  Mass.  552. 

6  Dunlap  V.  Watson,  124  Mass.  305  ;  Coddington  v.  Idell,  30  N.  J.  Eq.  540. 
T  Brownell  v  Steere,  128  111.  209,  21  N.  E.  3. 

8  Collender  v.  Phelan,  79  N.  Y.  366. 

9  McCall  V.  Moss,  112  111.  493;  Sangston  v.  Hack,  52  Md.  173,  201. 

1°  Heath  v.  Waters,  40  Mich.  457  ,  Pomeroy  v.  Benton,  77  Mo.  64  ;  Johnson  v 
Hartshorne,  52  N.  Y.  173. 


528  THE    LAW    OF    PARTNERSHIP.  [CH.    XVI. 

§  418.  Return  of  Premium. —  [A  premium,  or  as  it  is  some- 
times called  in  this  country  a  bonus,  is  the  consideration  paid 
by  an  incoming  partner  for  admission  into  the  business. 
It  goes,  of  course,  to  the  prior  owner  of  the  business  (whether 
sole  trader  or  partnership)  and  not  into  the  assets  of  the  new 
firm. 

Where  a  premium  has  been  paid  for  admission  into  a  firm,  and 
the  firm  has  afterwards  been  dissolved,  the  English  courts  fre- 
quently award  a  return  of  part  of  the  premium.  The  ground 
for  such  a  decision  is  rather  obscure.  The  premium  was  paid  for 
an  interest  in  the  business ;  and  just  what  was  paid  for  has  been 
obtained.  That  interest  each  partner  continues  to  have  notwith- 
standing the  dissolution.  The  remedy  of  the  partner  would 
seem  not  to  be  an  action  or  bill  for  a  return  of  part  of  the  pre- 
mium, but  a  claim  for  including  in  the  account  the  value  of  the 
good-will.  The  business,  of  which  he  bought  a  share,  was  made 
up  of  two  elements;  the  corporeal  chattels,  and  the  good-will. > 
Since  his  share  of  the  former  must  be  secured  to  him  upon  disso- 
lution, all  that  remains  for  complete  justice  is  to  secure  him  a 
share  of  the  latter,  and  to  this  he  is  entitled.^  If  the  partner 
secures  his  share  of  the  chattels  and  good-will,  and  also  a  return 
of  part  of  the  premium,  he  is  keeping  what  he  bought  and  recover- 
ing what  he  paid  for  it.^ 

The  theory  upon  which  the  English  doctrine  rests  is  probal)ly 
that  the  purchaser  bought  not  only  an  interest  in  the  business, 
but  the  valuable  services  of  the  seller  as  his  partner.  The  objec- 
tion to  this  theory  is,  that  the  purchaser  could  not  have  a  right 
to  the  services  of  his  copartner  unless  he  secured  that  right  by  a 
contract.  If  he  entered  into  a  partnership  without  contracting 
for  the  services  of  the  other  for  a  certain  time  (as,  for  instance, 
into  a  partnership  at  will),  he  has  no  ground  for  complaint  if  the 
other  withdrew  his  services,  as  he  had  a  right  to  do.  If,  on  the 
other  hand,  the  selling  partner  obliged  himself  by  contract  to 
remain  in  the  firm,  and  dissolved  the  partnership  wrongfully,  an 
action  of  contract  would  be  the  proper  action.  If  the  seller  con- 
cealed any  fact  which  rendered  him  incapable  of  doing  what  he 
agreed  to  do  (as  that  he  was  on  the  verge  of  bankruptcy,  or  that 
he  had    a  mortal  disease)   he  procured  the   partnership  fraudu- 

1  This  view  seems  to  have  been  held  by  Sir  Thomas  Plumer,  M,  R.  In  Akhurst  v. 
Jackson,  1  Swanst.  85,  he  refused  to  order  the  return  of  any  part  of  the  premium,  upon 
dissolution  by  the -bankruptcy  of  the  partner  who  had  received  it,  on  the  ground  that 
the  paying  partner  had  obtained  for  the  premium  what  he  paid  it  for :  the  right 
of  becoming  a  partner. 

a  Ante,  §  181. 


§   419.]  OF    AN    ACCOUNT.  529 

kMitly,  and  mialit  be  sued  in  tort.  It  has  however  become 
estiiblished  in  Eng-hvnd  in  the  last  fifty  years  that,  upon  a  prema- 
ture dissolution  of  a  business,  the  court  will  ordinarily  order  a 
i'(>tni'n  of  an  equitable  part  of  the  premium  ;^  the  court  of  equity 
having  full  discretion  both  as  to  awarding  any  return ^  and  as  to 
the  amount.-'^  It  would  clearly  be  unjust  for  the  new  partner  to 
gt^t  both  a  share  of  the  good-will  and  a  return  of  part  of  the  pre- 
mium ;  and  though  it  has  never  been  expressly  decided,  it  seems 
clear  that  a  return  of  premium  can  be  had  only  when  no  disposi- 
tion can  be  made  of  the  good-will.  In  fact,  most  cases  involving 
the  return  of  premiums  are  cases  of  the  taking  into  a  jjrofessional 
business,  as  that  of  a  solicitor  or  a  surgeon,  a  junior  partner, 
and  in  such  cases  not  only  could  no  disposition  be  made  of  the 
good-will  upon  dissolution,  but  the  business  would  naturally  go 
to  the  senior  partner.^ 

It  is  very  doubtful  whether  a  return  of  premium  would  ever  be 
ordered  in  this  country.  The  few  cases  in  which  the  point  was 
raised  have,  with  a  single  exception,  refused  to  order  a  return.^ 
Ill  a  case  in  Kentucky  the  English  doctrine  was  stated  witiiout 
disapproval  ;  but  a  return  was  not  ordered.** 

It  is  well  settled,  both  in  England  and  in  this  country,  that 
where  one  is  induced  by  fraud  to  buy  an  interest  in  a  business  he 
may  get  back  what  he  paid  for  it.'^  This,  however,  is  clearly  a 
different  case  from  the  one  under  discussion.] 

§  419.  English  Doctrine.  —  [The  English  doctrine  as  to  return 
of  premium  seems  to  be,  that  where  the  dissolution  is  by  decree, 
there  must  be  a  return  of  premium  unless  the  dissolution  was 
solely  caused  by  the  fault  of  the  purchasing  partner.  Thus,  if 
dissolution  was  decreed  because  of  mutual  incompatibility,  with 


1  Wilson  V.  Johnstone,  L.  R.  16  Eq.  606. 

2  Lyon  V.  Tweddell,  17  Ch.  D.  529  (C.  A.) 

^  It  is  to  be  such  [iioportion  of  the  premium  as  is  just  and  equitable,  not  necessarily 
in  [)roportioa  to  the  elapsed  time.     Bullock  v.  Crockett,  3  Gitf.  507. 

■*  An  instructive  case  in  that  connection  is  Bond  v.  Milbourn,  20  W.  R.  197.  In 
tliat  case  the  articles  provided  for_a  valuation  of  the  good-will  upon  dissolution  :  and 
tlie  Court  refused  to  order  a  return  of  pi'emium.  See  Rooke  v.  Nisbet,  50  L.  J.  >;.  s. 
Ch.  588. 

i'  Durham  v.  Hartlett,  3f  Ga.  22  ;  Carlton  v.  Cummins,  51  Ind.  478  ;  Swift  v. 
Ward,  80  la.  700,  45  N.  W.  1044.  * 

•>  Boughner  v.  Black,  83  Ky.  521.  Tlie  defendant  had  bought  a  share  in  a  certain 
business,  giving  in  payment  his  promissory  note.  In  an  action  on  the  note  he  was 
allowed  to  recoup  damages  to  the  business  resulting  from  the  misconduct  of  plaintiff, 
the  selling  partner. 

T  Jauncey  v.  Knowles,  29  L.  J.  N.  s.  Ch.  95  ;  Mycock  v.  Beatson,  13  Ch.  D.  384 ; 
Bichards  v.  Todd,  127  Mass.  167. 

34 


530  THE   LAW   OF   PARTNERSHIP.  [CH.  XVI. 

out  fault  of  either,  a  return  will  be  ordered.^  So  where  the 
dissolution  was  because  of  the  fault  or  misconduct  of  the  partner 
who  received  the  premium.^  So  where  the  dissolution  was 
because  of  the  bankruptcy  of  the  latter.^  And  when  a  physician 
received  a  premium  for  accepting  a  partner  and  promised  to  intro- 
duce the  latter  to  his  patients,  but,  before  he  could  do  it,  died  of 
a  mortal  disease  from  which  at  the  time  of  sale  he  knew  he  was 
suffering,  a  return  of  part  of  the  premium  was  decreed.*  On  the 
other  hand,  where  the  partner  who  paid  the  premium  refused  to 
go  on  with  the  partnership,  he  was  held  not  entitled  to  a  return  of 
premium  ;^  and  it  has  been  said  that  where  the  partners  dissolved 
partnership  by  a  written  agreement  there  could  be  no  return  of 
premium  unless  it  was  provided  for  in  the  agreement.^ 

It  has  even  been  held  that  where  a  partnership  may  be  dis- 
solved at  the  will  of  either  partner,  the  partner  who  received  a 
premium  must  return  part  of  it  if  he  soon  dissolves  it.'  The 
general  rule  was  well  stated  by  Lord  Cairns,  L.  C,  in  At  wood  v. 
Maude :  ^  — 

"  If  the  partner  who  has  received  the  premium  should  after- 
wards commit  a  breach  of  the  partnership  articles,  and  himself 
dissolve  the  partnership,  or  render  its  continuance  impossible,  the 
court  will  not  allow  him  to  take  advantage  of  his  own  wrongful 
act,  but  decrees  the  restitution  of  a  proportion  of  the  premium 
paid,  having  regard  to  the  terms  of  the  contract  and  to  the  length 
of  time  during  which  the  partnership  has  continued.  But,  on  the 
other  hand,  if  the  partner  who  has  paid  the  premium  is  guilty  of 
a  like  breach  of  the  partnership  articles,  and  is  himself  the  author 
of  the  dissolution,  the  court  will  not  allow  him  to  found  a  claim 
to  the  restitution  of  the  premium  upon  his  own  wrongful  act."] 

§  420.  Sale  of  Assets.  —  A  sale  is  sometimes  decreed  as  a 
preliminary  proceeding,  or  a  means  for  making  an  account ;  and, 

1  Airey  v.  Borham,  29  Beav.  620 ;  Pease  v.  Hewitt,  31  Beav.  22  ;  Brewer  v.  Yoike, 
46  L.  T.  N.  s.  289  (C.  A.).     But  see  Wilson  v.  Johnstone,  L.  R.  16  Eq.  606. 

2  Haniil  v.  Stokes,  4  Price,  161  ;  Bury  v.  Allen,  1  Coll.  589  ;  Astle  v.  Wright,  23 
Beav.  77:  Atwood  v.  Maude,  L.  R.  3  Ch.  369  (criticised  in  Wilson  v.  Johnstone. 
L.  R.  16  Eq.  606). 

3  Freeland  i;.  Stansfeld,  2  Sm.  &  Giff.  479  (but  see  contra,  Akhurst  v.  Jackson,  1 
Swanst.  85). 

*  Mackenna  v.  Parkes,  36  L.  J.  x.  s.  Ch.  366. 

5  B]uck  V.  Capstick,  12  Ch.  D.  863. 

6  Lee  V.  Page,  30  L.  J.  N.  s.  Ch.  857,  7  Jur.  N.  s.  768. 

"  Featherstonhaugh  v.  Turner,  25  Beav.  382  ;  Rooke  v.  Nisbet,  50  L.  J.  N.  s. 
Ch.  588.  Contra,  Carlton  v.  Cummins,  51  Ind.  478  ;  Swift  v.  W^ard,  80  la.  700,  45 
N.  W.  1044. 

8  L.  R.  3  Ch.  369,  372 


420.] 


OP    AN    ACCOUNT. 


531 


in  some  instances,  a  sale  will  be  ordered  on  mere  motion,  (wi) 
We  have  already  adverted  to  the  fact,  that  a  sale  is,  generally 
speaking,  that  method  of  disposing  of  the  property,  or  facilitating 
its  division,  which  is  least  ojjen  to  the  danger  of  fraud  or  mistake, 
and  is,  therefore,  much  favored.  Perhaps  the  rule  may  be  stated 
thus  :  The  presumption  is  always  in  favor  of  a  sale ;  the  parties 
may  agree  to  substitute  something  else,  and  the  court  will  sanc- 
tion such  an  agreement,  unless  it  is  open  to  obvious  and  decided 
objection,  as  tainted  with  fraud  or  oppression,  or  leading  to 
injustice,  (n)  But  no  party  has  a  right  to  insist  on  taking  the 
property  at  a  valuation,  without  the  consent  of  the  other  ;  nor 
may  he  insist  as  a  matter  of  course  upon  the  division  of  the  prop- 
erty in  specie^  although  this  would  be  more  favored  than  the 
taking  at  a  valuation  without  consent,  (o)  Still,  it  must  always 
be  possible,  that  the  peculiar  circumstances  of  the  case  may  make 
a  sale  injurious,  and  that  the  true  interests  of  all  parties  may  be 
better  preserved  and  protected  without  it ;  and  then  a  court  is 
under  no  obligation  to  require  a  sale.  (^) 


(m)  Crawshay  v.  Maule,  1  Swanst. 
523. 

{ii}  Ex  parte  Montgomery,  1  Glyn  & 
J.  341  ;  Featherstouhaugh  v.  Fenwick,  17 
Ves.  298 ;  Fox  v.  Hanbury,  Covvp.  445 ; 
Crawshay  v.  Collins,  15  Ves.  218  ;  Reg- 
den  V.  Pierce,  6  Madd.  353  ;  Fereday  v. 
Wightwick,  1  Tamlyn,  261  ;  3  Kent 
Comni.  64 ;  2  Bell  Conira.  632,  633  ; 
Evans  v.  Evans,  9  Paige,  178 ;  Cook  v. 
Oollingridge,  Jac.  607  ;  Leach  v.  Leach, 
IS  Pick.  75. 

(o)  Featherstonhaugh  v.    Fenwick,   17 


Ves.  298  ;  ('ook  v.  Collingridge,  Jac.  607  ; 
Regden  v.  Pierce,  6  Madd.  353  ;  Sigourney 
V.  Munii,  7  Conn.  11  ;  Evans  v.  Evans,  9 
Paige,  178  ;  Dougherty  v.  Van  Nostrand, 
1  Hoff.  Ch.  68  ;  Conwell  v.  Sandidge,  8 
Dana,  278  ;  Crawshay  ?;.  Maule,  1  Swanst. 
495,  523  ;  Simmons  v.  Leonard,  3  Hare, 
581. 

{p)  See  cases  cited  ante,  in  the  two 
preceding  notes.  A  partner's  interest  in  a 
trade-mark  or  brand  is  too  unsubstantial  to 
justify  a  court  in  ordering  a  sale.  Taylor 
V.  Beniis,  4  Biss.  406. 


632  THE    LAW    OF    PARTNERSHIP.  [CH.    XVII. 


CHAPTER   XYII. 

OF    LIMITED    PARTNERSHIPS. 

§421.  Origin  of  Limited  Partnerships. — Formerly  the  name  of 
limited  partnership  was  given  to  one  formed  for  a  special  or  par- 
ticular business  or  enterprise,  (a)  The  meaning  of  this  phrase  was 
not  well  defined,  and  it  was  of  no  importance  in  the  law.  Now, 
however,  in  this  country,  it  is  applied  to  a  new  thing.  A  lim- 
ited partnership,  in  the  present  sense  of  the  phrase,  is  one  in 
which  one  or  more  of  the  partners  are  so  in  the  usual  way,  in 
respect  to  power,  property,  and  obligation;  and  one  or  more  of 
them  have  placed  a  certain  sum  in  the  business,  and  may  lose  that, 
but  are  not  liable  further. 

The  purpose  of  the  law  in  permitting  such  a  partnership  is 
obvious.  It  is  to  encourage  and  facilitate  trade  and  commerce, 
and  induce  capitalists  to  embark  their  capital  therein,  or  a  cer- 
tain part  of  their  capital,  by  relieving  them  from  the  peril,  hanging 
over  all  partnership  by  the  common-law  merchant,  of  losing  not 
only  all  they  have  in  the  trade,  but  all  they  have  beside.  On  the 
continent  of  Europe,  it  has  long  been  known,  (^)  and  found  to  be 
useful  and  safe.  And  almost  forty  years  ago  it  was  permitted  in 
the  great  commercial  State  of  New  York,  by  a  statute  copied  sub- 
stantially from  the  French  Code  of  Commerce  ;  this  being,  says 
Chancellor  Kent,  the  first  instance  in  the  history  of  the  legisla- 
tion of  that  State,  in  which  the  statute  law  of  any  other  country 
than  Great  Britain  has  been  closely  imitated  and  adopted,  (c)    Not 

(a)  Willett  V.  Chambers,  Cowp.  814,  Eiiropp,  limited  partnership.s  are  admitted, 
816;  2  Bell  Comm.,  b.  7,  eh.  2,  p.  26],  provided  they  be  entered  on  a  register; 
5th  ed.  See  also  Robey  v.  Howard,  2  but  the  law  of  England  is  otherwise,  the 
Stark.  N.  P.  C.  557.  For  illustrative  rule  being,  that,  if  a  partner  shares  in 
cases,  see  Carrick  v.  Viekery,  Doug.  652,  advantages,  he  also  shares  in  all  disadvan- 
n.  ;  Holmes  v.  Higgins,  1  B.  &  C.  74  ;  tages."  Limited  partnerships  (la  Societe 
Livingston  v.  Roo.sevelt,  4  Johns.  251;  e??.  co?nw«nr/?7e)  were  established  in  France 
Dubois  V.  Roosevelt,  4  Johns.  262  ;  Liv-  by  the  ordinance  of  1673,  and  have  been 
ingston  v.  Hastie,  2  Caines,  246  ;  Lansing  continued  and  regulated  by  the  new  code 
V.  Gaine,  2  Johns.  300  ;  Ensign  v.  Wands,  of  commerce.  Repertoire  de  Jurisprvdevce 
1  Johns.  Cas.  171  ;  Schollenberger  v.  Sel-  par  Merlin,  tit.  Societe,  art.  2  ;  Code  de 
donridge,  49  Pa.  83.  Commerce,  b.  1,  tit.  3,  §  1. 

(b)  Coope  V.  Eyre,   1   H.  Bl.    48.    per  (r)  3  Kent's  Comm.  36,  7th  ed. 
Lord  Loughborough  :  "  In  many  parts  of 


§  -121.] 


OF   LIMITED    PARTNERSHIPS. 


533 


long  afterwards,  the  example  was  followed  by  other  States ;  and 
now  there  are  similar  provisions  in  upwards  of  twenty  States,  (c?) 
In  England,  this  law  is  not  yet  adopted,  excepting  as  to  joint- 
stock  companies,  (f)  ^ 

Limited  partnership  is  an  innovation  upon  mercantile  law  which 
has  stood  the  severe  test  of  American  practice  for  a  whole  genera- 
tion, and  has  never  been  recalled  or  importantly  modified,  (/)  nor 
found  dangerous  or  injurious  to  the  public,  nor  seriously  objected 
to  in  any  point  of  its  working;  and  it  may  therefore  be  regarded 
as  resting  upon  good  authority.  (^)2 


(d)  JIaine,  Massachusetts,  Rhode 
Island,  Connecticut,  Vermont,  New  York, 
New  Jersey,  Pennsylvania,  Maryland,  In- 
diana, Michigan,  South  Carolina,  Georgia, 
Mississij)pi,  Alabama,  Florida,  Louisiana, 
Illinois,  Virginia,  Kentucky,  Delaware, 
Tennessee,  Ohio,  and  California,  and  prob- 
ably in  other  States,  of  which  the  infor- 
mation has  not  yet  reached  us.  Banking 
and  insurance  are  excepted  in  New  York, 
New  Jersey,  Pennsylvania,  Maryland, 
South  Carolina,  Alabama,  Georgia,  Flor- 
ida, Maine,  Massachusetts,  Jlississippi, 
Connecticut,  Vermont,  Rhode  Island, 
Delaware,  Tennessee,  Ohio,  and  Cali- 
fornia. 

(c)  The  principle  has  been  applied  in 
England  to  joint-stock  companies  ;  and  a 
great  number  of  statutes  have  been  passed 
in  relation  thereto.  The  most  important 
are  the  following  ;  viz.,  1  Vict.  ch.  73  ;  7 
&  8  Vict.  ch.  110  ;  18  &  19  Vict.  ch.  13-3  ; 
19  &  20  Vict.  ch.  47  ;  25  &  26  Vict.  ch. 
89.  By  21  &  22  Vict.  ch.  91,  joint-stock 
banking  companies  are  allowed  to  be 
formed  on  the  principle  of  limited  liabil- 
ity. In  the  British  province  of  New 
Brunswick  (ch.  121,  Rev.  Stat,  of  N.  B.), 
the  principle  has  been  adopted  for  general 
business,  with  the  usual  exceptions  of 
banking  and  insurance.  And  also  in 
Nova  Scotia,  with  like  exceptions.  Rev. 
Stat.  ch.  79,  §§  12-25. 

(/)  Troubat  (Limited  Partnership, 
§  89)  says  :  "  That  the  statutes  on  limited 
partnership  in  the  various  States  should 


be,  in  substance,  identical,  is  perfectly 
natural ;  inasmuch  as  the  common  source, 
the  commercial  code  of  France,  the  work 
of  the  jurists  of  the  empire,  has  been 
largely  borrowed  from  by  them  all." 

(g)  "  Every  one,"  says  an  able  French 
writer,  "  may  have  an  interest  in  com- 
merce and  trade,  under  such  a  system, 
for  amounts  small  or  large.  The  facility, 
too,  of  realization  has  thrown  round  this 
form  of  investment  considerable  attrac- 
tion. We  have  seen  large  capitals  thus 
drawn,  in  the  prom[)test  and  easiest  way, 
into  the  general  industrial  and  commercial 
movement ;  and  the  adjunction  of  bailors 
of  funds  to  responsible  general  partners 
constitutes  not  a  union  of  persons,  but  an 
association  of  capitals  analogous  to  that 
of  incorporated  companies.  In  this  man- 
ner has  it  come  to  pass  that  limited  part- 
nerships have  become  in  reality  so  many 
incorporation.s,  wherein  the  liability  of  the 
general  partners  stands  in  lieu  of  the 
authorization  of  government.  ...  To  con- 
vej'  an  idea  of  the  immense  service  rend- 
ered by  limited  partnerships,  with  cajiitals 
divided  into  shares  thus  transferable,  it 
will  suffice  to  say  that  calculations,  un- 
tinged  with  exaggeration,  carry  to  above 
a  thousand  millions  the  capital  engaged 
in  this  form  of  social  business.  A  few 
year-s,  too,  have  sufficed  to  bring  about 
this  truly  colossal  result,  in  sjiite  of  the 
cases  of  gross  swindling  and  signal  frauds 
that  have  marked  the  progress  of  the  new 
combination  of  interests.     But  by  these 


1  An  approach  to  a  limited  partnership  was  made  by  Bovill^s  Act,  28  &  29  Vict.  ch. 
86  ;  ante,  §  45. 

2  It  is  said  that  the  tendency  now  is  to  regard  limited  partnerships  with  increasing 
favor,  and  to  construe  the  statutes  more  liberally  than  at  first.  White  v.  Eiseman,  134 
N.  Y.  101,  31  N.  E.  276. 


534 


THE    LAW    OF    PARTNERSHIP. 


fCH.    XVII. 


§  422.  General  Principles  of  the  System.  —  No  one  doubts  that 
the  oenenil  liabilities  of  partners,  however  severely  they  may  ])ress 
upon  individuals  in  some  cases,  are,  on  the  whole,  wise  and  neces- 
sary. And  if  the  limited  partnership,  which  is  free  from  these 
stringent  liabilities,  is  useful  and  safe,  both  for  those  who  engage 
in  it  and  for  the  community,  it  must  be  from  the  excellence  of 
that  system  of  precaution  by  which  the  community  is  protected. 
The  general  principles  of  this  system  are,  first,  ascertaining  the 
actual  placing  of  the  sum  proposed  within  the  joint  funds,  where 
it  may  be  liable  for  the  joint  debts ;  secondly,  giving  adequate 
public  notice  of  the  amount,  and  of  the  parties,  and  of  the  busi- 
ness, so  that  the  public  may  estimate  correctly  the  credit  to  be 
given  to  the  firm,  and  providing,  also,  that  notice  should  be  given 
of  any  important  change ;  thirdly,  securing  this  joint  fund  from 
undue  diminution,  and  thus  preventing  the  original  notice  from 
being  deceptive  and  injurious.  The  statutes  of  no  two  States  are 
verbally  alike;  but  they  all  imitate  the  statute  of  New  York  in 
these  essentials,  which  that  statute  borrowed  from  the  Code  of 
Commerce  of  France,  (h)     They  differ  more  or  less  in  the  exact 


frands  it,  was  not  creditors  who  suffered  ; 
it  was  the  shareholders  themselves." 
Wolowsky,  Des  Socie/es  par  Actions,  7,  9, 
13.  In  reference  to  the  same  matter, 
Watson  on  Part.  2,  citing  Pothier  on  Obli- 
gations, says  :  "  Society  in  commcndam, 
&c.,  was  that  between  two  persons,  one  of 
whom  only  put  his  money  into  stock, 
without  doing  any  other  office  of  a  co- 
partner ;  the  other,  who  was  called  the 
complementary  of  the  society,  dispatching 
all  the  business  in  his  own  name.  This 
society  was  very  useful  to  the  State  ;  in- 
asmuch as  all  kinds  of  persons,  even 
nobles  and  professional  men,  might  con- 
tract it,  and  thus  make  their  money  of 
service  to  the  public  :  and  those  who  had 
no  fortune  of  their  own  to  trade  withal, 
hereby  found  means  of  establishing  them- 
selves in  the  world,  and  of  making  their 
industry  and  address  serviceable." 

(h)  In  Ames  v.  Downing,  1  Bradf. 
321,  329,  the' court,  in  holding  that  a 
special  partnership,  formed  under  the  pro- 
visions of  the  Revised  Statutes  of  New 
York,  is  dissolved  by  the  death  of  the 
special  partner,  and  that  it  is,  like  a 
general  partnership,  a  personal  contract, 
expiring  with  the  death  of  any  of  the 
parties,   make  an   elaborate   examination 


of  the  origin,  history,  and  nature  of 
limited  partnerships.  We  quote  at  some 
length.  "The  system  of  limited  part- 
nerships," say  the  court,  "  which  was  in- 
troduced by  statute  into  this  State,  and 
subsequently  very  generally  adopted  in 
many  other  States  of  the  Union,  was 
borrowed  from  the  French  code.  3  Kent 
Comm.  36  ;  Code  de  Commerce,  19,  23,  24. 
Under  the  name  of  la  SocUte  en  commandite 
it  has  existed  in  France  from  the  time  of  the 
Middle  Ages  ;  mention  being  made  of  it  in 
the  most  ancient  commercial  records,  and 
in  the  early  mercantile  legulations  of  Mar- 
seilles and  Montpelier.  In  the  vulgar  Lat- 
inity  of  the  Middle  Ages,  it  was  styled 
commenda  and  in  Italy  accowncnda.  In 
the  statutes  of  Pisa  and  Florence,  it  is 
recognized  as  far  back  as  the  year  1160  ; 
also,  in  the  ordinance  of  Louis-le-Hutin,  of 
131.5  ;  the  statutes  of  Marseilles,  1253  ;  of 
Geneva,  of  1.588.  In  the  Middle  Ages,  it 
was  one  of  the  most  frequent  combinations 
of  trade,  and  was  the  basis  of  the  active 
and  widely-extended  commerce  of  the  opu- 
lent maritime  cities  of  Italy.  It  con- 
tiibuted  largely  to  the  support  of  the 
great  and  prosperous  trade  carried  on 
along  the  shores  of  the  Mediterranean  ; 
was  known  in  Languedoc,  Provence,  and 


§  422.] 


OF    LIMITED    PARTNERSHIPS. 


53') 


provisions  by  which  these  essential  precautions  are  taken ;  but 
they  resemble  each  other  so  much  in  these  that  they  may  be 
stated  generally  as  follows. 


Lomharily  ;  entered  into  most  of  the  in- 
(lustriiil  occupations  and  pursuits  of  the 
age  ;  and  even  travelled,  under  the  pro- 
tection of  tlie  arms  of  the  Crusaders,  to 
tlie  city  of  Jerusalem.  At  a  period  wiien 
capital  was  in  the  hands  of  nobles  and 
clergy,  who,  from  pride  of  caste,  or  can- 
onical regidations,  could  not  engage  di- 
rectly in  trade,  it  affordeil  the  means  of 
secretly  embaiking  in  commercial  enter- 
l)rises,  and  reaping  the  i)rofits  of  such 
lucrative  f)ursuits,  without  personal  risk  ; 
and  thus  the  vast  wealth,  which  other- 
wise would  have  lain  dormant  in  the  cof- 
fers of  the  rich,  became  tlie  foundation, 
by  means  of  this  ingenious  idea,  of  tiiat 
great  commerce  which  made  princes  of 
the  merchants,  elevated  the  trading 
classes,  and  brought  the  commons  into 
position  as  an  influential  estate  in  the 
commonwealth.  Independent  of  the  in- 
terest naturally  attaching  to  the  history 
of  a  mercantile  contract  of  such  ancient 
origin,  but  so  recently  introduced,  where 
the  general  partnership,  known  to  the 
common  law,  has  hitherto  existed  alone, 
1  have  been  led  to  refer  to  tiie  facts  just 
stflted,  for  the  purpose  of  showing  that 
the  special  partnership  is,  in  fat:t,  no 
novelty,  but  an  institution  of  considerable 
antii|uity,  well  known,  understood,  and 
regulated.  Ducange  defines  it  to  be, 
'SociETAS  Mercatorum  q^M  uni  socio- 
rum  Mm  neciotiationis  cura  commendatur, 
certis  conditioiiibus.'  It  was  always  con- 
sidered a  proper  j)artnership  (socie(ns), 
with  certain  reserves  and  restrictions  ;  and 
in  the  ordinance  of  Louis  XIV.,  of  1673, 
it  is  ranked  as  a  regular  partnership.  In 
the  Code  of  Commerce,  it  is  classed  in 
the  same  manner.  I  may  add,  as  an 
imjiortant  fact,  for  the  explanation  of  a 
distinction  to  which  I  shall  shortly  advert, 
that  the  French  code  permits  a  special 
partnership,  of  whi('h  the  ca]iital  may  lie 
divided  into  shares  or  stock,  transmissible 
from  hand  to  hand.  In  such  a  case,  the 
death  of  the  special  partner  does  not 
dissolve  the  firm,  the  creation  of  trans- 
missible shares  being  a  proof  that  the 
association    is    formed     respedu    negolii, 


and  not  respedu  personarum ;  but,  even 
in  such  a  partnership,  the  death  of  the 
general  partner  effects  a  dissolution,  unless 
It  is  expressly  stipulated  otherwise.  But 
says  M.  Tioploiig,  it  would  be  wrong  to 
extend  the  rule  that  a  partnership,  of 
which  the  capital  is  divided  into  trans- 
missible shares,  is  not  dissolved  by  the 
death  of  a  shareholder,  to  a  special  ])art- 
nership,  the  capital  of  which  is  not.  so 
divided.  The  statute  of  New  York  recog- 
nizes only  the  latter  kind  of  partnershij)  ; 
the  names  of  the  parties  being  required 
to  be  registered,  and  any  change  in  the 
name  working  a  dissolution,  and  turning 
the  firm  into  a  general  partnership.  Such 
a  partnership  has  always  been  held  to  be 
dissolved  by  the  death  of  the  special 
partner.  This  partnership  remains  undi^r 
the  dominion  of  the  common  law.  It 
has  created  between  the  special  and  the 
general  partner  a  tie  which  is  not  sub- 
jected to  the  caprice  of  unforeseen  changes ; 
it  has  produced  mutual  relations  of  confi- 
dence, which  the  general  partner  cannot 
be  forced  to  extend  to  strangers.  M. 
Troplong,  Comm.  ;  die  Contrat  de  Societe 
Civile,  Src,  T.  1  preface,  57,  §  377,  &c., 
T,  2,  §  888,  p.  368.  The  French  jurists 
generally  take  the  same  position  ;  defin- 
ing the  special  partnership  as  a  proper 
{lartnership,  and  applying  the  law  of  dis- 
solution by  death  to  all.  Pothier,  Traite 
du  Contrat  de  Societe,  ch.  2,  §  2,  ch.  8, 
§  3  ;  Merlin,  Repertoire  de  Jurisjn-udciice, 
art,  Societe,  §  7  ;  Duranton,  Droit  Fraii' 
(;ais,  tom.  17,  1.  3,  tit.  9,  §  470.  Pardessus 
discusses  the  question  somewhat  at  length. 
Droit  Commercial ,  torn.  4,  pt.  5,  tit.  3, 
ch.  1,  §  4.  It  might  be  thought,  he 
says,  with  some  ayipearance  of  jdausibil- 
ity,  that  the  rule  of  a  dissolution  by  death 
should  be  limited  to  general  partnerships, 
in  forming  which  the  probity  and  intel- 
ligence of  each  member  have  been  recip- 
rocally taken  into  consideration.  Indeed, 
the  special  partner  does  not  suppose,  on 
the  part  of  the  general  partners,  any  per- 
sonal confidence  in  the  special  partners  ; 
and,  as  the  interests  and  the  rights  of  the 
latter    are    exclusively   limited    to    their 


536 


THE   LAW   OF   PARTNERSHIP. 


[CH.    XVII. 


§423.  General  Partners. — There  must  be  some  persons  who 
are  general  partners,  all  of  whose  names  are  used  in  the  firm, 
without  the  addition  of  "  company,"  or  any  other  phrase  indicat- 
ing that  tlierc  are  other  general  partners.^ 

All  of  those  general  partners  are  liable  to  creditors  in  precisely 
the  same  \\ay  as  if  there  were  no  special  partners. 

The  general  partners  alone  conduct  and  control  the  business  of 


shares,  it  would  seena  that  they  were  not 
uiodilied  by  their  decease,  and  their  heirs 
called  to  take  their  place  could  have  no 
right  to  insist  that  death  has  dissolved 
the  firm,  nor  the  geneial  partners  insist 
upon  that  result.  These  reasons,  to  ques- 
tion the  general  rule,  ajipear,  neverthe- 
less, to  yield  to  others  more  decisive.  Tiie 
persons,  and  the  character  of  the  special 
partners  have  been  regarded  by  the  gen- 
eral partners  when  they  formed  this  kind 
of  association.  The  special  partners  are, 
in  effect,  to  a  greater  or  less  extent,  called 
to  the  annual  accountings,  to  meetings 
for  the  settlement  of  the  profits  and  losses, 
and  to  an  examination  of  the  state  of  the 
affairs.  This  scrutiny,  and  a  right  to  in- 
sist upon  a  dissolution  in  consequence  of 
a  breach  of  the  contract,  or  to  urge  their 
claims  when  the  affairs  are  liquidated,  are 
more  or  less  rigorously  exercised.  The 
difficulty  of  acting  harmoniously  with 
different  persons,  substituted  in  the  jjlace 
of  those  with  whom  the  original  contract 
was  made,  the  distrust  of  heirs,  who  have 
not  the  grounds  of  esteem  and  confidence 
which  influenced  the  deceased,  and  the 
impossibility  of  treating  easily  with  min- 
ors, —  are  some  of  the  reasons  w-hich 
will  not  permit  special  partnerships  to  he 
excepted  from  the  general  rule.  It  may 
be  objected  that  these  reasons  appl}^  only 
in  favor  of  the  general  partners,  and  that 
it  is  for  tliem  to  judge  as  to  the  continua- 
tion of  the  business  with  the  heirs.  But 
the  heirs  of  the  deceased  ought  to  enjoy 
the  same  privilege.  Reciprocal  rights 
ought  to  result  from  a  mutual  agreement. 
There  is  no  solid  reason  why  the  special 
partnership  should  not  be  dissolved  by 
the  death  of  one  of  the  partners,  except 
w^hen  the  capital  is  divided  into  trans- 
missible shares  ;   in    which  case,   the   as- 


sociates having  consented  that  each  may 
substitute  another  in  his  place,  as  he  may 
desire,  without  the  authority  of  the  other.s, 
it  is  natural  to  conclude  that  the  heirs  of 
a  deceased  member  fill  his  place  in  the 
same  manner  as  if  he  had  assigned  his 
share.  1  have  given  the  substance  of  the 
reasoning  of  Pardessus  ;  and  the  result 
he  attains  has  not  only  the  authority  of 
M.  Troplong  in  its  favor,  but  also  that 
of  other  conmientators  {MM.  Mnlpcyrc 
et  Jourdain,  No.  474  ;  M.  Pcrsil,  Fill, 
p.  344),  while  it  does  not  appear  to  have 
been  questioned  or  doubted.  (But  as  to 
this,  see  Troubat  on  Limited  Part.  ( Phila. ) 
1853,  §  430,  citing  Fierli,  vol.  1,  46,  47  ; 
Casctreijis  dc  Commer.,  Disc.  29,  No.  10; 
Zanch  de  Societe,  No.  19,  20).  It  thus 
appears  that,  in  the  jurisprudence  of  that 
nation  whence  the  peculiar  contract  of  a 
special  partnersliii)  has  heen  adopted  b}' 
us,  and  grafted  into  our  law,  —  where 
the  system  has  long  existed,  is  familiarly 
known,  and  its  nature,  qualities,  and 
practical  relations  to  various  events  and 
circumstances  have  been  well  considered 
under  the  light  ot  no  brief  experience,  — 
the  effect  of  the  death  of  the  special 
partner  is  to  dissolve  the  firm.  This 
agrees  with  the  conclusion  1  had  attained 
upon  independent  reasoning,  before  con- 
sulting those  authorities  ;  and  I  am,  con- 
sequently, led  to  pronounce  the  firm  in 
which  the  testator  was  a  special  partner, 
dissolved  at  his  death  ;  and  to  hold  the 
executor,  who  was  his  general  partner, 
responsible  for  the  testator's  interest  in  the 
firm  at  that  time,  upon  a  liquidation  of 
the  affairs,  as  if  ma(le  then."  pp.  329- 
333.  For  a  similar  resume,  see  Jac- 
quin  V.  Buisson,  11  How.  (N.  Y.)  Prac. 
385,  et  scq.,  in  which  the  above  opinion 
is  concurred  in. 


1  A  minor  naay  be  a  general  partner. 
N.  E.  1066. 


Continental  Nat.  Bank  v.  Strauss,  (N.  Y.)  32 


§  424.]  OF   LIMITED   PARTNERSHIPS.  537 

the  partnership.  But,  in  some  States,  the  statute  permits  the 
special  partner  to  examine  at  his  pleasure  into  the  accounts  and 
business  of  the  firm,  and  give  advice  in  relation  to  it ;  and,  where 
this  is  not  expressly  permitted,  it  would  doubtless  be  allowed 
from  its  inherent  propriety  and  necessity.^ 

§  424.  Certificate.  —  There  must  be  a  certificate,  signed  by  all 
the  parties,  setting  forth  sundry  particulars,  verified  by  the  oath 
or  affirmation  of  the  parties  before  a  magistrate ;  and,  before  the 
business  commences,  this  certificate  must  be  properly  advertised, 
and  also  recorded  with  some  public  records,  (a)  intiie  place  where 
the  parties  reside,  or  where  the  firm  is  to  do  business,  or  in  both, 
and  in  every  other  place  where  the  firm  is  to  do  business. 

The  particulars  which  this  certificate  must  state  are  generally 
these :  — 

The  names  of  all  the  partners,  distinguishing  between  .those 
who  are  to  be  general  partnei's  and  those  who  are  to  be  only  spe- 
cial partners ;  and  the  residences  of  all. 

The  name  which  the  firm  is  to  bear.  The  amount  of  money 
actually  paid  in,  in  cash,  by  the  special  partners.^ 


(a)  The  articles  do  not  take  effect  till     partners.     Levy    v.    Look,    5    Daly,    46 
they  are  recorded.     As  to  transactions  be-     [Smith  v.  Warden,  86  Mo.  382]. 
fore  that  time,    the  partners  are   general 


^  There  is  nothing  in  tlie  statutes  to  prevent  a  special  partner  from  agreeing  with 
the  others  to  share  part  of  tlie  losses.  Metropolitan  Nat.  Bank  v.  Sirret,  97  N.  Y, 
320. 

2  Where  the  capital  appears  to  have  been  paid  in  cash,  this  must  have  been  done  or 
the  certitieate  is  invalid.  But  if  the  cash  was  paid  in  bona  fide  by  the  special  partner, 
and  was  at  once  paid  out  by  the  general  partners  for  purposes  of  the  firm,  before  the 
certificate  was  filed,  the  certitieate  was  good.  Vernon  v.  Brunson,  (N.  J.)  25  Atl.  511. 
If  the  special  partner  contributes  cash  in  good  faith,  and  the  general  partners  after- 
wards buy  from  him  the  assets  of  the  business  to  which  it  is  intended  that  the  limited 
partnership  shall  succeed,  though  all  his  cash  contribution  is  repaid  to  him  the  trans- 
action is  valid,  provided  it  was  bon  fide  ;  but  if  it  was  a  mere  device  to  cover  a  contri- 
bution of  goods  iTistead  of  cash,  the  transaction  is  not  valid.  Metropolitan  Nat.  Bank 
V.  Sirret,  97  N.  Y.  320.  See  Lineweaver  v.  Slagle,  64  Md.  465,  2  Atl.  693.  In  some 
States,  the  contribution  of  the  special  partner  must  be  in  cash.  In  that  case  nothing 
but  cash  is  enough.  A  contribution  of  goods  is  invalid.  In  re  Allen,  41  Minn.  430, 
43  N.  W.  382.  So  of  credits,  or  the  assets  of  another  firm,  or  even  of  government 
bonds.  Lineweaver  v.  Slagle,  64  Md.  465,  2  Atl.  693.  In  Pennsylvania  the  contribu- 
tion ma}'  be  made  in  goods  at  a  valuation.  An  excessive  valuation  does  not  render  the 
certificate  invalid,  if  it  was  bond  fide.  Rehfuss  v.  Moore,  134  Pa.  462,  19  Atl.  756. 
Full  information  must  be  given  as  to  the  nature  of  the  goods ;  and  the  value  itemized. 
Maloney  v.  Bruce,  94  Pa.  249.  Therefore  a  certificate  that  a  certain  amount  was  con- 
tributed "  in  merchandise,  lumber,  and  bills  receivable,"  is  invalid.  It  cannot  even  be 
told  how  much  each  item  was  worth.  Van  Horn  v.  Corcoran,  127  Pa.  255,  18  Atl.  16.  See 
further,  as  to  the  particularity  required  in  filing  a  .statement  of  the  capital  contributed, 


538  THE   LAW   OF   PARTNERSHIP.  [CH.  XVII. 

The  nature  of  the  business  in  which  the  firm  proposes  to  engage, 
or  for  which  it  is  formed. 

The  time  for  which  the  partnership  is  formed  ;  that  is,  the  daj 
on  which  it  is  to  begin  and  the  day  on  which  it  is  to  end,  or  the 
period  for  which  it  is  to  endure. 

All  of  these  are  preliminary  measures  of  notice  and  precaution. 
And  the  special  partner  must  look  to  it  that  all  are  complied  with  ; 
for  a  substantial  mistake,  or  an  intended  omission  or  error,  by 
himself  or  by  a  general  partner,  or  by  any  other  special  partner, 
destroys  the  limitation  of  the  partnership,  and  all  the  partners 
stand  at  once  on  the  common  liabilities  of  partners. (z)     This  is 

(i)  Richardson  r.  Hogg,  38  Pa.   153  ;  who  has   not   strictly  comyilied  with  the 

Vaiidike  v.  Kosskane,  67  Pa.  330  ;  Boweu  requisitions    of    the    statutes    respecting 

V.  Argall,  24  Wend.  496  ;  JMadisou  County  limited  partnerships  cannot  claim  exenip- 

Bauk    V.  Gould,  5  Hill,    309 ;    Smith  v.  tion,  as  a  special  partner,  from   liability 

Argall,   6   Hill,    479  ;    3   Denio,    435.     A  for  the  debts  of  the  firm  of  which  he  is 

contribution  "in  cash  and  goods  "is  not  a  member.     Thu.s,   the   provision    in   the 

a  contribution    "in  cash,"    Van  Ingen  v.  Pub.  Stats.,  ch.  75,  §  2,  of  Massachusetts, 

Whitman,   62  N.  Y.  513  ;  He  Merrill,  13  requiring    an    actual    cash    ])ayment,    as 

K.  B.  R.   91  ;  nor  is  a  permission  to  use  capital,  to  be  made  by  one  who  enters  a 

certain  United    States    bonds,   the   bailee  firm  as  a  special  partner,  in  order  to  ex- 

not    harino-    notice    of    this    permission,  ouerate  him  from  lialnlity  for  the  debts  of 

Haggerty  v.   Foster,   103  Mass.   17.     One  the   firm,    is   not   complied   with   by   the 

Laflin  &  Rand  Powder  Co.  v.  Steytler,  146  Pa.  434,  23  Atl.  215  ;  Cock  v.  Bailey,  146 
Pa.  328,   23  Atl.  370. 

It  was  formerly  held  that  a  cash  contribution  cannot  be  made  by  giving  a  check 
payable  to  the  order  of  the  partnership,  though  the  special  partner  had  funds  in  the 
bank  to  meet  it.  McGinnis  v.  Farrelly,  27  F.  R.  33.  But  a  check  that  is  certified  by 
the  bank  has  been  held  good  as  a  contribution  of  cash.  Liiieweaver  v.  Slagle,  64  Md. 
465,  2  Atl.  693  ;  White  v.  Eiseman,  134  N.  Y.  101,  31  N.  E.  276.  Yet  the  certifica- 
tion is  only  the  acceptance  of  the  bank,  instead  of  the  special  partner,  as  debtor  ;  so 
that  it  seems  hard  to  draw  a  line  between  the  cases.  It  would  perhaps  be  better  to 
make  the  question  turn  on  the  facts ;  if  the  drawer  of  the  check  was  in  good  credit  at  a 
sound  bank,  his  check  might  well  be  regarded  as  cash.  The  only  alternative  would 
seem  to  be  to  require  an  actual  payment  of  cash  by  the  special  to  the  general  partner. 
In  Rothchild  r.  Hoge,  43  F.  R.  97,  it  was  held  that  where  the  special  partner,  being  in 
good  credit,  contributed  a  check  on  a  neighboring  bank,  payable  immediately,  and  the 
bank,  as  soon  as  the  check  was  presented,  placed  the  amount  to  the  credit  of  the  firm, 
there  was  a  good  contribution  of  cash.  It  did  not  appear  that  the  check  was  presented 
before  the  certificate  was  filed.  Under  the  Pennsylvania  Acts,  the  whole  capital  need 
not  be  contriKuted  at  once,  provided  it  is  so  stated  in  the  certificate  ;  but  some  jtart  at 
least  must  be  paid  in  before  the  certificate  is  filed.  Hill  i-.  Stetler,  127  Pa.  14p,  17 
Atl.  887.  Where  it  was  certified  that  three-fourths  of  the  capital  was  paid  in,  and  it 
a]ipeared  that  some  had  paid  more  and  some  less  than  that  portion  of  their  contribu- 
tions, but  three-fourths  of  the  whole  amount  had  been  paid  in,  the  certificate  was  valid. 
Lauder  v.  Logan,  123  Pa.  34,  16  Atl.  44.  The  certificate  speaks  from  the  time  of  filing  ; 
it  is  therefore  enough  that  the  capital  is  paid  in  then.  White  v.  Eiseman,  134  N.  Y. 
101,  31  X.  E.  276.  If  the  certificate  is  false,  the  special  partner  is  liable  as  a  general 
partner  even  to  a  creditor  who  knew  of  the  falsity.  Sheble  v.  Strong,  128  Pa.  315,  18 
Atl.  397. 


§  425.] 


OF    LIMITED    PARTNERSHIPS. 


539 


certainly  so  as  to  creditors,  without  exception  or  qualification.  As 
between  the  partners,  their  agreements  might  still  be  valid,  and 
would  then  affect  their  mutual  rights  and  obligations.^ 

§  425.  Capital.  —  Besides  these  preliminary  precautions,  there 
are  otlicrs,  which  come  into  force  after  the  partnership  is  estab- 
lished, and  remain  in  force  so  long  as  it  is  in  operation,  which  are 
not  less  important.  The  capital  is  not  to  be  reduced  during  the 
partnership.  If  a  special  partner  withdraws  any  part  of  the  cap- 
ital, and  the  firm  becomes  insolvent,  he  is  liable  to  the  creditors 
for  the  amount  so  withdrawn,  with  interest.  (^')     A  withdrawal 


delivery  to  the  firm  of  promissory  notes, 
which  are  received  and  treated  as  cash. 
And  it  was  further  held,  that  the  actual 
cash  payment,  as  capital,  required  by  the 
statute,  of  one  who  enters  a  firm  as  special 
partner,  must  be  made  prior  to  the  publi- 
cation of  the  certificate  ot  the  formation  of 
the  firm.  Pierce  v.  Bryant,  5  Alien,  91. 
In  New  York,  wliere  the  certificate  was 
made,  dated,  and  filed,  Dec.  23,  1870, 
which  by  its  terms  was  to  take  effect  Jan. 
1st,  1871,  and  the  special  partner  at  the 
same  time  gave  his  check  for  the  amount 
of  his  capital,  dated  Dec.  31,  1870,  to  his 
copartners,  this  was  held  not  a  cash  pay- 
ment. Durant  v.  Abendroth,  69  N.  Y. 
148.  A  statement  in  the  certificate  of  the 
formation  of  a  limited  partnership,  that 
the  special  partner  has  contributed  a  cer- 
tain sum,  when,  in  fact,  a  portion  of  that 
sum  has  been  contributed  by  another  per- 
son, with  the  design  of  securing  the  rights 
and  benefits  of  a  special  partner  without 
becoming  one,  renders  all  the  parties  liable 
as  general  partners.  Bulkley  v:  Marks, 
15  Abb.  Pr.  454.  And  see  Haviland  v. 
Chace,  39  Barb.  283  ;  Ward  v.  Newell,  42 
Barb.  482. 


(j)  La  ( 'homette t).  Thomas,!  La.  Ann. 
120  ,  Bulkley  v.  Marks,  15  Abb.  Pr.  454. 
Where,  during  the  continuance  of  a  special 
partnership,  the  special  partner  sold  out 
his  interest  in  the  concern  to  the  general 
partner,  for  a  sum  exceeding  the  amount 
of  the  capital  he  had  placed  in  the  busi- 
ness, and  for  the  price  of  his  interest  so 
sold  received  a  security,  pledging  to  him 
all  the  personal  property  of  the  partner- 
ship, it  was  held  that  this,  in  effect, 
amounted  to  a  withdrawal  by  him  of  the 
capital  he  originally  contributed  to  the 
cojiartnership  ;  that  he  had  secured  to 
him  that  which,  by  the  copartnership,  he 
had  contributed  in  cash,  and  without  se- 
curity, to  be  employed  in  the  business, 
and  to  stand  as  indemnity  to  those  who 
should  deal  with  the  partnership  ;  and 
that  the  transaction  was,  in  effect,  an 
alteration  of  the  capital  of  the  partner- 
ship ;  and  the  consequence  prescribed  by 
the  statute  ensued  ;  viz.,  if  the  business 
was  carried  on,  he  was  thereafter  liable  as 
general  partner.  Beers  v.  Reynolds,  12 
Barb.  288,  11  N.  Y.  97.  But  in  Lachaise 
!,•.  Marks,  4  E.  D.  Smith,  610,  where  there 
bad  be«i  an  agreement  of  dissolution,  it 


1  A  member  of  a  limited  partnership  cannot  take  advantage  of  a  defect  in  organiza- 
tion to  increase  the  liability  of  other  members,  as  between  themselves.  Egbert  v. 
Kimberly,  (Pa.)  23  Atl.  437  ;  Allegheny  Nat.  Bank  v.  Bailey,  147  Pa.  Ill  ;  23  Atl. 
439. 

Though  the  organization  is  invalid,  the  body  is  nevertheless  a  partnership  ;  and 
though  the  liability  of  the  members  is  altered,  all  contracts  with  the  firm  remain  in 
full  force.  Thus  the  validity  of  a  mortgage  given  by  a  limited  partnership  is  unaffected 
by  defects  in  the  organization.  Briar  Hill  Coal  &  Iron  Co.  v.  Atlas  Works,  146  Pa. 
290  ;  23  Atl.  326.  Nor  can  an  in.surance  company  take  advantage  of  a  defect  in  the 
certificate  to  avoid  a  policy  on  the  partnership  goods.  Clement  v.  British  America 
Assur.  Co.,  141  Mass.  298  ;  5  N.  E.  847. 


540 


THE    LAW    OF    PARTNERSHIP. 


[CH.  XVII. 


or  a  diminution  of  the  capital  by  a  general  partner,  without  the 
consent,  or  knowledge,  or  witli  ignorance  through  negligence,  of 
the  special  partner,  would  not  make  him  liable.  (A;) 

§  426.  Position  of  Special  Partner.  —  If  the  name  of  the  special 
partner  be  used  in  any  contract  with  his  consent,  and,  still  more, 
if  he  take  an  active  part  in  the  formation  of  any  contract,  he  is 
liable  upon  it  as  a  general  partner.  (Z)^ 

In  New  York,  it  is  provided  that,  if  the  firm  make  an  arrange- 
ment for  tiie  payment  of  their  debts,  and  therein  make  any 
preference  among  their  creditors,  or  provide  for  the  special  partner 
as  a  creditor,  the  arrangement  would  be  void,  (wi) 


was  held  that  the  mere  giving  of  notes, 
payable,  at  a  future  time,  by  the  general 
partners,  to  the  special  partner,  in  the 
same  name  as  that  of  the  partnership, 
upon  the  making  of  such  agi-eement,  with 
a  view  of  purchasing  his  interest,  is  not  a 
withdrawal  of  capital.  The  receipt,  by 
the  special  partner,  of  dividends,  as  a 
device  to  withdraw  capital,  will  render 
him  liable  as  a  general  partner;  but  divi- 
dends may  be  paid  to  him  in  good  faith, 
with  only  the  effect  to  require  him  to 
restore  in  case  the  capital  shall  thereby  be 
unintentionally  reduced.  Id.  In  Robin- 
son V.  Mcintosh,  3  E.  D.  Smith,  221,  in 
a  case  of  limited  partnership,  it  was  held, 
that  a  court  of  equity  has  ]iower,  at  the 
suit  of  one  partner,  to  compel  another  to 
contribute  a  sum  stipulated  as  capital,  or 
to  restore  it  to  the  common  fund,  if  he 
have  withdrawn  it  before  the  debts  are 
paid. 

ik)  See  Singer  v.  Kelly,  44  Pa.  145; 
[Seibert  v.   Bakewell,  87  Pa.   506]. 

(/)  Jonau  V.  Blanchard,  2  Rob.  (La.) 
513  ;  ^ladison  County  Bank  v.  Gould,  5 
Hill,  309.  In  this  last  case,  the  court  say  : 
"  If  the  defendant,  Gould,  went  beyond 
advising  with  his  partners,  and  was 
actively  concerned  in  negotiating  and 
making  the  purchase  of  the  mill,  he  has 
already  rendered  him.«elf  liable  to  answer 
as  a  general  partner,  so  far  as  relates  to 
any  liability  of  the  partnershiji  growing 
out   of  that  particular  transaction     And 


we  think  he  must  also  be  deemed  a  general 
partner  as  to  all  the  debts  and  liabilities 
ot  the  firm.  The  legislature  has  plainly 
manifested  the  intention  of  excluding  the 
si)ecial  partner  from  all  active  participa- 
tion in  the  business  of  the  firm;  and  his 
interference  is  forbidden  upon  the  pain  of 
losing  his  character  and  protection  as  a 
special  partner.  The  moment  he  engages 
in  the  business  of  the  firm,  he  violates  one 
of  the  conditions  on  which  his  exeni])tion 
from  liability  dei)ends,  and  he  becomes  a 
general  partner  by  his  own  voluntary  act." 
So  if  he  represents  himself  to  be  a  general 
partner.  Barrows  v.  Downs,  9  R.  I.  446. 
If  a  special  partner  buys  out  the  entire 
property  of  the  firm  before  the  limitation 
expires,  and  continues  the  business  of  the 
firm,  he  is  liable  as  a  general  partner  from 
the  beginning.  First  Nat.  Bk.  v.  Whitney, 
4  Lans  34.  See  Richardson  v.  Hogg,  38 
Pa.  153  ;  McKnight  v.  Ratcliff'e,  44  Pa. 
156.  If  the  special  terms  of  the  jiartner- 
ship  are  violated  to  the  advantage  of  the 
firm,  the  firm  is  liable.  Johnson  v.  Bern- 
heim,  76  X.  C.  130. 

(m)  Hayes  v.  Bement,  3  Sandf.  394; 
Innes  v.  Lansing,  7  Paige,  583  ;  Mills  v. 
Argall,  6  Paige,  577  ;  Whitewright  v. 
Stimpson,  2  Barb.  379  ;  Jackson  v.  Shel- 
don, 9  Abb.  Pr.  127.  But  in  The  Artisans' 
Bank  v.  Treadwell,  34  Barb.  553,  it  was 
held,  that,  when  a  limited  partnership  be- 
comes insolvent,  its  assets  do  not,  from 
that  time,  irrespective  of  the  condition  of 


1  Where  a  special  partner  files  a  bill  for  dissolution  during  the  term  because  of  mis- 
conduct of  the  general  partner,  and  is  appointed  receiver,  it  is  not  such  an  interference 
or  interruption  of  the  business  as  to  make  him  a  general,  partner.  Continental  Nat. 
Bankv.  Strauss,  (X.  Y.)  32  X.  E.  1066. 


§  -i^^'-J 


OF    LIMITED    PARTNERSHIPS. 


541 


§  427.    Incidents   of   Limited    Partnerships.  —  All   suits   must    be 
brougiit  by  and  against  the  general   partners,  unless  tlie  special 

any  creditor's  demand,  become  trust  funds  endeavoring  to  do  this,  lie  becomes  a  cred- 

for  the  benefit  of  all  the  creditors  of  the  itor,   and  still   the    partnersliip  fails  and 

j)artnership  ;  so  as  to  prevent  a  cieditor,  becomes  insolvent,  he  loses  his  ca[)ital,  and 

either  by  sui)erior  diligence  or  by  the  favor  his  debt  is  ])ostponed  ;    at  the  same  time, 


of  the  partners,  from  acquiring  or  jmssess- 
iiig  a  valid  lien  thereon  in  preference  to 
other  creditors.  The  assets  of  the  partner- 
ship are  trust  funds  for  the  benefit  of  the 
creditors  e(iually,  except  such  as,  by  su- 
perior vigilance,  have  obtained  a  lien  on 


he  has  not  directed  or  managed  its  atlairs. 
In  cases  of  corporations,  a  fixed  sum  may 
be  paid  in  as  cai)ital  ;  that  sum  is  all  that 
is  put  at  hazard.  The  ]iarties  contiibuting 
it  may  be,  and  generally  are,  the  chief 
managers.     If  the  stockholders  loan  to  the 


the  property  of  the  partnership.  And  they  corporation,  they  are  put,  in  case  of  insol- 
bcconie  trust  funds  for  such  mode  of  dis-  vency,  upon  the  same  footing  as  other 
tribution,  so  far  as  any  action  of  the  part-  creditors  :  their  debt  is  not  postponed.  In 
ners  is  concerned,  at  the  time  of  insolvency;  limited  partnerships,  which  are  a  kind  of 
and,  so  far  as  the  action  of  creditors  is  quasi  corporations,  the  special  partner,  who 
concerneil,  at  the  time  the  court  takes  pos-  contributes  his  ca[)ita!,  can  have  no  voice 
session  of  the  fund,  either  by  decree  or  by  in  the  management  of  the  business  ;  and, 
tiie  appointment  of  a  receiver.  Until  that  if  he  loans  to  the  firm,  his  debt  must  be 
time,  it  is  the  right  of  every  creditor  to  ))osti)oned  to  those  of  all  the  other  cred- 
seek  a  preference,  and  to  obtain  one,  if  he  itors  :  and  we  are  now  asked  to  say,  that, 
can,  by  superior  vigilance.  In  Hayes  v.  if  any  other  firm  of  which  he  happens  to 
B>'ment,  cited  ante,,  in  holding  that,  where  be  a  member  shall  loan  to  such  copart- 
a  limited  partnership  becomes  insolvent,  nership,  even  though  it  be  without  his 
and  the  special  partner  is  a  general  partner  knowledge,  or  shall,  in  the  usual  course  of 
in  another  firm  to  which  the  limited  part-  business  or  dealings,  become  creditors  of 
nership  is  indebted,  neither  the  debt  due  such  copartnership,  and  such  copartnership 
to  such  firm,  nor  such  general  partner's  shall  become  insolvent,  that  then  the  debt 
interest  therein,  is  postponed  under  the  of  the  creditor  firm,  or,  at  all  events,  his 
provisions  of  the  statute  directing  that  a  interest  in  such  debt,  must  be  postponed, 
special  partner  shall  not  claim  as  a  creditor  We  confess  that  we  do  not  belie^'e  the 
against  the  limited  partnership,  of  which  legislature  so  intended,  and  we  do  not 
he  is  a  member,  until  the  claims  of  all  the  think  it  has  so  said.  Had  the  statute  pro- 
other  creditors  are  satisfied,  —  the  court  vided  that  the  sjiecial  partner  should  not, 
say:  "  The  statute  authorizing  and  regulat-  directly  or  indirectly,  neither  individually 
ing  limited  partnerships  is  strict  and  severe;  nor  jointly,  become  a  creditor,  and,  if  he 
and  though,  perhaps,  not  unnecessarily  so,  did,  that  then  any  debt  due  to  him  indi- 
we  are  not  disposed  to  put  such  a  construe-  vidually,  or  his  portion  of  a  debt  due 
tion  upon  its  language  as  would,  in  a  great  jointly,  or  his  interest  in  any  debt  due  to 
measure,  impair  the  usefulness,  if  not  de-  any  other  })erson  or  persons,  corporation  or 
feat  the  objects  intended  to  be  accomplished  corporations,  or  to  any  partnership,  whether 
by  its  passage.  The  special  partner  is  un-  general  or  limited,  should  be  post|ioned, 
der  disabilities  which  are  not  imposed  upon  the  case  wouM  be  different.  As  it  now  is, 
general  partners,  and,  in  consideration,  he  we  consider  that  the  legislature, simply 
is  relieved  from  liability,  except  to  the  intended  to  put  the  special  partner,  so  fixr 
extent  of  the  capital  which  he  may  con-  as  lie  is  a  creditor,  upon  pi'ecisely  the  same 
tribute  ;  but  as  in  many,  if  not  most,  of  footing  as  if  he  were  a  general  partner." 
such  limited  copartnerships,  the  bulk  of  It  was  further  held,  in  this  case,  that 
the  cash  capital  is  contributed  by  the  spe-  where  the  same  person  is  a  general  partner 
cial  partner,  it  must  generally  be  for  his  in  two  different  firms,  one  of  which  be- 
interest  to  sustain,  as  far  as  possible,  and  comes  insolvent,  indebted  to  the  other,  the 
save  the  partnership  when  organized,  and  latter  may  recover  its  debt  or  dividend 
to  prevent  its  failure  or  insolvency.     If,  from    the    insolvent    or    bankrupt    firm. 


542 


THE    LAW    OP    PARTNERSHIP. 


[CH.    XVII. 


partners  have  become  general  partners  by  some  non-compliance 
with  the  requirements  of  law  ;  in  which  case,  they  may  be  joined  ; 
and,  if  the  plaintiff  seeks  to  hold  them  beyond  their  limited 
liability,  he  must  join  them,  (w)  As  the  statute  is  itself  excep- 
tional, it  must  not  be  enlarged  by  construction  ;  and  the  sjjecial 
partners  are  general  partners  in  ail  things,  excepting  those  as  to 
which    the    statute  expressly   limits  their   liability,  (o)  ^     If   the 


Where  one  general  partner  in  a  limited 
jjurtnership  made  an  assignment,  with  the 
consent  of  the  special  partner,  but  without 
the  consent  of  tiie  remaining  general  part- 
ner, the  assignment  was  set  aside.  Hayes 
V.  Heyer,  3  Sandf.  293  ;  White  v.  Hackett, 
24  Barb.  290.  It  was  held  that,  prior  to 
the  amendment  in  the  New  York  statutes 
(ch.  414  of  1857,  §  3),  when  a  special 
partnership  becomes  insolvent,  and  appli- 
cation is  made  by  creditors  for  an  injunc- 
tion and  receiver,  a  special  partner  is 
entitled  to  come  in  and  claim  as  a  creditor 
of  the  partnership,  and  to  receive  a  divi- 
dend, out  of  the  assets  thereof,  pro  rata 
with  the  other  creditors,  and  that  the 
amendment  in  the  statute  was  not  declara- 
tory of  the  law  as  it  previously  existed. 
But,  reversing  this,  it  was  held,  in  s.  c.  20 
N.  Y  178,  on  appeal,  that,  irrespective  of 
the  amendment  to  the  act  authorizing  the 
formation  of  limited  partnerships,  a  special 
partner  could  not,  in  case  of  the  firm's 
insolvency,  claim  to  share  in  the  distribu- 
tion of  its  assets  for  the  reimbursement  of 
loans  or  advances  made  by  him  over  and 
above  the  capital  he  contributed,  until 
after  all  others  were  satisfied  ;  and  that 
the  amendment  was  not  declaratory  of  the 
existing  law,  but  introduced  a  new  rule. 
See  Fanshawe  v.  Lane,  16  Abb.  Pr.  71  ; 
Van  Alstyne  v.  Cook,  25  N.  Y.  489;  Ward 
V.  Newell,  42  Barb.  482  ;  Singer  v.  Kelly, 
44  Pa.  145.  See,  as  to  the  effect  of  the 
attachment  of  the  interest  of  the  special 
partner,  Harris  v.  Murray,  28  N.  Y.  574. 
The  special  partner  cannot  claim  as  a 
creditor  of  an  insolvent  firm  of  which  he  is 
a  member.  Dunning's  Appeal,  44  Pa.  150. 
[Jaffe  V.  Krum,  88  Mo.  669.    See  Sherwood 


V.  His  Creditors,  42  La.  Ann.  103,  7  So. 
79  ;  Coffin's  Appeal,  106  Pa.  280.]  He 
may  in  Connecticut,  as  to  loans  imlepen- 
dent  of  his  special  capital  contributed, 
Capp  V.  Lacey,  35  C'onn.  463. 

(«)  The  Artisans'  Bank  v.  Treadwell, 
34  Barb.  553,  560  ;  Schulten  v.  Lord,  4 
E.  D.  Smith,  206  ;  [Sharp  v.  Hutchin- 
son, 100  N.  Y.  533,  3  N.  E.  500].  It  was 
held,  in  Louisiana,  that  the  fact  of 
there  having  existed  a  partnership  in  com- 
mcndam  between  the  parties  does  not 
prevent  the  plaintiff  from  recovering  of 
the  defendant  sums  of  money  paid  for  the 
use  of  the  latter,  and  which  were  not 
taken  from  or  connected  with  the  partner- 
ship. Battaille  v.  Battaille,  6  La.  Ann. 
682. 

(o)  Lachaise  v.  Marks,  4  E.  D.  Smith, 
610;  Hayes  v.  Bement,  3  Sandf.  397; 
[Sherwood  v.  His  Creditors,  42  La.  Ann. 
103,  7  So.  79  ;  Jaffe  v.  Krum,  88  Mo. 
669].  In  Hogg  v.  Ellis,  8  How.  Pr.  473, 
Mitchell,  J.,  says  :  "The  limited  partner  is 
a  ])artner  as  much  as  the  general  partner  ; 
and  there  is  nothing  to  prevent  him,  even 
during  the  continuance  of  the  partner- 
ship, from  taking  an  active  part  in  its 
concerns,  if  he  chooses  to  bring  on  him- 
self  the  statutory  consequences  of  a  liabil- 
ity as  a  general  partner.  The  statute  is 
for  his  protection,  if  he  will  conform  to  it ; 
it  is  not  any  i)art  of  its  policy  to  prevent 
him  from  acting  as  a  geneial  partner,  if  he 
is  willing  to  assume  the  liabilities  that 
follow  ;  and,  if  he  is  willing,  his  partners 
have  no  ground  of  complaint,  nor  the 
creditors  of  the  firm,  if  he  leave  their 
rights  unimpaired.  It  would  be  different 
if    the  general  partners  by  their    articles 


1  So  they  must  join  in  an  assignment  of  the  firm  property  for  benefit  of  creditors. 
In  re  Allen,  41  Minn.  430,  43  N.  W.  382.  And  the  location  and  nature  of  the  busi- 
ness cannot  be  changed  without  the  consent  of  the  special  partner.  First  Nat.  Bank 
V.  Clark,  (111.)  32  N.  E.  255.     But  a  special  partner  cannot  transact  firm  business,  or 


§  428.] 


OF    LIMITED   PARTNERSHIPS. 


543 


partnership  is  renewed  after  its  expiration  by  its  oi'itiiinal  limits, 
there  must  be  a  renewal  of  the  certificate,  publication  and 
record. (p)  ^ 

§  428.  Dissolution  and  Notice.  —  The  partnership  may  be  dis- 
solved by  its  own  limitation,  by  the  death  of  a  partner,  (5)  by 
decree  of  court,  by  bankruptcy  of  the  firm  or  of  a  partner,  in  the 


excluded  the  limited  partner  from  a  con- 
trol ;  but  then  this  restriction  might  cease 
at  the  expiration  of  the  partnership.  The 
statute,  as  to  the  special  partner,  is,  that 
'  if  he  shall  interfere,  contrary  to  these 
j)rovisions,  he  shall  be  deemed  a  general 
partner '  (I  R.  S.  766,  §  17),  and  that  is 
the  only  penalty." 

{p)  Andrews  v.  Schott,  10  Barr 
(Pcnn. ),  47,  53.  And,  if  this  is  not 
done,  the  partnership,  being  continued, 
becomes  a  general  one.  Lachaise  v.  Marks, 
4  E.  D.  Smith,  610,  620.  If  any  altera- 
tion be  made  in  the  capital  or  shares,  and 
the  partnership  be  in  any  manner 
thereafter  carried  on,  before  the  publi- 
cation of  the  notice  of  tlissolution  is 
coni[ileted,  where  the  limited  partnership 
is  dissolved  by  the  agreement  of  the  parties 
before  the  period  fixed  for  its  termination 
by  the  oiiginal  certificate,  the  special 
partner  becomes  liable  as  a  general  part- 
ner. Beers  v.  Reynolds,  12  Barb.  (S.  C), 
288,  and  s.  c.  on  appeal,  11  N.  Y.  97. 
See  La  Chomette  v.  Thomas,  5  Rob.  (La. ) 
172,  and  Gray  v.  Gibson,  6  Mich.  300,  as 
to  the  effect  of  not  recording  an  agree- 
ment for  the  formation  of  a  limited 
partnershij).  The  parties  designated  in 
articles  or  a  will  to  continue  a  partnership, 
or  to  be  interested  in  it,  after  a  death, 
should  be  obliged  to  renew  the  formalities 
of    the    statute,    if    they   would    remain 


special  partners,  with  the  fund  alone 
responsible  ;  and  if  they  continue  the 
business  without  this  form,  then  they 
become  general  partners,  liable  in  like 
manner  as  all  other  dormant  [)artners. 
Jacquin  v.   Buisson,   11  How.   Pr.  336. 

(q)  Tronbat  on  Lim.  Part.  §  430  (Phila. 
1853)  makes  a  distinction  as  to  the  death 
of  a  special  partner,  citing  Fierli,  &c. 
But  this  distinction  is  not  sustained  in  this 
country.  See  Ames  v.  Downing,  1  Brad. 
321  (which  esca])ed  Mr.  Troubat's  notice), 
citing  seveial  French  authorities.  And 
see  also  Jacquin  v.  Buisson,  11  How.  Pr. 
385,  395,  in  which  is  the  following  : 
"  Since  the  decision  of  this  motion,  I 
have  noticed  the  case  of  Ames  v.  Down- 
ing. The  Surrogate  of  New  York,  in  a 
very  able  and  learned  opinion,  has  arrived 
at  the  conclusion  herein  stated,  that  the 
death  of  a  special  partner  dissolves  the 
firm  ;  and  has  gone  over  much  of  the 
interesting  ground  of  the  French  law 
which  I  have  exjdored.  I  find,  also,  that, 
in  Pennsjivania,  there  is  an  express  pro- 
vision in  the  statute  on  the  siibject,  for 
the  continuance  of  the  capital  of  the 
special  partner  through  his  representa- 
tives, for  the  unexpired  term,  or  a  sale  of 
the  interest,  in  their  discretion.  Purdon's 
Digest  Laws,  Penn  544,  §  28."  See  ante, 
§  422,  note  (h). 


bind  the  finn  by  attempting  so  to  do.     Columbia  Land  &  Cattle  Co.  v.   Daly,  46  Kas. 
504,  26  Pac.  1042. 

1  It  has  been  held  that  when  a  limited  partnership  is  renewed,  the  new  certificate 
need  not  disclose  the  state  of  the  capital  at  the  time,  but  only  state  the  original  con- 
tribution. Arnold  v.  Danziger,  30  F.  R.  898  ;  Fifth  Ave.  Bank  r.  Colgate,  120  N. 
Y.  381,  24  N.  E.  799.  But  see  Haddock  v.  Grinnell  Mfg.  Co.,  109  Pa.  372,  1  Atl.  174. 
If  there  is  an  interval  between  the  expiration  of  the  partnership  and  its  renewal,  the 
partnership  would  seem  to  be  an  entirely  new  one,  and  toreipiire  the  same  sort  of  certi- 
ficate as  a  new  partnership ;  and  during  the  interval  between  expiration  and  renewal 
the  firm  would  be  a  general  one.  Haddock  v.  Grinnell  Mfg.  Co.,  109  Pa.  372,  1  Atl. 
174.  If  the  amount  of  capital  is  increased,  it  has  been  held  to  make  the  paitnership  a 
new  one.     Liueweaver  v.  Slagle,  64  Md.  465,  2  Atl.  693. 


5U 


THE    LAW    OF    PARTNERSHIP. 


[CH.    XVII. 


same  manner  as  a  general  partnership.  And  the  special  part- 
ners will  be  bound  after  a  dissolution,  unless  notice  is  given; 
excepting  where  the  dissolution  comes  by  limitation  of  time  (and 
then  the  certificate  is  notice),  or  by  an  act  of  the  law.  (r')^ 
Whether  dissolution,  by  death,  or  by  bankruptcy,  requires  notice, 
is  not  so  certain,  and  therefore  the  notice  would  be  expedient. 
If,  however,  after  a  dissolution  with  notice,  oi-  a  dissolution  by  the 
original  limitation  or  by  act  of  the  law  witliout  notice,  the  gen- 
eral partners  go  on  and  issue  notes  bearing  the  old  name,  without 
the  consent  or  permission,  actual  or  constructive,  of  the  special 
partners,  these  partners  are  not  liable  thereon,  even  to  innocent 
and  ignorant  holders,  for  value.  And,  even  if  the  special  })art- 
ners  had  made  themselves  liable,  the  holders  of  these  notes  cannot 
come  in  and  claim  against  the  joint  assets  equally  with  the  pre- 
vious creditors  of  the  firm,  (s)  If,  however,  the  special  partners 
have  made  themselves  liable  on  such  notes,  by  permitting  their 


()•)  Hiitjserty  v.  Taylor,  10  Paige,  261  ; 
Hogg  V  Ellis,  8  How.  Pr.  473,  per  Mit- 
chell, J.  :  "  The  partnership  was  a  limited 
one,  and  it  has  expired  by  its  own  limita- 
tion. In  ordinary  partnerships,  it  is  a 
matter  of  course,  on  a  bill  to  close  the 
concern,  after  the  dissolution,  to  appoint  a 
receiver ;  and  the  same  rule  prevails  if 
the  pi'oofs  show  that,  at  the  hearing  a  dis- 
solution will  be  granted,  although  the 
partnership  has  not  yet  expired."  In 
Beer.-  V.  Reynolds,  12  Barb.  291,  11  N.  Y. 
97,  King,  J.,  says  :  "The  statute  relative  to 
limited  partneiships  (2  R.  S.  3d  ed.  p.  52, 
§  24)  is  in  these  words:  'No  dissolu- 
tion of  such  partnership,  by  the  acts  of 
the  parties,  shall  take  ])lace  previous  to 
the  time  specified  in  the  certihcate  of  its 
formation,  or  in  the  certificate  of  its 
renewal,  until  a  notice  of  such  dissolution 
shall  have  been  tiled  and  recorded  in  the 
clerk's  office  in  which  the  original  certifi- 
cate was  recorded,  and  published,  once  in 
each  week  for  four  weeks,  in  a  newspaper 
printed  in  each  of  the  counties  where  the 
partnership  may  have  places  of  busines.s, 
and  in  the  State  paper.'  It  seems  to  me 
that  this  statute  will  admit  of  but  one 
construction,  —  that,  in  the  case  proposed, 
of  a   dissolution,  by   act   of   the   parties, 


before  the  expiration  of  the  term  for  which 
the  partnership  was  formed,  the  notice 
must  not  only  have  been  filed  and  recorded 
but  the  full  period  of  publication  must 
also  have  elapsed,  before  the  ])aitnership 
can  be  considered  to  be  dissolved  ;  that 
the  partnership  continues  until  the  notice 
has  been  published  for  four  weeks.  The 
notice  thus  prescrilied  is  similar  in  its 
nature  to  that  by  which  the  special  jjart- 
nership  may  be  created.  The  period  for 
which  the  j)artnershi|i  was  to  continue  has 
been  made  known  to  the  public  by  the 
filing  of  the  original  certificate  and  its 
publication  in  the  newspajiers.  The  notice 
thus  given,  the  statute  allows  the  pai'ties 
to  retract  by  another  notice  made  pulilic 
in  a  similar  manner ;  and,  until  the  pro- 
visions of  the  statute  respecting  this 
second  notice  have  been  complied  with, 
the  public  are  authorized  to  rely  upon  the 
terms  of  the  first  notice."  See  Marshall  v. 
Lambeth,  7  Rob.  (La.)  471  ;  Pmlkley  v. 
Marks,  15  Abb.  Pr.  454,  463  ;  Lachaise  v. 
Marks,  4  E.  D.  Smith,  610.  Where  a 
certificate  and  notice  of  dissolution  is 
required  by  statute,  it  mu.st  be  strictly 
complied  with.  Ee  Terry,  5  Biss.  110. 
(.s)  "Haggerty  v.  Taylor,  10  Paige,  261  ; 
Lachaise  v.  Marks,  4  E.  D.  Smith,  610. 


1   But  see  Tilge  v.  Brooks,  124  Pa.  178,  16  Atl.  746. 


429. 


OF    LIMITED    PARTNERSHIPS. 


545 


§  429.    Publication  of  Certificate.  —  Defects  ill  the  Certificate,  or 


issue  in  that  way,  the  remedy  of  the  holders  is  by  suit,  against  all 
the  partners,  to  charge  them  personally,  (i) 

§ 

pul)lication  or  record,  or  in  any  compliance  with  the  require- 
ments of  the  law,  do  not  vitiate,  if  these  defects  are  merely 
foi-mal,  and  such  as  cannot  injuriously  mislead  any  party.  But 
if  tliey  are  substantial,  —  that  is,  if  they  can  be  injurious,  —  they 
leave  all  the  partners  liable  as  general  partners,  although  none  of 
them  were  in  fault,  (u)  ^ 


{f.)  Hag<,n'rty  v.  Taylor,  10  Pain;e,  261  ; 
Scluilteii  V.  Lord,  4  E.  D.  Smith,  206, 
210.  In  Bradbury  v.  Smith,  21  Me.  117, 
where  a  partnersliip  was  formed  between 
A.  &  B.,  wherein  it  was  stipulated  that 
the  partnership  should  be  special,  that  B. 
should  be  the  special  partner,  and  should 
contribute  a  certain  sum  "as  cajiital  to 
the  common  stock  for  carrying  on  the 
business,"  whii'h  was  to  be  conducted  in  the 
name  of  A.  &  Co.  ;  and  the  sum  was  paid 
ill  and  invested  in  goods,  and  the  goods 
wei-e  sold,  and  other  goods  purchased  in 
their  place  with  the  proceeds  of  the  sales, 
—  it  was  held,  that  whether  the  partner- 
ship was  to  be  considered  as  a  special  one, 
under  the  statute,  or  as  a  general  one,  the 
goods  became  partnership  property  ;  the 
]>artiiership  becoming  debtor  to  the  part- 
ner advancing  the  capital,  to  the  amount 
advanced.  In  Louisiana,  the  court  held, 
that  a  partner  in  commcndam  is  respon- 
sible to  the  creditors  of  the  partnership  for 
the  amount  of  the  capital  he  was  bound  to 
contribute  ;  and,  where  his  portion  of  the 
capital  has  beezi  withdrawn,  the  creditors 
may  proceed  against  him  by  a  direct 
action.  La  Chomette  v.  Thomas,  1  La. 
Ann.  120.  Eustis,  C.  J.,  in  pronouncing 
the  judgment  of  the  court,  said  :  "  We 
have  recently  recognized  the  rights  of 
creditors  to  hold  partners  in  commcndam 
responsible  for  the  amount  of  the  capital 
which  they  were  bound  to  put  into  the 
partnership  of  which  they  were  members. 
Civil  Code,  art.  2813.  We  will  prevent 
the  creditors  from  obtaining  any  undue 
preference  over  each  other,  and,  in  all 
cases,  carry  into  effect  the  principle  of  law 
which    makes    the    commendam    fund    a 


common  pledge  for  tlie  creditors  of  the 
partnership;  but  we  will  permit- no 
obstacle  of  mere  form  to  prevent  the 
direct  recourse  of  the  creditor  against  the 
partner  in  commendam,  whenever  his 
obligation  to  contribute  to  the  partnership 
debts  is  made  out.  In  the  present  case 
the  partner  in  commendam  has  not  only 
withdrawn  his  capital  on  the  dissolution 
of  the  partnership,  but  his  share  of  the 
profits  ;  and  why  should  he  not  pay  his 
share  of  the  debts  ?  "  See  further,  as  to 
the  liability  of  the  special  ])artner,  Pierce 
V.  Bryant,  5  Allen,  91  ;  Marshall  v.  Lam- 
beth, 7  Rob.  (La.)  471  ;  De  Lizardi  v. 
Gosset,  1  La.  Ann.  138  ;  Beers  v.  Rey- 
nolds, 11  N.  Y.  97.  For  a  debt  owing  by 
all  the  partners,  general  and  special,  in  a 
limited  partnership,  a  suit  is  well  brought 
against  the  general  partners  alone.  And 
a  judgment  and  execution  in  such  suit, 
levied  upon  the  property  of  the  partner- 
ship, will  bind  the  entire  interest  of  all 
the  partners.  The  provision  of  the  statute, 
that  suits  in  relation  to  the  business  of  a 
limited  partnership  "  may  be  brought  and 
conducted  by  and  against  the  general 
partners,  in  the  same  manner,  as  if  there 
were  no  special  partners,"  must  be  con- 
strued to  mean,  not  only  that  they  may  be 
thus  brought  "in  the  same  manner,"  but 
"  with  the  same  effect."  The  Artisans' 
Bank  v.  Treadwell,  34  Barb.  553.  And, 
see  Bulkley  v.  Marks,  15  Abb.  Pr.  454, 
R.  c.  now.  Buckley  v.  Bramhall,  24  How. 
Pr.  455  ;  Robinson  v.  Mcintosh,  "3  E.  D. 
Smith,  221  ;  Hastings  v.  Hopkinson,  28 
Vt.  108,  117. 

(m)  Andrews  v.   Schott,  10   Barr,   47  ; 
Bowen  v.  Argall,  24  Wend.  496  ;  Smith  v. 


1  Failure  of  the  proper  official  to  record  the  certificate  does  not  make  tlie  special 
partners  liable  as  general  partners,  if  they  took  it  to  the  proper  officer  for  record. 

35 


546  THE   LAW    OF    PARTNERSHIP,  [CH.    XVII. 

Thus,  a  publication  that  the  partnership  would  begin  on  the 
16th  of  November,  when  it  actually  began  on  the  16th  of  October, 
was  held  not  to  bind  the  special  partners  as  general  partners. 
But  it  was  said  that  it  would  have  bound  them  if  the  error  had 
been  intentional,  or  if  the  debt  sued  had  been  contracted  before  the 
16th  of  November,  (y) 

So,  a  publication  of  the  certificate  was  held  to  have  been  made 
"  immediately  "  within  the  terms  of  the  statute,  when  it  was  made 
within  three  days  after  the  recording.  And  it  was  held  sufficient, 
if  made  once  in  each  of  the  succeeding  six  weeks,  (w) 

Where  real  estate  was  purchased  by  the  general  partners  for 
the  firm,  and  paid  for  by  the  firm,  the  circumstance  that  the  title 
to  the  land  was  taken  in  the  names  of  all  the  partners  did  not 
make  the  special  partners  liable  as  general  partners.  Stress  was 
laid  upon  the  fact  that  the  special  partners  did  not  know  that  the 
land  was  so  granted  to  them.  But,  if  they  did  know  this  and 
consent  to  it,  it  does  not  seem  clear,  on  general  principles,  why 
they  should  be  held  as  general  partners,  provided  they  had  com- 
plied in  all  things  with  the  requirements  of  the  law.  Perliaps 
they  should  be  so  held,  however,  to  the  vendors,  for  the  price  of 
the  land,  (a;) 

Argall,  6  Hill,  479,   3  Denio,  435  ;    La-  they  become  general  partners  till  the  cer- 

chaise  v.  Marks,  4  E.  D.  Smith,  610.     In  tificate  is  newly  recorded.     Eiper  v.  Pop- 

this  last  case,  where  the  certificate  of  the  penhausen,  43  N.  Y.  68. 
formation  of  a  limited  partnership  declared  {v)  The     Madison     County    Bank     v. 

"that  all  the  general  partners  interested  Gould,  5  Hill,  309.     And  see  Bradbury  v. 

therein  are  A.  and  B.,  both  of  Brooklyn,  Smith,  21  Me.  117. 

in  t!ie  State  of  New  York,  and  that  the  (w)  Bowen  v.  Argall,  24  Wend.    496. 

special  partner  interested  therein  is  C,  of  An  affidavit  to  accompany  a  certificate  of 

Jersey  City,  in  the  State  of  New  Jerse}',"  a  limited  partnership,  under  N.   Y.  Rev. 

—  it  was  held,  that  this  was  a  compliance  Sts.  (4th  ed.)  p.  174,  §  7,  need  not  follow 

with  the  statute  (2  N.  Y.  K.   S.  4th  ed.  the   exact  words   of   the   statute.      If    it 

p.  174,  §  4,  subd.  3),  requiring  the  certifi-  clearly  establishes  the  facts  required  by 

cate  to  contain  the  respective  places  of  resi-  the  statute,  it  is  sufficient.     Thus,  an  affi- 

dence  of  the  general  and  special  partners,  davit  that  the  special  partner  has  "  actually 

and  that  no   more  distinct   averment   of  paid  in  "  the  capital  contributed  by  him, 

their  being  residents  of  those  places  was  is  held  equivalent  to  an  affidavit  that  he 

necessary.     See  also  Bulkley  v.  Marks,  15  has  paid  it  "  in  cash."    Johnson  v.    Mc- 

Abb.  Pr.  454,  s.  C.  no7n.  Buckley  v.  Bram-  Donald,  2  Abb.  Pr.  290. 
hall,  24  How,  Pr.  455.     If  the  firm  moves  (x)    The     Madison     County    Bank     v. 

its  business  into  another  county  than  that  Gould,  5  Hill,  309. 
where  the  certificate  has  been   recorded, 

Manhattan  Co.  v.  Laimbeer,  108  N.  Y.  578,  15  N.  E.  712.  But  in  Henkel  v.  Hey- 
man,  91  111.  96,  where  the  certificate  was  left  a  sufficient  time  to  be  recorded  and  then 
taken  away  without  having  in  fact  been  recorded,  the  special  partner  was  held  liable 
as  general  partner  ;  and  it  was  said  that  the  special  partner  must  see  at  his  peril  that 
the  requirements  of  the  statute  were  carried  out. 


§  430.] 


OF   LIMITED    PARTNERSHIPS. 


547 


But  where  the  certificate  was  published  in  two  newspapers,  and 
in  one  of  them  tiie  sum  contributed  was  said  to  be  five  thousand 
dollars,  when  in  fact  it  was  but  two  thousand,  and  the  mistake 
was  made  by  tiie  printer,  it  was  held  that  the  special  partners 
were  liable  as  general  partners,  without  proof  that  the  creditors 
were  misled  by  the  mistake.  (?/) 

The  certificate,  being  duly  sworn  to,  acknowledged,  and  recorded, 
is  prima  facie  evidence  of  its  own  truth,  and  may  be  offered  as 
such  ;  but  has  no  force  to  rebut  positive  testimony  of  its  false- 
hood. Thus  the  certificate  cannot  contradict,  as  evidence,  tes- 
timony going  to  show  that  the  sum  actually  paid  in  was  less  than 
that  stated,  {z) 

§  430.  Purposes  for  w^hich  Limited  Partnerships  may  be  formed.  — 
In  some  of  the  States,  there  seems  to  be  no  restriction  as  to  the 
purposes  for  which  these  special  partnerships  may  be  formed.  In 
others,  certain  objects  or  kinds  of  business  are  enumerated,  which 
they  may  carry  on.  In  others,  some  are  excepted  ;  as  banking  and 
insurance.  In  many  of  the  States  in  which  limited  partnerships 
are  permitted,  banking  is  prohibited,  except  by  corporations 
expressly  authorized.  But  the  business  of  insurance  is  generally 
open ;  and  we  see  no  reason,  derivable  from  its  nature,  why  a 


(y)  Argall  v.  Smith,  in  the  Court  of 
Errors,  3  Denio,  435,  per  Spencer,  Senator: 
"  The  '  terms '  must  be  truly  published  in 
two  papers.  Not  to  publish  at  all  would 
be  clearly  fatal ;  and  it  would  be  equally 
so  to  publish  in  but  one  paper,  or  in  pa- 
pers in  any  other  senate  district.  That 
the  amount  of  the  capital  actually  jtaid  in 
by  the  special  partner  would  be  a  substan- 
tial and  material  portion  of  the  terras, 
cannot  be  doubted.  It  is  the  fouudation 
of  the  credit  to  be  cjlven.  The  duty  of 
making  such  publication  is  by  the  statute 
devolved  upon  the  partners  ;  and  it  is  one 
that  tbey  must  see  to  at  their  peril.  If 
they  (ail  in  this,  the  consequence  is  de- 
clared in  plain  terms :  '  the  partnership 
shall  be.  deemed  general.'  In  this  the 
courts  have  no  discretiou.  They  have 
only  to  declare  the  will  of  the  legislature. 
The  publication  of  different  '  t<^rms '  in 
two  papers,  in  one  of  which  they  are  un- 
truly stated,  can  be  no  better  than  to  omit 
a  publication  altogether."  See  the  same 
case  in  the  Supreme  Court,  nom.  Smith  v. 
Argall,  6  Hill,  479.  And  see  Bowen  v. 
Argall,  24  Wend,  496. 


(z)  The  Madison  County  Bank  v. 
Gould,  5  Hill,  309,  315.  It  has  been 
held,  in  Michigan,  that  an  agreement  for 
the  formation  of  a  limited  partnership, 
executed  under  the  laws  of  New  York, 
but  not  recorded  so  as  to  become  effectual 
for  the  purpose  designed,  has  no  tendency 
to  prove  an  actual  general  ])artuership  be- 
tween the  parties  named  in  it,  in  the  ab- 
sence of  extrinsic  evidence  to  show  that 
they  had  actually  entered  into  business  as 
partners.  Gray  v.  Gibson,  6  Mich.  300. 
A  special  partner  of  a  firm  in  one  State  is 
exempt  from  general  liability  on  account 
of  transactions  of  his  firrn  with  the  citi- 
zens of  another  State.  King  v.  Sarria,  7 
Hun,  167.  See  also  Barrows  v.  Downs,  9 
R.  I.  446.  Where  one  who  has  given 
credit  to  a  partnership  which  he  believes 
to  be  a  limited  partnership,  and  which  is 
known  to  the  public  as  such,  afterwards 
seeks  to  charge  all  the  partners  as  general 
partners,  the  burden  of  proof  to  show  a 
general  partnership  is  on  him.  Whilldin 
V.  Bullock,  4  W.  N.  G.  234. 


548  THE  LAW  OF  PARTNERSHIP.  [CH.  XVII. 

limited  partnership  might  not  engage  in  it.  In  this  country,  the 
whole  business  of  insurance  is  now  so  entirely  in  the  hands  of 
corporations, —  mutual,  or  stock  companies,  or  those  which  unite 
both  characters,  —  that  there  is  no  probability  of  its  being  done 
or  attempted  by  individuals  or  mere  partnerships,  (a) 

(a)  See  ante,  §  421,  note  [d). 


§  431.]  OF   JOINT-STOCK   COMPANIES.  649 


CHAPTER  XVIIL 

OF   JOINT-STOCK    COMPANIES. 

§  431.  Nature  and  Legality  of  Joint-stock  Companies.  —  In 
England,  where  incorporation  is  difficult  and  costly,  joint-stock 
companies  arc  very  common,  and  are  regulated  by  statute,  (a) 
In  this  country,  where  incorporation  is  in  fact,  though  not  in 
form,  almost  at  the  pleasure  of  the  parties,  and  limited  partner- 
ships protect  from  indefinite  loss,  joint-stock  companies  are  less 
frequently  found.  They  exist,  however,  in  many  of  our  States, 
and  have  given  rise  to  interesting  questions.^  In  general,  they 
are  copartnerships,  and  are  subject  to  the  whole  law  of  part- 
nership, (b)  They  are,  however,  partnerships  of  a  very  peculiar 
kind.^ 


(a)  The  Joint-Stock  Companies'  Acts  banking,  companies  which  are  mere  part- 
are,  7  Wm.  4  and  1  Vict.  ch.  73  ;  7  &  8  nerships,  as  to  everj'  person  except  their 
Vict.  ch.  110,  111;  Companies'  Clauses  own  stockholders  ;  they  never  having  been 
Consolidation  Act,  8  &  9  Vict.  ch.  16;  legally  incorporated.  Whatever  name  such 
Joint-Stock  Banks'  Acts,  7  Geo.  4,  ch.  46,  a  company  may  assume  and  use  in  the 
and  1  &  2  Vict.  ch.  96  ;  5  &  6  Vict.  ch.  transaction  of  its  business,  it  is  a  partner- 
85  ;  7  &  8  Vict.  ch.  113.  The  later  acts  ship,  and  not  a  corporate,  designation  ; 
are,  9  &  10  Vict.  ch.  28,  75  ;  10  &  11  Vict,  and  every  suit,  upon  a  contract  with  the 
ch.  78  ;  11  &  12  Vict.  ch.  45  ;  12  &  13  company,  must  be  brought  in  the  names 
Vict.  ch.  108  ;  17  &  18  Vict.  ch.  73  ;  18  of  the  several  persons  composing  the 
&  19  Vict.  ch.  133  ;  19  &  20  Vict.  ch.  3,  firm."  See  The  King  v.  Dodd,  9  East, 
47,  100  ;  20  &  21  Vict.  ch.  14,  49,  78  ;  21  516  ;  Holmes  v.  Higgins,  1  B.  &  C.  74  ; 
&  22  Vict.  ch.  60,  91.  Hess  v.  Werts,  4  S.  &  R.  356;   Carlen  v. 

(b)  In  Williams  v.  The  Bank  of  Mich-  Drury,  1  Ves.  &  B.  157  ;  Keesley  v.  Cadd, 
igan,  7  Wend.  542,  Walworth,  Ch.,  .says  :  cited  in  Perring  v.  Hone,  2  C.  &  P.  401  ; 
"It  is  well-known,  that  there  are  and  Vigers  v.  Sainet,  13  La.  300  ;  Walburn  v. 
have   been    many  joiut-stock,    and   even  Ingilby,  1   Mylne  &   K.   61  ;    Gorman  v. 

1  In  Pennsylvania  no  distinction  is  made  between  limited  partnerships  and  joint- 
stock  companies.  See  Briar  Hill  Coal  &  Iron  Co.  v.  Atlas  Works,  146  Pa.  290,  23 
Atl.  326. 

2  Joint-stock  companies,  though  authorized  by  statute,  are  partnerships,  not  cor- 
porations ;  there  is  no  intermediate  class.  Davison  v.  Holden,  55  Conn.  103,  10  Atl. 
515  ;  Ricker  v.  American  L.  &  T.  Co.,  140  Mass.  346,  5  N.  E.  284  ;  McFadden  . 
Leeka,  48  Oh.  St.  513,  28  N.  E.  874.  Therefore  it  is  not  an  artificial  citizen  of  the 
State  in  which  it  is  formed,  and  cannot  sue  as  such  in  the  United  States  courts.  Im- 
perial Refining  Co.  v.  Wyman,  38  F.  R.  574. 


650 


THE    LAW    OF    PARTNERSHIP. 


[CH.  XVIII. 


The  question  has  been  raised,  whether  they  were  not  illegal  on 
the  ground  that  they  usurp  the  privileges  of  corporations. (6*)  It 
never  came  to  a  decision ;  and  we  can  see  no  ground  for  raising 
such  a  question,  or  for  denying  to  copartners  the  power  of  regu- 
lating their  own  business,  form,  name,  and  rules  of  proceeding, 
at  their  own  pleasure.  C^)  ^ 

Sometimes,  in  our  joint-stock  companies,  all  the  property  is  in 
trustees,  who  alone  have  the  legal  title ;  and  the  copartners,  as 
shareholders,  under  an  indenture  which  declares  the  trust,  have 
the  equitable  or  beneficial  estate.  In  law,  this  might  make  some 
important  differences  ;  but  much  less  in  equity  (e) 


Russell,  18  Cal.  688  ;  Robbins  v.  Butler, 
24  111.  387  ;  Teniiey  i;.  The  N.  E.  Protect- 
ive Union,  37  Vt.  64.  Where  such  asso- 
ciations fail  to  become  legally  constituted 
joint-stock  companies,  from  some  infor- 
mality or  other,  they  constitute  partner- 
ships. Whipple  V.  Parker,  29  Mich.  370. 
They  are  partnerships,  except  as  otherwise 
jirovided  l)y  statute.  Moore  v.  Brink, 
6  Th.  &  C.  227 ;  Manning  v.  Gasharie,  27 
Ind.  399.  Stockholders  in  a  business  cor- 
poration, who,  after  expiration  of  their 
charter,  continue  business,  and  authorize 
contracts  to  be  made  in  the  name  of  the 
copartners,  are  partners.  National  Bank 
V  Landon,  45  N.  Y.  419.  As  to  when  the 
jiartnership  of  the  associates  in  a  joint- 
stock  company,  unincorporated,  begins, 
see  Hedge's  Appeal,  63  Pa.  273.  Mem- 
bers of  a  corporation,  to  whom  a  certifi- 
cate of  organization  has  been  duly  issued, 
are  not  responsible  as  ]iartners,  as  to  lia- 
bilities contracted  before  they  had  com- 
plied with  the  provision  ot  the  statutes. 
First  Nat.  Bank  v.  Almy,  119  Mass.  476. 
The  statutes  of  one  State  having  no 
extra-territorial  efficacy,  joint  stockholders 
in  that  State  become  partners  in  another. 
Taft  V.  Ward,  106  Mass.  518.  See  also 
Gott  V.  Dinsmore,  111  Mass.  45.  As  to 
what  facts  would  authorize  a  jury  to  find 
a  partnership  in  such  a  case,  see  Taft  v. 
Ward,  111  Mass.  518. 

•(c)  Story  on  Part.  §  164;  Collyer  on 
Part.  615-624,  1st  ed.  And  see  cases 
cited  in  the  following  note. 

{d)  In  England,  the  Stat.  6  Geo.  1,  ch. 


18,  enacted  the  year  after  the  infamous 
South  Sea  project  had  beggared  many  per- 
sons, made  it  highly  penal  for  subscribers 
to  public  undertakings  to  ' '  presume  to  act 
as  if  they  were  corporate  bodies,  by  mak- 
ing their  shares  in  stock  transferable," 
&c.,  4  Bl.  Com.  117  ;  Duvergier  v.  Fel- 
lows, 5  Bing.  248,  10  B.  &  C.  826  ; 
Josephs  V.  Pebrer,  3  B.  &  C.  639  ;  Blun- 
dell  V.  Winsor,  8  Sim.  601  ;  Garrard  v. 
Hardey,  5  M.  &  G.  471  ;  Harrison  v. 
Heathorn,  6  M.  &  G.  81.  The  Stat.  6 
Geo.  1,  ch.  18,  was  in  part  repealed  by  1 
Vict.  ch.  73.  The  Act  of  7  &  8  Vict.  ch. 
110,  came  into  force  on  the  first  of  Novem- 
ber, 1844.  A  railway  company  was  incor- 
porated by  an  act  before  that  date.  Sub- 
sequently thereto,  the  company  obtained 
an  act  for  an  extension  line  :  it  was  held 
that  the  latter  undertaking  was  not  a 
partnershij),  the  formation  of  which  was 
commenced  after  the  first  of  November, 
1844,  within  the  meaning  of  the  act. 
Shaw  V.  Holland,  15  M.  &  W.  136,  4 
Railw.  Cas.  150.  And  see  Baker  v.  Plas- 
kitt,  5  C.  B.  262. 

(e)  An  act  under  which  the  property 
of  a  manufacturing  company,  including 
its  right  to  call  assessments  and  the  liabil- 
ity of  stockholders  for  its  debts,  is  vested 
in  trustees  for  distribution  among  the 
creditors,  is  a  bar  to  a  suit  by  a  creditor 
against  a  stockholder,  under  an  act  mak- 
ing members  of  manufacturing  companies 
liable  for  their  debts.  Walker  v.  Grain, 
17  Barb.  119. 


1  A  joint-stock  company  has  been  held  legal  at  common  law.     Phillips  v.  Blatch- 
ford,  137  Mass.  510. 


§  432  ] 


OF    JOL\T-STOCK    COMPANIES. 


551 


§  432.  Characteristics  of  Joint-Stock  Companies.  —  Universally 
they  imitate,  mure  or  less,  the  form  and  appearance  of  corpora- 
tions. They  have  a  common  name,  whicli  is  usually  descriptive 
of  their  business,  like  that  of  a  corporation ;  and  does  not  con- 
tain or  consist  of  the  names  of  persons,  like  the  name  of  a 
firm.  (/)  They  have  their  officers,  their  by-laws,  (^)  and  their 
rules  of  proceeding :  and  by  these  they  regulate  the  election  of 
officers,  the  transaction  of  business,  the  transfer  of  shares,  and 
the  like;  and,  generally,  in  the  mode  of  transfer,  forms  are  used 
like  those  of  incorporated  companies,  —  as,  for  example,  certi- 
ficates (or  "  scrip  ")  are  issued,  transfers  are  recorded,  &g}  They 
do  not,  so  far  as  we  know,  attempt  to  use  a  common  seal,  and  cer- 
tainly have  no  power  to  do  this ;  that  is,  in  law,  they  have  no 
common  seal,  and  therefore  cannot  make  a  deed  of  any  kind,  {h) 


(/)  In  Ref,'iua  t'.  Registrar  of  Joint- 
stock  Companies,  10  Q.  B.  839,  Lord 
Denman  held,  that  a  joint-stock  company 
completely  registered  under  Stat.  7  &  8 
Vict.  ch.  110,  and  thereby  "  incori)orated," 
has  no  power  thereafter  to  change  its 
name.  He  said:  "The  identity  of  name 
is  the  principal  means  for  effecting  that 
perpetuity  of  succession,  with  members 
fre([ueutly  changing,  which  is  an  import- 
ant purpose  of  incorporation.  The  statute 
does  not  express  any  intention  of  changing 
this  general  principle,  but,  by  section  25, 
incorporates  the  company  by  the  name  set 
ftirth  in  the  deed,  and  declares  that  it 
shall  continue  so  incorporated  until  it  shall 
be  dissolved."  It  was  contended,  that  as 
partnerships  were  at  liberty  to  change  their 
style,  that  joint-stock  com[>anies  were  in 
the  nature  of  trading  partnerships  ;  and 
that,  as  there  was  no  express  prohibition 
in  the  statute,  they  might  continue  to  do 
so.  But  it  was  held,  that,  when  the  com- 
pany became  incorporated,  its  power  to 
change  its  name  ceased.  See  2  Bac.  Abr. 
tit.  "Corporations"  (C),  1,  7th  ed.  A 
joint-stock  company  has  no  right,  between 
the  time  of  provisional  and  complete  re- 
gistration, to  change  its  name  ;  nor  has  a 
provisionally  registered  company  a  right 
to  assume  the  name  of  a  corporation. 
Regina  v.  Whitmarsh,  19  L.  J.  Q.  B. 
185. 


{'j)  For  the  power  of  companies  to 
make  by-laws,  and  the  limitations  on  this 
power,  see  Calder  and  Hebble  Nav.  Co.  v. 
Pilling,  14  M.  &  W.  209  ;  Chilton  v.  Lon- 
don and  Croyden  R.  Co.,  16  M.  &  W. 
212;  Child  v.  Hudson's  Bay  Co.,  2  P. 
Wms.  309  ;  Smith  v.  Goldsworthy,  4 
Q.  B.  430  ;  Ward  v.  Society  of  Attorneys, 
1  Collyer,  379. 

(h)  Gow  on  Part.  3.  In  England,  it 
has  been  held,  that,  notwithstanding  their 
statutes,  joint-stock  companies  completely 
registered  are  bound  by  contracts  made  by 
a  competent  board  of  directors,  though 
not  under  seal,  or  made  in  compliance 
with  the  statute,  and  though  they  cannot 
enforce  such  contracts.  But  persons  seek- 
ing to  render  those  companies  liable  on 
contracts  made  with  the  directors,  must 
show  their  authority  to  bind  the  company, 
either  by  the  provision  of  the  registered 
deed  of  settlement,  or  by  proof  that  the 
body  of  shareholders  authorized  particular 
individuals  to  make  contracts  binding  on 
the  company.  A  ratification  by  a  com- 
petent board  of  directors  will  bind  the 
company.  Ridley  v.  Plymouth,  &c. 
Grinding  and  Baking  Co.,  2  Exch.  711; 
Forrester  v.  Bell,  10  Irish  L.  555.  See 
Smith  V.  The  Hull  Glass  Co.,  19  L.  J.,  C. 
P.  123. 


1  Where  a  body  having  these  characteristics  is  formed  it  is  a  joint-stock  company, 
though  no  reference  is  made  in  the  articles  to  the  statute  authorizing  such  a  company. 
People  V.  Wemple,  117  N.  Y.  136,  22  N.  E.  1046. 


552  THE   LAW   OF   PARTNERSHIP.  [CH.    XVIII. 

§  433.  EfiFect  of  Agreements  and  Rules.  —  We  repeat,  that  we 
see  no  reason  why  thoy  may  not  legally  and  innocently  do  all  the 
things  they  usually  undertake  to  do;  nor  why  the  courts,  of  law 
and  of  equity,  must  not  apply  to  them  the  common  principles, 
which,  in  the  first  place,  permit  all  partners  to  agree  upon  what 
terms  of  partnership  they  will ;  and,  in  the  second  place,  hold 
these  terms  to  be  binding  upon  all  who  agree  to  them,  expressly 
or  impliedly  ;  and,  in  the  third  place,  hold  them  to  be  binding 
upon  no  other  ])ersons.  (0  It  may  be  said,  however,  that  the 
rule  already  repeatedly  mentioned  —  that  special  agreements 
between  partners  affect  third  parties  to  whom  they  are  known, 
and  who  deal  with  the  partnership  with  that  knowledge  —  would 
apply  to  joint-stock  partnerships. 

It  seems  to  be  intimated  in  England,  that  a  partner  in  a  joint- 
stock  company,  which  had  formed  certain  rules,  would  not  in  any 
case  be  liable,  beyond  them,  to  a  third  party  who  had  traded  with 
the  company  with  a  knowledge  of  these  rules.  Tliis  impression 
(for  it  can  hardly  be  called  more)  seems  to  be  derived,  in  some 
measure,  from  the  statutory  existence  and  regulation  of  joint- 
stock  companies  in  England,  (j/')  In  this  country,  we  know 
neither  reason  nor  authority  for  qualifying,  in  reference  to  these 
companies,  the  general  principles  of  partnership  on  this  point. 
That  is,  we  do  not  believe  that  a  joint-stock  company,  or  any 
other  partnership,  can  limit  its  own  liabilities,  and  become  a  cor- 
poration or  limited  partnership  by  its  own  act,  and  without  any 
regard  to  the  formalities  or  requirements  of  the  law ;  but  we  see 
no  reason  why  a  joint-stock  company  may  not  go  as  far  as  a  common 
partnership  in  this  direction,  (k^ 

(i)  See  Hess  v.  Werts,  4  S.  &  R.  361  ;  tlie  articles  of  association,  Duncan,  J.,  ob- 

Skinner  ?.'.  Dayton,  19  Johns.  537  ;  Blun-  served  :  "Nor  would  I  have  any  difficulty 

dell  i:  AVinsor,  8  Sim.  601  ;  Walhurn   v.  were  the  articles  of  association  more  ex- 

Ingilby,  1  Mylne  &  K.  61,  76  ;  In  re  Sea,  plicit  than  they  are,  and  excluded  from 

F.  &  L.  Ass.  Soc,  5  De  G.  M.  &  G.  465,  responsibility  the    associators,   other  than 

In  re  Worcester  Corn  Ex.   Co.,   3   De  G.  out  of  their  joint  funds  ;  for  though  they 

M.  &  G.  180;  Hallett  V.  Dowdall,  18  Q.  B.  might,   as   between   themselves,    stipulate 

2  ;  Penn.Ins.  Co.  v.  Murphy,  5  Minn.  56  ;  with  each  other  for  this  contracted  respon- 

Henry  v.  Jackson,  37  Vt.  431.  sibility,  yet  as  to  the  rest  of  the  world,  it 

(,/)  Blundell  v.  Winsor,  8  Sim.  601;  is  clear  that  each  partner  is  liable  to  the 

Walburn  v.  Ingilby,  1  Mylne  &  K.  51,  76.  whole  amount  of  the  debts  contracted.  For 

(k)  In  Hess  v.   Werts,   4  S.  &  R.  366,  partners  in  a  stock  divided   into  shares, 

which  is  a  highly  instructive  case  on  this  and    transferable    ( but    who   are   not    in- 

question,  where  an  association  gave  notes  corporated),   are   responsible    beyond    the 

promising  to  pay  certain  amounts  out  of  amount  of  the  shares  to  which  they  sub- 

their  joint  funds,  it  was  held,  that  all  the  scribe,  though  it  is  one  of  the  terms  of  the 

shareholders  were  personally  liable.    After  association  they  shall  not   be."      In  the 

considering   the  special   facts  relating   to  same    case,   Gibson,    J.,    said  :    "By  tlie 


§  434.] 


OF   JOINT-STOCK    COMPANIES. 


553 


§  434,  Position  of  a  Member.  —  Excepting  SO  far  as  the  liability 
of  a  partner  in  one  of  tliese  companies  is  so  qualified,  he  is  — 
although  he  may  call  himself  not  a  partner,  but  a  stockholder  — 
liable  precisely  as  a  partner.  (/)  ^ 


terms  of  their  notes,  the  defendants  en- 
gaged to  pay  "out  of  their  joint  funds, 
according  to  their  articles  of  association,' 
and  it  is  made  part  of  the  case  that  they 
have  no  joint  funds.  Shall  they  be  com- 
pelled to  pay  out  of  their  separate  estates  ? 
It  is  a  general  principle,  that  partners  are 
liable  to  third  persons  as  for  a  personal 
debt.  It  is  not  merely  the  stock  they 
bring  into  the  partnership  that  is  hazarded; 
but  they  are  responsible  to  the  extent  of 
their  individual  fortunes  ;  and  such  re- 
sponsibility cannot  be  limited  by  any 
proviso  in  the  articles  of  partnership,  or 
agreement  between  themselves.  But  I  see 
no  reason  to  doubt  but  they  may  limit  their 
responsibility  by  an  explicit  stipulation 
made  with  the  party  with  whom  they  con- 
tract, and  clearly  understood  by  him  at  the 
time."  King  i'.  Dodd,  9  East,  527.  And 
see  Skinner  v.  Dayton,  19  Johns.  537.  The 
directors  of  a  joint-stock  company,  unless 
restrained  by  act  of  Parliament  or  the  deed 
of  settlement,  would  seem  to  have  all  the 
authority  given  to  partners  at  common  law; 
and,  therefore,  where  parties  contract  with 
the  directors  in  matters  relating  to  the  co- 
partnership business,  they  are  not  bound, 
when  seeking  to  enforce  such  contracts,  to 
show  that  the  directors  were  authorized  by 
the  deed  or  bj'-laws  to  enter  into  them. 
Smith  V.  The  Hull  Glass  Co.,  19  L.  J.,  C. 
P.  123.  See  Thompson  v.  Wesleyan  News- 
paper Association,  19  L.  J.,  C.  P.  114  ; 
Tyrrell  i'.  Washburn,   6  Allen,  466. 

(I)  See  ante,  §  431,  note  (h)  ;  Pipe  v. 
Bateman,  1  Iowa,  369  ;  Babb  v.  Read,  5 
Rawle,  151  ;  Attorney-General  v.  Heelis, 
2  Sim.  &  St.  67  ;  McGill  v.  Brown,  Bald- 
win, C.  C,  66  ;  Thomas  v.  Elmaker,  1  Pars. 
Cas.  108  ;  Lloyd  v.  Loaring,  6  Ves.  773  ; 


Cullen  I'.  The  Duke  of  Queensbury,  1  Bro. 
Ch.  Cas.  103  ;  Pearce  v.  Piper,  17  Ves.  1  ; 
Cock  burn  v.  Thompson,  16  Ves.  321  ; 
Beaumont  v.  Meredith,  2  Ves.  &  B.  180  ; 
Keasley  v.  Codd,  2  C.  &  P.  408,  note  ; 
Carlen  v.  Drury,  1  Ves.  &  B.  154,  157  ; 
Tappan  v.  Bailey,  4  Met.  535.  But  see, 
for  a  limitation  on  the  law  of  partnership, 
as  ai)plied  to  joint-stock  companies.  Cox  v. 
Bodfish,  35  Me.  302;  Livingston  v.  Lynch, 
4  Johns.  Ch.  573;  Irvine  v.  Forbes,  11 
Barb.  588.  Where,  by  an  act  of  Parlia- 
ment, a  company  was  to  apply  the  fir.st 
moneys  received  under  the  act  in  discharge 
of  the  expenses  incurred  in  obtaining  the 
act,  it  was  held,  that  the  plaintitt',  though 
a  member  of  the  company,  might  sue  them 
for  his  time  and  trouble  and  money  ex- 
pended in  obtaining  the  act.  Garden  v. 
The  General  Cemetery  Co.,  5  Bing.  N.  C. 
253.  See  Tilson  v.  Warwick  Gas  Light 
Co.,  4  B.  &  C.  962.  A  member  of  a  joint- 
stock  company,  like  a  member  of  an 
ordinary  partnership,  may  recover  com- 
pensation for  service  rendered  to  the  com- 
pany previous  to  his  having  become  a 
member  of  it.  Lucas  v.  Beach,  1  M.  &  G. 
417.  In  general,  however,  an  action  cannot 
be  maintained  by  a  member  against  the 
compan}',  or  by  the  company  against  a 
member,  on  a  contract  between  him  and 
the  company.  Neale  v.  Turton,  4  Bing. 
149  ;  Wilson  v.  Curzon,  15  M.  &  W.  532  ; 
Holmes  v.  Higgins,  1  B.  &  C.  74  ;  God- 
dard  V.  Hodges,  1  Cr.  &  M.  33,  3  Tyrw. 
209  ;  Teague  v.  Hubbard,  1  JVIan.  &  R. 
369,  8  B.  &  C,  345  ;  Chadwick  v.  Clarke, 
1  C.  B.  700  ;  Moneypenuy  v.  Hartland,  1 
C.  &  P.  352,  2  C'  &  P.  378  ;  Parkin  v. 
Fry,  2  C.  &  P.  311  ;  Milburn  v.  Codd,  1 
Man.  &  R.  238,  7  B.  &  C.  419  ;    Perring 


^  Xo  member  of  a  joint-stock  company  has  such  power  as  a  general  partner.  All 
business  must  be  done  or  authorized  by  vote  of  the  board  of  directors.  Pittsburg 
Melting  Co.  v.  Reese,  118  Pa.  355,  12  AtL  362.  The  business  cannot  be  altered  or 
extended  without  the  consent  of  all  the  members  ;  though  in  ordinary  affairs  of  business 
a  majoritv  of  the  directors  may  bind  the  company.  McFadden  v.  Leeka,  48  Oh.  St. 
513,  28  N.  E.  874. 


654 


THE    LAW   OF    PARTNERSHIP. 


[CH.    XVIII. 


§  435.  Transfer  of  Membership.  —  There  18  one  difference  which 
we  incline  to  think  the  law  would  make  between  a  common  part- 
nership and  a  joint-stock  company.  It  is  as  to  dissolution  by 
change.  We  have  already  remarked  that  it  is  very  possible,  that, 
where  a  stockholder  sold  and  transferred  his  share  or  interest  in 
all  respects  as  the  rules  required,  giving  up  his  certificate,  and  a 
new  one  was  made  to  his  transferee,  the  law  would  hold  that  this 
change  operated  no  dissolution,  but  that  the  new  partner  or  stock- 
holder came  into  the  place  of  the  old  one,  and  the  partnership  or 
company  went  on.  (m)  And  the  same  thing  might  occur  in  a 
case  of  a  change  by  death.  We  should  say,  however,  with  much 
confidence,  that  the  company  were  still  a  partnership,  and  like  a 
partnership  in  the  following  respects  :  — 

First.  Any  stockholder  might  transfer  his  interest  in  any  way 
which  would  operate  a  transfer  at  common  law,  and  pay  no 
regard  to  the  rules  of  the  company,  and  yet  give  good  title  to 
the  transferee,  so  far  as  the  property  was  concerned,  (n) 


V.  Hare,  4  Bing.  28.  But  see  Davies  v. 
Hawkins,  3  M,  &  S.  488.  [It  has  been 
held  that  a  member  of  a  joint-stock 
company  may  bring  suit  against  it  on 
a  note,  not  being  given  for  dividends. 
MacGeorge  v.  Harrison  Chemical  Mfg.  Co., 
141  Pa.  575,  21  Atl.  671.]  The  stock- 
holders of  a  banking  association  doing 
business  under  ordinary  copartnership  arti- 
cles are  not  dormant  partners,  although 
only  tlie  name  of  the  bank  is  disclosed  to 
the  public.  They  are  responsible  till  notice 
of  retirement  ;  and  a  new  stockholder  is 
not  liable  for  debts  contracted  before  he 
became  a  member  of  the  firm.  Shamburg 
V.  Ruggles,  83  Pa.  148. 

(m)  Adams'  Eq.  (3d  Am.  ed.)  544  ; 
Young  V.  Keighly,  15  Ves.  577  ;  Duver- 
gier  I'.  Fellows,  5  Bing.  248  ;  Blundell  v. 
Winsor,  8  Sim.  605;  Harrison  v.  Heathorn, 
6  Scott  N.  R.  735,  12  L.  J.  C.  P.  282  ; 
Pinkett  v.  Wright,  2  Hare,  120,  130.  If 
several  persons  subscribe  an  agreement, 
inter  se,  to  promote  a  joint  undertaking, 
one  of  them  cannot  withdraw  his  name, 
and  discliarge  liimself  from  the  engage- 
ment, without  the  consent  of  the  rest.  And 
if  an  act  of  Parliament  pass  for  effectuat- 
ing the  purjiose  of  the  undertaking,  by 
which  certain  obligations  are  created,  such 
original  subscriber  is  not  exonerated  from 
the  liabilities  imposed  by  the  act,  by 
having,   during  the  progress  of  the  bill, 


renounced  before  the  committee  all  further 
connection  with  the  undertaking,  and  de- 
sired that  his  name  might  be,  in  conse- 
quence, omitted  in  the  act  ;  nor  can  the 
circumstance  of  his  name  being  so  omitted 
have  the  effect  of  disengaging  him.  Kid- 
welly Canal  Co.  v.  Raby,  2  Price,  93.  See 
Scott  V.  Berkeley,  3  C.  B.  925  ;  Stimson 
V.  Lewis,  36  Vt.  91. 

(n)  See  Pratt  v.  Hutchinson,  15  East, 
511  ;  Rex  v.  Webb,  14  East,  406  ;  Josephs 
V.  Pebrer,  3  B.  &  C.  639  ;  Fox  v.  Clifton, 
9  Bing.  115,  6  Bing.  776.  Where  a  com- 
pany was  formed,  by  act  of  Parliament,  for 
the  purchase  of  lands  to  make  &  canal, 
and  the  act  declared  that  the  shares  shall 
be  deemed  personal  estate,  and  shall  be 
transmissible  as  such,  "  it  was  held,  that, 
though  the  profits  arose  out  of  the  land, 
the  shares  were  personal  property,  passing, 
as  such,  to  the  assignees  on  the  bankruptcy 
of  a  proprietor."  Ex  pari'-  Lancaster  Canal 
Co.,  1  Deac.  &  Ch.  411,  Mont.  116.  See 
Bradley  v.  Holdsworth,  3  M.  &  W.  422  ; 
Bligh  V.  Brent,  2  Y.  &  C.  268.  Where 
an  act  prescribes  certain  forms  in  the 
transfer  of  shares,  unless  they  are  strictly 
complied  with  the  shares  remain  in  the 
order  and  disposition  of  the  proprietor  ; 
the  ordinary  mode  of  transferring  not  con- 
stituting an  equitable  mortgage.  Ex  parte 
Lancaster  Canal  Co.,  ante. 


§  435.]  OF   JOINT-STOCK    COMPANIES.  555 

Secondly.  That  this  transferee  would  neither  be  a  partner  by 
such  irregular  transfer,  nor  have  any  claim  against  the  company 
to  be  a  partner,  {o) 

Thirdly.  This  transferee,  or  an  execution  creditor  of  a  copart- 
ner, member,  or  stockholder,  might  require  an  account  and  set- 
tlement, so  far  as  to  ascertain  his  rights  and  the  value  of  his 
share ;  but  would  have  no  right  to  any  particular  thing  in 
specie,  nor  to  a  division  of  the  effects ;  and  a  court  of  equity 
would  probably  deny  him  a  sale  of  the  whole,  if  a  fair  equivalent 
for  his  ascertained  share  were  offered  him  in  money,  (p) 

Fourthly.  If  a  stockholder  transferred  his  share  agreeably  to 
all  the  rules  of  the  company,  the  company  might,  nevertheless, 
with  or  without  reason,  refuse  to  acce])t  the  transferee  as  a  part- 
ner, and  withhold  his  certificate.  That  is,  they  might  do  so,  so 
far  as  to  prevent  his  becoming  a  copartner ;  for  we  should  say 
that  the  company  was  still  so  far  a  partnership  and  not  a  corpora- 
tion, that  without  the  assent  of  the  members  no  person  could 
become  a  partner.  If  the  new  certificate  were  issued,  and  no 
objection  made,  their  assent  would  be  implied  ;  but,  if  it  were 
expressly  withheld,  we  should  say  the  transferee  did  not  become 
a  partner.  He  was  still  a  transferee  of  the  property,  and  this  he 
might  realize  without  joining  the  company.  So,  too,  if  the  com- 
pany were  willing  to  receive  him,  and  the  transferee  were  not 
willing  to  join  them,  we  should  say  he  was  no  partner,  although 
he  held  the  transferred  interest,  (q) 

It  would  always  be  possible  that  the  articles  of  agreement 
might  be  such  as  to  give  to  the  transferrer,  or  possibly  to  the 
transferee,  a  suit  at  law  for  damages,  or  at  equity  for  perform- 

(o)  Bray  v.  Fromont,  6  Madd.  5  ;  Jef-  lities  as  attached  to  his  assignor.     James 

ferys  v.  Smith,  3  Riiss.  158  ;  Kingman  v.  v.  Woodruff,  2  Denio,  574.    And  see  Weald 

Spurr,  7  Pick.  235,  238  ;  Gilmore  v.  Black,  of  Kent  Canal  Co.  v.   Robinson,   5  Taunt. 

11  Me.  488;  Putnam  v.  Wise,  1  Hill,  234;  801  ;  Blount  v.    Hipkins,   7  Sim.  51.     As 

Murray  v.    Bogart,    14  Johns.   318;  Mar-  to  the  power  of  a  bond  creditor  of  a  com- 

quand  v.  New  York  Manuf.  Co.,  17  Johns,  pany  to  inspect  their  books,  see  Pontet  v. 

535  ;  Griswold  v.  Waddington,  15  Johns.  Basingstoke  Canal  Co.,  2  Scott,  543  ;  Hill 

82  ;  Moddewell  v.  Keever,  8  W.  &  S.  63.  v.   Manchester  and  Salford  Water  Works 

See   Hare   v.   Waring,    3  M.   &  W.    362  ;  Co.,  5  B.  &  Ad.  866  ;    Clarke  v.   The  Ini- 

Harper  v.   Raymond,  3  Bosw.  29,  7  Abb.  perial  Gas  Co.,  7  Bing.  95,  4  B.  &  Ad.  315. 

Pr.   142;    Pratt  2».   Hutchinson,    15   East,  (q)  See  Jefferys  y.  Smith,  3  Russ.  158  ; 

511.  Harper  v.  Raymond,  3  Bosw.  29  ;  Tatam 

(p)  Kingman  v.  Spurr,  7  Pick.  235  ;  v.  Williams,  3  Hare,  347;  Nicoll  v.  Mum- 
Mason  V.  McConnell,  1  Whart.  381  ;  Put-  ford,  4  Johns.  Ch.  522  ;  Rodriguez  v. 
nam  v.  Wise,  1  Hill,  234.  See  Burnes  v.  Heffernan,  5  Johns.  Ch.  417  ;  Marquand 
Pennell,  2  H.  L.  Cas.  497.  The  assignee  v.  Tho  New  York  Manuf.  Co.  17  Johns, 
of  a  stockholder  in  an  insolvent  corpora-  525. 
tion  succeeds  to  the  same  rights  aud  liabi- 


556  THE   LAW   OF   PARTNERSHIP.  [CH.    XVIII. 

ance,  if  the  company  refused  to  receive  him.  But  still  their 
refusal  would  prevent  Jiis  being  a  partner.  So,  too,  the  articles 
might  be  such  as  greatly  to  qualify  the  transferee's  right  to  hold 
or  realize  the  interest  consigned  to  him,  if  he  refused  to  become 
a  stockholder.  But  still  he  would  not  become  one,  by  the  mere 
transfer,  without  consent  on  his  part.  Possibly  the  rules  might 
be  such,  that  accepting  the  transfer  accepted  the  partnership; 
but,  even  then,  an  execution  creditor  of  the  partner,  or  one 
buying  the  share  on  a  sale  by  the  officer,  would  take  the  inter- 
est, we  think,  and  not  be  a  partner  without  his  own  consent  and' 
act.  (r) 

§  436.  Partnerships  analogous  to  Joint-stock  Companies.  —  In 
some  parts  of  this  country,  there  are  partnerships  which,  without 
being  strictly  joint-stock  companies,  are  more  like  them  in  their 
articles  and  regulations  and  manner  of  conducting  business  than 
common  mercantile  copartnerships ;  as,  for  example,  the  mining 
partnerships  of  California,  (^rr^ 

{)■)  1  Pars,  on  Con.  (5th  ed.)  144;  Pratt  partnerships,  when  there  are  no  partner- 

V.  Hutchinson,  15  East,  511;  Rex  u.  Webb,  ship  articles,  are  subject  to  the  ordinary 

14  East,  406  ;    Josephs  v.   Pebrer,  3  B.  &  law  of  partnership,  except  so  far  as  general 

C.  639  ;    Fox  v.  Clifton,    9   Ring.   115,   6  usages  of  persons  engaged  in  similar  i)ur- 

Bincf.    776;    Young  i'.    Keighly,    15   Ves.  suits,  or  the  known  practice  of  the  particular 

557  ;  Duvergier  v.  Fellows,  5  Bing.  248  ;  company,  has  established  a  different  rule ; 
Blundell  v.  Winsor,  8  Sim.  601  ;  Harrison  the  only  ditferences  generally  existing  being 
V.  Heathom,  6  Scott  N.  R.  725,  12  L.  J.  such  as  flow  from  the  fact  that  in  such 
C.  P.  282  ;  Pinkett  v.  Wright,  2  Hare,  120,  partnerships  there  is  no  delectus  pcrsonce. 
130;  Mathewson  w.  Clarke,  6  How.  122.  Jones  v.   Clark,   42  Cal.    180;    Taylor  v. 

{rf)  A  leading  case  on  this  subject  is  Castle,  42  Cal.  367.  See  also,  McCouuell 
Settembre  v.  Putnam,  30  Cal.  490.     Such    v.  Denvers,  35  Cal,  365. 


§  438.J  BUSINESS   COMBINATIONS   AND   "  TRUSTS."  557 


CHAPTER   XIX. 

BUSINESS   COMBINATIONS    AND   "TRUSTS." 

§  437.  Business  Associations  other  than  Partnerships.  —  Having 
completed  the  study  of  partnerships,  properly  so  called,  we  may 
now  find  it  useful  to  study  a  new  sort  of  association  of  capital  and 
skill  which  has  recently  come  into  prominence.  There  may  well 
be  such  associations  which  are  not  partnerships.  As  was  said  by 
Brett,  L.  J.,  in  Smith  v.  Anderson  :i  "  I  confess  I  have  some  diffi- 
culty in  seeing  how  there  could  be  an  association  for  the  purpose 
of  carrying  on  a  business  which  would  be  neither  a  company  nor 
a  partnership ;  but  1  should  hesitate  to  say  that,  by  the  ingenuity 
of  men  of  business,  there  might  not  some  day  be  formed  a  relation 
among  twenty  persons  which,  without  being  strictly  either  a  com- 
pany or  a  partnership,  might  yet  be  an  association." 

The  last  few  years  have  been  years  of  experiment  as  well  in  the 
domain  of  trade  as  in  that  of  science.  New  forms  of  combination 
for  the  purposes  of  trade  and  commerce  have  been  invented  and 
tried,  and  many  of  them  already  discarded  as  useless.  Meanwhile 
a  few  of  these  novel  instruments  of  trade  have  attained  permanent 
importance,  and  are  well  worth  more  or  less  careful  study. 

The  most  important  and  recent  of  these  associations  is  known 
as  the  "  trust."  It  will  be  best  to  examine  at  some  length  the 
different  sorts  of  combination,  varieties  of  the  "  trust,"  by  means 
of  which  the  trading  trust  has  been  gradually  evolved. 

§  438.  Functions  of  a  Trust.  —  What  may  be  called  the  legiti- 
mate functions  of  a  trust,  in  the  modern  commercial  sense,  are 
three.  In  the  first  place,  a  trust,  like  a  corporation  or  a  joint-stock 
association,  secures  the  collection  of  a  large  amount  of  capital  into 
the  control  of  a  single  body,  and  thus  enables  that  body  to  secure 
all  the  advantages  of  large  wholesale  dealings  with  a  small  pro- 
portional cost  of  management.  In  the  second  place,  like  a  corpo- 
ration, it  secures  (or  is  believed  to  secure)  personal  immunity  from 
liability  for  the  individual  contributors.  In  the  third  place,  it 
permanently  secures  the  services  about  the  business  of  the  ablest 
men  in  that  line  of  business. 

1  15  Ch.  D.  247,  277. 


558  THE   LAW   OP   PARTNERSHIP.  [CH.    XIX. 

§  439.  Corporate  Trusts.  —  The  earliest  sort  of  combination 
which  was  to  result  in  the  trust  seems  to  have  taken  the  form 
of  a  corporation.  Perhaps  the  latest  conspicuous  example  of  this 
sort  was  "  The  Cr(idit  Mobilier  of  America,"  a  corporation  bv 
means  of  which  much  of  the  Union  Pacific  Railroad  was  built. ^ 
The  capitalists  who  furnished  the  lunds  for  building  the  road  did 
so  through  this  corporation,  to  which  was  transferred  the  contract 
for  building  the  road.  The  corporation,  however,  acted  as  a  mere 
trustee,  the  work  not  apparently  being  done  under  its  direction. 
The  object  of  this  arrangement  was  clearly  to  secure  for  the  capi- 
talists  the  profits  of  the  contract  without  subjecting  them  to  any 
liability. 

§  440.  Trusts  for  Investment.  —  Of  a  somewliat  similar  nature, 
though  without  the  intervention  of  a  corporation,  was  a  sort  of 
trust  soon  after  invented  in  order  to  secure  a  large  capital  for 
investment  in  commercial  securities.  The  money  contributed  was 
put  into  the  hands  of  trustees  who  (under  the  direction  of  the 
contributors)  bought  and  held  certain  stocks  and  bonds.  Certifi- 
cates were  issued  to  the  contributors  for  the  amount  of  their 
respective  contributions,  and  after  principal  and  interest  had  been 
repaid  from  the  income  or  sale  of  the  stocks  and  bonds,  the  profits, 
if  any,  were  divided  among  the  certificate  holders.  The  word 
"  trust,"  in  the  modern  commercial  sense,  was  perhaps  first  used 
in  connection  with  this  form  of  dealing.^  The  same  device  was 
used  for  the  purchase  and  improvement,  in  the.  name  of  trustees, 
of  large  tracts  of  land,  afterwards  divided  among  the  certificate 
holders.^ 

§441.  Car  Trusts. —  Another  of  the  earlier  sorts  of  trust 
was  the  so-called  "  Car  Trust."  This,  like  the  Credit  Mobilier, 
was  a  method  of  securing  to  certain  capitalists  (whether  stock- 
holders in  the  contracting  railroad  or  not)  the  benefit  of  a  con- 
tract with  a  railroad  company  without  the  liability  to  loss.  If  a 
railroad  company  needed  rolling-stock,  but  was  unable  to  pay  cash 
for  it,  an  association  of  capitalists  was  formed  called  a  "  Car 
Trust,"  which  bought  the  cars,  and  sold  them  to  the  railroad 
company  under  a  contract  by  which  the  company  should  pay  for 
them  in  annual  instalments,  and  the  title  should  be  retained  until 
full  payment  was  made.     The  title  to  the  cars  and  the  right  to 

1  See  Credit-Mobilier  v.  Com.,  67  Pa.  233  ;  U.  S.  v.  Union  Pacific  R.  R.  98  U.  S. 
569. 

2  See  Smith  v.  Anderson,  15  Ch.  D.  247  (C.  A.),  "Submarine  Cables'  Trust;" 
Johnson  v.  Lewis,  6  F.  R.  27,  "  Municipal  Trust." 

3  Wigfield  V.  Potter,  45  L.  T.  Rep.  612 ;  Crowther  v.  Thorley,  32  W.  R.  330  ;  Inre 
Siddall,  29  Ch.  D.  1  (C.  A.). 


§  444.]  BUSINESS   COMBINATIONS    AND   "  TRUSTS."  559 

receive  the  instalments  of  payment  was  often  given  to  still  a  third 
body,  such  as  a  bank.^ 

§442.  Voting  Trusts.  —  A  voting  trust  is  formed  when  part 
(usually  at  least  a  majority)  of  the  stockholders  in  a  corporation 
place  their  shares  in  the  hands  of  trustees,  receiving  therefor 
receipts.  The  object  and  result  of  this  transaction  is  that  the  trus- 
tees are  enabled  to  cast  a  majority  or  other  large  proportion  of  the 
votes  of  the  corporation,  and  thus  to  direct  its  policy. 

§  443.  Trusts  for  carrying  on  Business.  —  The  recently  invented 
commercial  "  trust  "  attempts  to  accomplish  much  more  than  the 
combinations  already  described,  though  it  would  seem  to  have 
grown  out  of  such  combinations  as  the  "Cables'  Trust." '-^  The 
earliest  example  was  the  Standard  Oil  Trust,  said  to  have  been 
invented  by  S.  C.  T.  Dodd,  Esq.^  This  was  a  combination  of 
most  of  the  producers  of  mineral  oil  in  the  eastern  United  States. 
These,  if  individuals,  conveyed  their  property  to  certain  trustees ; 
in  the  case  of  corporations,  the  stockholders  conveyed  their  stock 
to  the  same  trustees.  In  return  for  the  property  conveyed,  they 
received  certificates  showing  their  interest  in  the  concern.  The 
whole  business  was  thereupon  carried  on  by  the  trustees,  who 
divided  the  profits  among  the  certificate  holders.*  The  immediate 
business  success  of  this  venture  induced  the  formation  of  a  great 
quantity  of  such  trusts,  of  which  the  most  important  is,  perhaps, 
the  Sugar  Trust.^ 

§  444.  "  Pooling "  and  other  Agreements  betvreen  Carriers.  — 
Other  forms  of  combination  have  been  found  efficient,  of  which  the 
most  important  is  perhaps  "  pooling,"  so  called.  The  usual 
object  of  pooling  is  to  maintain  rates,  that  is,  to  prevent  such 
competition  among  competing  railroads  as  should  result  in  a  ruin- 
ous lowering  of  rates  by  one  or  all  of  the  roads.  Pooling  of 
earnings  was  forbidden  by  the  Interstate  Commerce  Act.^  But 
that  act  did  not  affect  other  kinds  of  pooling.  An  important 
agreement  of  this  sort  was  formed  by  the  railroads  in  the  Western 

1  Ricker  v,  American  Loan  &  Trust  Co.,  140  Mass.  346  ;  and  see  Mills  v.  Hard, 
29  F.  R.  410.  For  a  case  where  the  transaction  was  held  to  be  a  colorable  device  to 
evade  a  mortgage,  and  the  mortgagees  were  preferred,  see  Central  Trust  Co.  v.  Ohio 
Central  R.  R.,  36  F.  R.  520. 

2  A7ite,  §  440. 

2  See  Cook  on  Stock  (2nd  ed.),  §  503  a. 

*  See  State  v.  Standard  Oil  Co.  (Ohio),  30  N.  E.  279. 

6  People  V.  North  River  Sugar  Refining  Co.,  121  N.  Y.  582,  24  N.  E.  834.     See,  for 
instances  of  other  such  trusts,  Gould  v.  Head,  38  F.  R.  886  ;  American  Biscuit  &  Mfg. 
Co.  V.  Klotz,  44  F.  R.  721  ;  People  v.  Chicago  Gas  Trust,  130  III.  263,  22  N.  E.  798 ; 
State  V.  Nebraska  Distilling  Co.,  29  Neb.  700,  46  N.  W.  155. 
6  Act  of  Feb.  4,  1887. 


5G0  THE   LAW    OF   PARTNERSHIP.  [CH.  XIX. 

United  States  in  the  year  1889.^  It  provided  that  eacli  raih-oad 
party  to  it  should  appoint  an  agent,  to  represent  it  in  an  Associ- 
ation, and  that  this  Association  should  have  power  to  fix  rates 
and  make  rules  as  to  competitive  traffic,  and  to  fine  any  member 
which  should  "  cut"  rates. 

Carriers  by  sea,  as  well  as  railroads,  have  found  it  useful  to 
make  similar  agreements.  An  instance  is  an  agreement  by  which 
the  owners  of  vessels  formed  an  association  to  determine  the 
number  of  vessels  to  be  sent  to  certain  loading  ports,  and  the 
division  of  cargo  and  freight  between  them ;  and  to  prevent 
tiie  agents  of  members  of  the  association  from  acting  in  the  inter- 
est of  competing  owners.^ 

§  445.  Legal  Nature  of  Trusts  to  hold  Property.  —  Upon  the 
invention  of  these  forms  of  association,  it  became  a  question  what 
was  the  legal  nature  of  the  transaction.  Such  combinations  as 
railroad  pools  and  voting  trusts  are  merely  ephemeral,  and  have 
no  legal  individuality  ;  but  the  property-holding  and  commercial 
trusts  are  more  or  less  permanent,  and  might  well  be  held  to 
possess  a  distinct  legal  character. 

The  Car  Trusts  have  been  held  to  be  joint-stock  partnerships.^ 
In  England,  on  the  other  hand,  it  has  been  decided  that  the 
property-holding  trusts  are  not  partnerships  or  joint-stock  associa- 
tions for  carrying  on  business,  and  are  therefore  not  illegal  under 
the  Companies  Act.*  And  this  would  seem  to  be  the  better  view. 
In  the  first  place,  as  is  pointed  out  in  the  English  cases,  the  cer- 
tificate holders  cannot  be  said  to  carry  on  any  business  either  per- 
sonally or  by  an  agent.  The  business  is  done  exclusively  by  the 
board  of  trustees,  not  by  the  certificate  holders.  The  trustees, 
being  legal  owners,  act  as  principals  and  in  their  own  names, 
and  in  no  sense  as  agents  of  the  certificate  holders.  This  reason 
applies,  no  doubt,  with  more  force  to  the  English  property-holding 
trusts  than  to  the  Car  Trusts.  But  the  reason  now  to  be  stated  is 
equally  applicable  to  both.  These  trusts  should  not  be  held  to  be 
partnerships,  because  the  object  of  them  is  not  to  carry  on  business 
for  a  profit.^  The  object  of  the  Car  Trusts  is  to  repay  the  loans 
of  the  certificate  holders,  with  interest,  and  when  that  has  been 
done  the  trust  ceases  to  exist.^     The  object  of  the  trusts  to  hold 

1  U.  S.  I'.  Trans-Missouri  Freight  Association,  53  F.  R.  440. 

2  Mogul  S.  S.  Co.  V.  McGregor,  [1892]  A.  C.  25. 

3  Mills  V.  Hurd,  29  F.  R.  410  ;  Kicker  v.  American  Loan  &  Trust  Co.,  140  Mass. 
346, 

*  Smith  V.  Anderson,  15  Ch.  D.  247  (C.  A.)  ;  In  re  Siddall,  29  Ch.  D.  1   (C.   A.). 

6  A7ite,  §  61, 

6  But  see  the  language  of  C.  Allen,  J.,  in  Packer  v.  American  Loan  &  Trust  Co., 


§  446.]  BUSINESS   COMBINATIONS    AND   "TRUSTS."  561 

mercantile  securities  is  to  purchase  and  hold  a  single  article  of 
property,  and  at  last  either  to  divide  this  property  among  the  bene- 
ficiaries or  to  sell  it  and  divide  the  proceeds.  The  object  of  the 
trustees  is  to  invest,  not  to  trade.^  And  the  trusts  for  the  pur- 
pose of  buying,  im{)roving,  and  dividing  real  estate  are  clearly 
not  partnerships,  since  the  only  object  is  to  divide  among  the 
beneficiaries  the  property  purchased.^  These  associations,  there- 
fore, are  more  properly  regarded  as  agreements  between  the 
co-owners  of  property.^ 

§  446.  Nature  of  Trusts  to  carry  on  Business.  —  The  nature  of 
the  commercial  trusts  is  different.  They  are  formed  for  the 
express  purpose  of  carrying  on  business  and  making  and  dividing 
a  profit.  They  possess  therefore  all  the  requisites  of  partner- 
ships.* But  such  a  partnership  is  in  many  respects  peculiar. 
The  legal  owners  of  the  property  are  the  trustees,  who  carry  on 
the  business.  Neither  the  corporations  which  may  have  been 
absorbed  in  the  trust  nor  the  individual  certificate  holders  have 
title  to  the  property  of  the  association  or  control  over  the  business. 
The  certificate  holders,   therefore,   are  not  the   partners.^     The 


140  Mass.  346,  349.  "Since  this  association  is  not  a  corporation,  its  members  must 
be  partners,  unless,  indeed,  as  the  defendant  contends,  they  are  simply  co-owners. 
But  we  cannot  look  upon  them  as  simply  co-owners.  Whitman  v.  Porter,  107  Mass. 
522 ;  Hoadley  v.  County  Commissioners,  105  Jlass.  519  ;  Gleason  v.  McKay,  134 
Mass.  419,  425." 

1  Smith  V.  Anderson,  15  Ch.  D.  247  (C.  A.). 

2  Wigfield  17.  Potter,  45  L.  T.  Rep.  612 ;  Crowther  v.  Tborley,  32  W.  R.  330  ;  In  re 
Siddall,  29  Ch.  D.  1  (C.  A.). 

3  Johnson  v.  Lewis,  6  F.  R.  27,  per  Caldwell,  D.  J.  "The  trust  was  not  a  cor- 
poration or  joint-stock  company  or  partnership,  but  a  trust  formed  by  deed  of  settle- 
ment for  the  purpose  of  securing  investments.  The  trustees  were  the  legal  owners  of 
the  trust  property,  and  the  business  of  the  trust  w-as  managed  by  them  and  '  the 
committee'  created  by  the  deed  for  the  benefit  of  the  certificate  holders,  who  were 
strangers  to  each  other,  and  who  entered  into  no  contract  between  themselves,  nor 
with  any  trustee  on  behalf  of  each  other,  and  were  not  therefore  partners." 

*  "It  [the  Refining  Co.  which  had  become  a  member  of  the  Sugar  Trust]  has 
helped  to  create  an  anomalous  trust,  which  is,  in  substance  and  effect,  a  partnership  of 
twenty  separate  corporations."  Finch,  J.,  in  People  v.  North  River  Sugar  Refining  Co., 
121  N.  Y.  582,  24  N.  E.  834. 

^  This  will  explain  the  language  used  by  the  court  in  Rice  v.  Rockefeller,  134  N.  Y. 
174,  31  N.  E.  907,  whicli  shouhl  be  compared  with  the  language  of  Finch,  J.,  quoted 
in  the  last  note.  In  Rice  v.  Rockefeller,  Bradley,  J.,  said:  "The  Standard  Oil  Trust 
represents  a  voluntary  association.  It  was  created  by  agreement  of  the  stockholders 
of  various  corporations  and  others  engaged  or  interested  in  a  certain  enterprise,  and 
the  several  branches  of  business  connected  with  and  incidental  to  it.  The  effect  of 
its  creation  is  the  concentration  of  supervisory  power  in  nine  trustees,  whose  certifi- 
cates of  the  trust  are  taken  in  place  of  the  stock  and  bonds  of  the  several  corpora- 
tions. The  characteristic  feature  of  it  is  in  tlie  voluntary  surrender  of  the  control  and 
management  of  the  business  of  those  corporations,  aad  in  the  fact  that  for  its  contin- 

S6 


562  THE   LAW   OF   PARTNERSHIP.  [CH.    XIX. 

position  of  the  parties  is  the  same  as  tliat  occupied  by  the  trustee 
and  beneficiaries  under  the  will  of  a  pai'tner  in  which  the  trustee 
is  empowered  to  continue  the  business  for  the  benefit  of  the  tes- 
tator's family.  We  have  seen  that  the  trustee  becomes  personally 
liable,  and  that  the  beneficiaries  are  not  liable  as  ])artners.^  So, 
in  the  case  of  the  trust  now  under  consideration,  the  trustees  are 
partners,  and  are  liable  as  such  to  all  those  who  have  dealings  with 
the  business.  The  certificate  holders  are  under  no  individual 
liability  as  partners. 

§  447.  Legal  Status  of  a  Certificate  Holder.  —  The  holder  of  a 
trust  certificate  is  therefore  not  a  partner ;  nor  is  he  in  the  same 
position  as  a  stockholder  in  a  corporation,  though  the  analogy  is 
close.  He  has  no  claim  at  law  upon  any  person  or  property. 
The  certificate  is  a  mere  declaration  of  trust  by  the  trustee  in  his 
favor.  If  a  certificate  is  transferred,  it  is  the  transfer  of  equitable 
property  ;  in  other  words,  a  transfer  of  the  claim  of  a  cestui  que 
trust  against  his  trustee.  The  form  requisite  for  such  a  transfer 
may  of  course  be  regulated  by  the  declaration  of  trust.  Conse- 
quently when  the  original  agreement,  to  which  each  certificate 
refers,  provides  for  a  sale  of  the  certificates  and  a  transfer  on 
the  books,  such  a  sale  passes  a  valid  title  in  equity,  and  the 
purchaser  may  compel  a  transfer  according  to  the  original  trust 
agreement^ 

But  though  the  certificate  holders  are  therefore  under  no  legal 
liability  to  one  dealing  with  the  trust,  it  is  conceivable  that  they 
might  nevertheless  be  forced  to  contribute  in  case  of  an  unsuccess- 
ful business.  It  is  a  general  principle  of  the  law  of  trusts  that  a 
trustee  is  entitled  to  reimbursement  from  the  cestui ;  ^  and  there- 
fore if  the  business  were  not  successful,  and  the  trustees  were 
obliged  to  pay  debts,  they  would  be  entitled  to  contribution  from 
the  certificate  holders.  And  under  some  circumstances,  such  as 
loss  of  all  the  trust  property  and  insolvency  of  all  the  trustees, 
creditors  of  the  trust  might  proceed  in  equity  directly  against  the 


uance  it  has  the  capacity  of  succession.  The  agreement  constituted  not  a  yiartnership, 
but  a  trust  in  behalf  of  the  beneficiaries.  And  while  it  is  not  a  corporation,  it,  by  the 
agreement,  took  some  of  the  attributes  of  a  corporation  in  so  far  that,  through  its 
trustees,  certificates  of  shares  in  the  equity  to  the  property  held  by  them  were  issued, 
and  were  transferable  in  like  manner,  apparently,  as  are  those  of  corporations."  The 
language  of  these  extracts,  taken  literally,  seems  contradictory;  but  taking  them  in 
connection  with  the  issues  in  the  respective  cases,  it  is  submitted  that  the  meaning  of 
the  court  is  as  stated  in  the  text. 

1  Ante,  §  356  ;  Connally  v.  Lyons,  82  Tex.  664. 

2  Rice  V.  Rockefeller,  134  N.  Y.  174,  31  N.  E.  907. 

3  2  Perry  on  Trusts,  §§  910,  913. 


§449.]  BUSINESS   COMBINATIONS   AND   '"TRUSTS."  563 

certificate  holders.^  It  is  not  therefore  strictly  correct  to  say  that 
the  certificate  holders  are  as  free  from  liability  as  the  stock- 
holders of  a  corporation :  it  is  true  at  law,  but  not  in  equity. 

§  448.  Advantages  and  Disadvantages  of  Trusts.  —  The  eco- 
nomic advantages  ot  a  properly  administered  trust  are  obvious. 
The  economy  in  administration,  the  saving  of  all  the  expenses 
and  waste  of  competition,  and  the  gain  from  having  all  the  busi- 
ness done  under  a  single  management,  and  that  the  best  attain- 
able, render  the  trust  an  invention  of  great  possible  value.  The 
success  of  a  few  trusts  shows  what  may  be  accomplished  by  this 
form  of  business.  But  the  difficulties  in  the  way  of  successful 
administration  are  so  great  that  few  trusts  are  able  to  overcome 
them.  In  the  first  place,  the  trustees  must  be  men  of  the  highest 
business  al)ility  ;  and  such  men  will  usually  prefer  to  work  for 
their  own  interests,  rather  than  to  enter  into  the  service  of  a 
great  combination.  The  temptation  to  make  use  of  questionable 
methods,  such  as  "  stock-watering,"  is  also  great ;  indeed,  the 
trust  itself  must  usually  be  formed  upon  a  vastly  inflated  estimate 
of  the  value  of  its  constituent  parts.  And  the  individual  liability 
of  the  trustees  is  such  as  few  men  would  be  willing  to  undergo. 
As  a  result  of  these  difficulties,  successful  trusts  are  likely  to 
be  few. 

§  449.  Legality  of  Trusts.  —  So  far  as  the  combination  itself  is 
concerned,  a  pool  or  trust  is  perfectly  legal.  It  is  of  the  same 
general  nature  as  a  partnership ;  differing  chiefly  in  the  fact  that 
a  larger  amount  of  capital  can  be  collected  than  is  possible  in 
the  case  of  an  ordinary  partnership.  If  the  trust  attempted  to 
act  as  a  corporation  it  would  of  course  be  ilh^gal  ;  but  it  arrogates 
no  corporate  function.  There  is  no  attempt,  for  instance,  to  limit 
liability.  Joint  stock  is  issued,  to  be  sure,  as  in  the  case  of  cor- 
porations ;  but  the  issue  and  transfer  of  the  certificates  has  even 
less  effect  than  in  the  case  of  joint-stock  companies.  The  issue 
or  transfer  of  a  share  in  a  joint-stock  company  makes  the  new 
shareholder  a  partner,  and  a  party  therefore  to  all  contracts  made 
by  the  company.  In  the  case  of  a  trust,  the  certificate  holder,  as 
•we  have  seen,  is  not  a  partner  or  a  party  to  any  contract  of  the 
trustees.  Legally  the  trust  is  a  partnership  between  the  trustees, 
and  if  it  may  be  lawfully  formed  it  would  seem  to  present  no  legal 
difficulties  or  peculiarities.  If  the  combination  is  illegal,  it  must 
be  for  one  of  the  reasons  now  to  be  set  forth. 

1  See  Fairlantl  v.  Percy,  L.  R.  3  P.  &  D.  217  ;  In  re  Johnson,  15  Ch.  D.  548  ; 
Norton  V.  Phelps,  54  Miss.  467  ;  Ferris  v.  Myrick,  44  X.  Y.  315,  325  ;  Cater  v.  Ever- 
leigh,  4  Des.  19  ;  Manderson's  Appeal,  113  Pa.  631. 


564  THE    LAW    OF    PARTNERSHIP.  [CH.    XIX. 

§450.  Illegality  of  Combinations  of  Corporations.  —  We  have 
seen  ^  that  corporations  have  no  right  to  enter  into  a  partnership; 
the  principal  reason  being,  that  it  is  a  breach  of  their  charter  to 
come  under  any  direction  except  tliat  of  their  stockholders  and 
the  directors  elected  by  them.  It  is  true,  as  we  have  just  seen, 
that  in  entering  into  a  trust  a  corporation  does  not  become  a 
member  of  a  partnership ;  but  the  result  is  quite  as  much  a  breach 
of  the  charter.  The  method  pursued  has  been  to  convey  to  the 
trustees  all  the  stock  in  the  corporation,  who  thereupon  issue 
trust  certificates  to  the  stockholders.  Although  the  corporation 
is  nominally  not  a  partner,  the  result  is  that  the  trustees,  a  body 
of  strangers,  secure  control  of  the  corporation  and  use  it,  not  for 
the  benefit  of  its  stockholders,  but  of  the  whole  body  of  holders 
of  trust  certificates.  This  is  in  effect  contrary  to  the  spirit  of  the 
charter,  and  is  illegal.^     If  there  were  no  other  objection  to  the 

1  Ante,  §  24. 

2  Gould  V.  Head,  38  F.  R.  886  ;  People  v.  North  River  Sugar  Refining  Co.,  121 
N.  Y.  582,  24  N.  E.  834  ;  State  v. Standard  Oil  Co.  (Ohio),  30  N.  E.  279  ;  Mallory 
V.  Hauauer  Oil  Works,  86  Tenn.  598,  8  S.  W.  396.  In  People  v.  North  River  Sugar 
Retining  Co.,  Finch,  J.  said  "  It  is  quite  clear  that  the  effect  of  the  defendant's  action 
was  to  divest  itself  of  the  essential  and  vital  elements  of  its  franchise  by  placing  them 
in  trust  ;  to  accept  from  the  State  the  gift  of  corporate  life  only  to  disregard  the  condi- 
tions upon  which  it  was  given  ;  to  receive  its  powers  and  pi-ivileges  merely  to  put  them 
in  pawn  ;  and  to  give  away  to  an  irresponsible  board  its  entire  independence  and  self- 
control. 

"  When  it  had  passed  into  the  hands  of  the  trust,  only  a  shell  of  a  corporation  was 
left  standing,  as  a  seeming  obedience  to  the  law,  but  with  its  internal  structure 
destroyed  or  removed.  Its  stockholders,  retaining  their  beneficial  interest,  have  sepa- 
rated from  it  their  voting  power,  and  so  parted  with  the  control  which  the  charter  gave 
them  and  the  State  re([uired  them  to  exercise.  It  has  a  board  of  directors  nominally 
and  formally  in  office,  but  qualified  by  shares  which  they  do  not  own,  and  owing  their 
official  life  to  the  board  which  can  end  their  power  at  any  moment  of  disobedience. 
It  can  make  no  dividends,  whatever  may  be  its  net  earnings,  and  must  encumber  its 
property  at  the  command  of  its  master,  and  for  purposes  wliolly  foreign  to  its  own 
corporate  interests  and  duties.  At  the  command  of  that  master  it  has  ceased  to  refine 
sugar,  and  without  any  doubt  for  the  purpose  of  so  far  lessening  the  market  supply  as 
to  prevent  what  is  termed  '  overproduction.'  In  all  these  resjiects  it  has  wasted  and 
perverted  the  privileges  conferred  by  its  charter,  abused  its  powers  and  proved  unfaith- 
ful to  its  duties.  But  graver  still  is  the  illegal  action  substituted  for  the  conduct 
which  the  State  had  a  right  to  expect  and  require.  It  has  helped  to  create  an  anoma- 
lous tru.st,  which  is,  in  substance  and  effect,  a  partnership  of  twenty  separate  corpoi-a- 
tions.  The  State  permits  in  many  ways  an  aggregation  of  capital,  but,  mindful  of  the 
possilde  dangers  to  the  people,  overbalancing  the  benefits,  keeps  upon  it  a  restraining 
hand,  and  maintains  over  it  a  prudent  supervision,  where  such  aggregation  depends 
upon  its  permission  and  grows  out  of  its  corporate  grants.  .  .  . 

"  As  corporate  grants  are  always  assumed  to  have  been  made  for  the  public  benefit, 
any  conduct  which  destroys  their  normal  functions,  and  maims  and  cripples  their 
separate  activity,  and  takes  away  their  free  and  independent  action,  must  so  far  disap- 
point the  purpose  of  their  creation  as  to  affect  unfavorably  the  public  interest  ;  and 
that  to  a  much  greater  extent  when  beyond  their  own  several  aggregations  of  capital 


§  451.]  BUSINESS   COMBINATIONS    AND   "  TRUSTS."  565 

course,  it  would  seem  to  be  illegal,  because  by  adopting  it  the  trus- 
tees would  be  enabled  to  do  all  tiieir  business  through  the  corpor- 
ations parties  to  the  trust,  and  thus  altogether  escape  the  individual 
liability  to  which  we  have  seen  they  are  subjected. 

It  is,  however,  perfectly  feasible  to  create  a  trust,  Into  which 
may  be  absorbed  the  property  and  business  of  corporations,  which 
may  yet  be  legal  in  spite  of  that  fact.  Each  corporation  has 
power  to  cIo.se  up  its  business  and  sell  out  all  its  assets.  This 
might  be  done  in  such  a  way  that  the  trustees  should  acquire 
title  to  the  assets,  giving  in  payment  to  the  corporation  either 
trust  certificates  or  cash  realized  from  tbe  sale  of  certificates. 
The  corporation,  upon  paying  its  debts  and  dividing  the  balaiice 
of  its  assets  among  the  stockholders,  might  then  be  wound  up. 

§  451.  Illegality  of  Combinations  in  Restraint  of  Trade.  — 
Another  ground  u|)()n  which  trusts  are  often  held  illegal  is  that 
the  agreement  by  which  they  are  formed  operates  in  restraint  of 
trade,  by  fostering  monopoly.^  It  seems  to  be  well  settled  that  a 
monopoly  is  illegal,  being  in  restraint  of  trade ;  but  there  seems 
to  be  some  difficulty  in  deciding  what  combination  is  sufficiently 
a  monopoly  to  be  held  illegal.     AVhere  it  is  not  in  the  power  of 


they  compact  them  all  into  one  combination  which  stands  outside  of  the  ward  of  the 
State,  which  dominates  the  range  of  an  entire  industry,  and  puts  upon  the  market  a 
capital  stock  proudly  defiant  of  actual  values,  and  capable  of  an  unlimited  expansion. 
It  is  not  a  sufficient  answer  to  say  that  similar  results  may  be  lawfully  accomplished  ; 
that  an  individual  having  the  necessary  wealth  might  have  bought  all  these  refineries, 
manned  them  with  his  own  chosen  agents,  and  managed  them  as  a  group  at  his 
sovereign  will  ;  for  it  is  one  thing  for  the  State  to  respect  the  rights  of  ownership  and 
protect  them  out  of  regard  to  the  business  freedom  of  the  citizen,  and  quite  another 
thing  to  add  to  that  possibility  a  further  extension  of  those  consequences  by  creating 
artificial  persons  to  aid  in  producing  such  aggregations.  The  individuals  are  few  who 
hold  in  possession  such  enormous  wealth,  and  fewer  still  who  peril  it  all  in  a  manu- 
facturing enterprise ;  but  if  corporations  can  combine,  and  mass  their  forces  in  a  solid 
trust  or  partnership,  with  little  added  risk  to  the  capital  already  embarked,  without 
limit  to  the  magnitude  of  the  aggregation,  a  tempting  and  easy  road  is  opened  to 
enormous  combinations,  vastly  exceeding  in  number  and  in  strength,  and  in  their 
power  over  industry,  any  possibilities  of  individual  ownership  ;  and  the  State,  by  the 
creation  of  the  artificial  persons  con.stituting  the  elements  of  the  coTubination,  and 
fai  ing  to  limit  and  restrain  their  powers,  becomes  itself  the  responsible  creator,  the 
voluntary  cause  of  an  aggregation  of  capital  which  it  simply  endures  in  the  individual 
as  the  product  of  his  free  agency.  What  it  may  bear  is  one  thing,  what  it  sliould  cause 
and  create  is  quite  another  -  .  . 

"We  are  enabled  to  decide  that  in  this  State  there  can  be  no  partnerships  of 
separate  and  independent  corporations,  whether  directly  or  indirectly  through  the 
medium  of  a  trust  ;  no  substantial  consolidations  which  avoid  and  disregard  the  statu- 
tory permissions  and  restraints  ;  but  that  manufacturing  corporations  must  be  and 
remain  several  as  they  were  created,  or  one  under  the  statute." 

1  State  V.  Nebra-ska  Distilling  Co.,  29  Neb.  700,  46  N.  W.  155;  State  v.  Standard 
Oil  Co.  (Ohio),  30  N.  E.  279. 


566  THE    LAW    OF    PARTNERSHIP.  [CH.    XIX. 

the  parties  to  an  agreement  to  gain  exclusive  control  of  a  busi- 
ness, the  agreement  cannot  be  said  to  establish  a  monopoly. 
Thus  it  has  been  held  legal  for  ship-owners  to  comljine  to  regu- 
late prices.!  g^  ^here  the  two  prhicipal  maimfacturers  of  wash- 
ing machines  agreed  to  combine,  this  was  lield  legal,  for  it  was 
not  in  their  power  to  establish  a  monopoly  ^  On  the  other  hand, 
a  combination  of  all  coal  miners  in  a  certain  region  has  been  held 
illegal,  as  creating  a  monopoly,^  and  the  same  has  been  held  as  to 
a  combination  of  all  the  grain  dealers  in  a  certain  place,  which 
was  found  to  be  a  monopoly  in  fact,  and  to  have  been  so  intended.* 
It  has  been  decided  that  a  combination  of  all  distillers  in  a  cer- 
tain region  is  an  illegal  monopoly,^  and  the  same  has  been  held 
in  Ohio  of  the  Standard  Oil  Co.^  So  a  combination  of  all  salt 
manufacturers  has  been  held  illegal.^  Perhaps  the  strongest  case 
is  that  of  an  agreement  of  a  number  of  firms  in  New  Orleans, 
who  imported  and  sold  India  bagging,  not  to  sell  any  except  by 
consent  of  a  majority  of  the  firms.  This  was  held  illegal.^  The 
question  whether  or  not  a  certain  association  creates  a  monopoly 
would  seem  to  be  best  treated  as  a  question  of  fact,  to  be  decided 
in  each  case  as  the  facts  might  appear.^ 

§  452.  Illegality  of  Combinations  affecting  Necessaries  of  Life.  — 
Certain  combinations  may  however  be  illegal,  although  not  com- 
})lete  monopolies,  if  they  tend  to  limit  the  supply  or  increase  the 
price  of  the  necessaries  of  life.^*^     This  principle  is  very  broadly 

1  Mogul  S.  S.  Co.  V.  McGregor  [1892]  A.  C.  25.  See  U.  S.  v  Trans-Missouri 
Freight  Association,  53  F.  R.  440. 

2  Dolph  V.  Troy  Laundry  Machinery  Co.,  28  F    R.  553. 

3  Morris  Run  Coal  Co.  v.  Barclay  Coal  Co.  68  Pa.  173. 

4  Craft  V.  McConoughy,  79  111.  346. 

5  State  V.  Nebraska  Distilling  Co.,  29  Neb.  700,  46  N   W.  155. 

6  State  V.  Standard  Oil  Co.  (Ohio),  30  N.  E.  279. 
f  Ohio  Salt  Co.  v.  Guthrie,  35  Oh.  St.  666. 

8  India  Bagging  Association  v.  Kock,  14  La.  Ann.  168. 

^  "  Public  welfare  is  first  considered,  and  if  it  be  not  involved,  and  the  restraint  upon 
one  party  is  not  greater  than  protection  to  the  other  party  requires,  the  contract  may 
be  sustained.  The  question  is,  whether,  under  the  particular  circumstances  of  the 
case  and  the  nature  of  the  particular  contract  involved  in  it,  the  contract  is,  or  is  not, 
unreasonable.  Rousillon  v.  Rousillon,  14  Ch.  D.  351  ;  Leather  Cloth  Co.  v.  Lorsont, 
L.  R.  9  Eq.  345.  '  Cases  must  be  judged  according  to  their  circumstances,'  remarked 
Mr.  Justice  Bradley,  in  Oregon  Steam  Navigation  Co.  v.  Winsor,  20  Wall.  64,  68, 
'  and  can  only  be  rightly  judged  when  the  reason  and  grounds  of  the  rule  are  carefully 
considered.' '"'  Fuller,  C.  J.,  in  Gibbs  v.  Baltimore  Gas  Co.,  130  U.  S.  396,  409. 
"The  combination  is  wide  in  scope,  general  in  its  influence,  and  injurious  in  effects. 
These  being  its  features,  the  contract  is  against  jiublic  policy,  illegal,  and  therefore 
void."     Agnew,  J.,  in  Morris  Run  Coal  Co.  «;.  Barclay  Coal  Co.,  68  Pa.  173. 

1"  "The  ordinary  rule,  that  contracts  in  partial  restraint  of  trade  are  not  invalid, 
does  not  apply  to  corporations   like   appellant  and  appellee  [gas  light  companiesl, 


§  454.]  BUSINESS    COMBINATIONS    AND    "'  TRUSTS."  567 

and  generally  stated,  and  appears  to  be  of  great  importance  in 
connection  with  this  subject.  Several  decisions  holding  trusts  or 
combinations  illegal  have  been  rested  upon  it.  Thus  a  combina- 
tion of  gas  companies  has  been  held  illegal  ;  ^  and  the  same  has 
been  lield  of  a  combination  of  manufacturers  of  matches.^ 

§  -153.  Effect  of  declaring  Trusts  Illegal.  —  The  effect  of  declar- 
ing a  trust  illegal  is  not,  of  course,  to  forfeit  the  property  held  by 
the  trustees.  These  continue  to  hold  the  property  in  trust ;  but 
instead  of  holding  it  according  to  the  trusts  of  the  agreement,  they 
hold  it  on  a  constructive  trust,  created  by  operation  of  law  for  the 
beneficial  owners.^ 

§  454.  statutes  forbidding  Trusts  and  Combinations.  —  Owing 
to  tiie  rapid  rise  into  prominence  of  trusts,  a  feeling  (perhaps  not 
well  founded)  has  come  to  prevail  that  tiiey  are  dangerous  to  the 
]>ublic  welfare.  Iji  consequence  of  this  feeling,  a  large  number  of 
States  have  passed  acts  forbidding  the  formation  of  trusts  or 
other  similar  combinations.  A  type  of  these  acts,  and  an  example 
of  their  sweeping  character  is  this  : 

"  If  any  corporation,  partnership,  association,  or  individual  shall 
create,  enter  into,  become  a  member  of  or  a  party  to  any  pool, 
trust,  agreement,  combination,  understanding,  or  confederation 
with  any  other  corporation,  partnership,  or  individual  to  regulate 
or  fix  the  price  of  [specified  commodities  or  all  commodities]  or 
shall  create,  enter  into,  become  a  member  of  or  a  party  to  any 
pool,  arrangement,  combination,  or  confederation  to  fix  or  limit  the 
amount  or  quantity  of  any  commodity  or  article  to  be  manufac- 
tured, mined,  produced,  or  sold  in  this  State,  he  or  it  shall  be  deemed 
guilty  of  a  conspiracy  to  defraud,  and  be  subject  to  penalties."  * 

because  they  were  engaged  in  a  public  business,  and  in  furnishing  that  which  was  a 
matter  of  public  concern  to  all  the  inhabitants  of  the  city.  In  West  Virginia  Trans- 
portation Co.  V.  Ohio  River  Pipe  Line  Co.,  22  W.  Va.  617,  it  was  said-  'If  there  be 
any  sort  of  business  which  from  its  peculiar  character  can  be  restrained  to  no  extent 
whatever  without  prejudice  to  the  public  interest,  then  the  courts  would  be  compelled 
to  hold  void  any  contract  imposiug  any  restraint,  however  partial,  on  this  peculiar 
business,  provided,  of  course,  it  be  .shown  clearly  that  the  peculiar  bu.siness  thus 
attempted  to  be  restrained  is  of  .such  a  character  that  any  restraint  upon  it,  however 
partial,  must  be  regarded  by  the  court  as  prejudicial  to  the  public  interest.'  "  Magru- 
der,  J.,  in  Chicago  Gas  Light  &  Coke  Co.  v.  People's  Gas  Light  &  Coke  Co.  121  111. 
530,  13  N.  E.  169. 

1  Gibbs  V.  Baltimore  Gas  Co.,  130  U.  S.  396  ;  Chicago  Gas  Light  &  Coke  Co.  v. 
People's  Gas  Light  &  Coke  Co.,  121  111.  530,  13  N.  K  169  ;  People  v.  Chicago  Gas 
Tru.st,  130  111.  268,  22  N.  E.  798. 

2  Richardson  v.  Buhl,  77  Mich.  632,  43  X.  W.  1102. 
s  Cameron  v.  Havemeyer,  25  Abb.  N.  C.  438. 

*  This  0-:  similar  statutes  have  been  passed  in  the  following  states  :  Ala.  Acts  1891, 
c.  202,  §  1  ;    Cal.  Stat.    1893,  c.  19,  §  4  (as  to  live  stock);    111.  Laws  1891,  p.  206; 


568  THE   LAW   OF   PARTNERSHIP.  [CH.    XIX. 

And  by  Act  of  July  2,  1890,  the  Congress  of  the  United  States 
passed  a  similar  Act,  providing  that  "every  contract  or  combina- 
tion in  the  form  of  trust  or  otherwise,  or  conspiracy  in  restraint 
of  trade  or  commerce  among  the  several  States,  or  with  foreign 
nations,"  shall  be  illegal ;  and  that  "  every  person  who  shall  mon- 
opolize, or  combine  or  conspire  witli  another  person  or  persons  to 
monopolize,  any  part  of  the  trade  or  commerce  among  the  several 
States  or  with  foreign  nations,  shall  be  guilty  of  a  misdemeanor." 
These  specific  statutes  were  preceded  by  a  more  general  form  of 
enactment,  like  the  New  York  Act,  which  declared  that  "  If  two 
or  more  parties  shall  conspire  to  do  any  act  injurious  to  trade  or 
commerce,  they  shall  be  deemed  guilty  of  a  misdemeanor."  ^ 

§  455.  Effect  and  Interpretation  of  such  Statutes.  —  These 
statutes  considerably  extend  the  common  law.  Where  at  common 
law  all  trusts  are  legal  unless  they  are  formed  for  certain  illegal 
purposes,  or  in  an  illegal  manner,  under  the  statutes  most  forms 
of  combination  are  illegal.^  The  Act  of  Congress  of  July  2, 1890, 
has  however  been  held  not  to  apply  to  combinations  between  rail- 
roads, since  the  regulation  of  railroads  was  accomplished  by 
tlie  Interstate  Commerce  Act.^ 

Iowa  Laws  1890,  c.  28  ;    Kas.  Laws  1889,  c.  257  ;    Ky.  Acts  1890,  c.  1621  ;    La.  Acts 

1890,  c.  86  ;    Maine   Laws  1889,  c.  266,  §  1  ;    Mich.  Acts  1889,  c.  225  ;    Minn.  Laws 

1891,  c.  10  ;  Miss.  Laws  1890,  c.  36,  §  1 ,  Mo.  Laws  1891,  p.  186  ;  Neb.  Laws  1889, 
c.  69;  Laws  1891,  c.  46,  §  5  (school  books)  ;  N.  Mex.  Laws  1891,  c.  10,  §  1 ;  N.  Car. 
Laws  1889,  c.  374  ;  N.  Dak.  Const.  Art.  7,  §  146  ;  Acts  1890,  c.  174,  §  1  ;  S.  Dak. 
Acts  1890,  c.  154,  §  1  ;  Tenn.  Acts  1889,  c.  250  ;  Acts  1891,  c.  218. 

1  2  R.  S.  691,  §  8.  For  a  statute  aimed  directly  at  combinations  in  a  single  line  of 
business,  the  production  of  salt,  see  Laws  of  1841,  c.  183,  §  16  ;  Clancey  v.  Onondaga 
Fine  Salt  Mfg.  Co.,  62  Barb.  395. 

2  See  American  Biscuit  &  Mfg.  Co.  v.  Klotz,  44  F.  R.  721  ;  U.  S.  v.  Jellico  Mt. 
Coal  &  Coke  Co.,  46  F.  R.  432. 

3  U.  S.  j;.  Trans-Missouri  Freight  Association,  53  F.  R.  440. 


APPENDIX   OF  FORMS. 


Introductory  Clauses. 

Articles  of  Copartnership  made  and  entered  into  this  first  day 
of  July,  A.  D.  1893,  by  and  between  John  Doe  of  Boston  in  the 
county  of  Suffolk  and  Commonwealth  of  IVfassachusetts,  and  Richard 
Roe,  of  the  city  of  New  York,  in  the  county  and  State  of  New  York. 

1.  The  name  and  style  of  the  firm  shall  be  John  Doe  &  Co. 

2.  The  business  of  tlie  firm  shall  be  the  brass-finishing  business 
[heretofore  carried  on  by  the  said  Doe  at  number  1001  Atlantic 
Avenue  in  said  city  of  Boston]. 

3.  Said  business  shall  be  carried  on  at  number  1001  Atlantic 
Avenue  in  said  Boston,  or  at  such  other  place  or  places  as  said 
parties  shall  mutually   agree  upon, 

4.  This  copartnership,  unless  sooner  terminated  as  hereinafter 
provided,  shall  continue  in  force  for  twenty  years  from  the  said  first 
day  of  July,  A.  D.  1893. 

\_A   Simple  Form  of  Introduction  is  the  following.'] 

The  undersigned,  John  Doe  of,  &c.,  and  Richard  Roe  of,  &c.,  hav- 
ing formed  a  copartnership  under  the  name  and  style  of  John  Doe 
&  Co.,  for  the  purpose  of  manufacturing  and  selling  clothing  in  the 
city  of  New  York,  to  continue  for  the  term  of  three  years  from  the 
first  day  of  July,  A.  D.  1893,  it  is  understood  and  agreed  between 
them  as  follows,  viz.  —  i 

Capital. 

The  capital  shall  consist  of  the  sum  of  twenty  thousand  dollars,  to 
be  contributed  by  the  partners  in  cash,  in  equal  sums  of  ten  thousand 
dollars  each,  on  or  before  the  first  day  of  August,  A.  D.  1893.  Said 
partners  shall  be  interested  in  the  business  and  capital  of  the  part- 
nership in  equal  shares. 

1  The  following  forms  may  be  found  useful  as  suggestions  in  the  drawing  of  Articles 
of  Copartnership.  These  forms  are  not  original  with  the  editor,  but  have  been  made 
up  from  reported  cases,  accredited  treatises,  and  unpublished  Articles.  Other  clauses 
may  be  found  in  the  Appendix  to  Bates  on  Partnership,  from  which  one  or  two  of 
these  forms  have  been  taken.  Many  clauses  of  an  elaborate  agreement  are  given  in 
Steuart  v.  Gladstone,  10  Ch.  D.  628. 


570  THE    LAW    OF    PARTNERSHIP. 

[Ott  Continuance  of  old  Busmess.'^ 

The  property,  stock  in  trade,  assets  and  accounts  now  comprised 
in  the  business  heretofore  carried  on  by  tlie  said  Doe  shall  become 
the  property  of  this  copartnership  ;  and  each  partner  shall  own  a 
half  interest  in  the  copartnership.  The  debts  due  from  said  Doe  in 
respect  of  said  business,  and  which  are  set  forth  in  a  schedule  annexed 
to  this  instrument,  amounting  in  all  to  five  thousand  dollars,  shall  be 
assumed  and  paid  by  this  copartnership;  but  all  other  debts  of  said 
Doe  not  comprised  in  said  schedule  shall  not  be  taken  as  liabilities  of 
this  copartnership,  but  shall  be  paid  by  said  Doe. 

[On  Taking  Former  Assets  at  a  Valuation.] 

The  lease,  plant,  fixtures,  merchandise,  credits,  patents,  good-will, 
and  all  the  other  effects  of  said  Doe,  heretofore  employed  and  used 
by  him  in  connection  with  the  brass-finishing  business  at  said  premises, 
number  1001  Atlantic  Avenue  in  said  Boston,  shall  be  brought  into 
said  copartnership,  and  be  taken  by  it  at  an  agreed  valuation  of  ten 
thousand  dollars,  which  sum  shall  be  considered  as  the  amount  of 
capital  brought  by  said  Doe  into  said  copartnership. 

Withdrawal  of  Capital  by  Partners     Compensation,  &c. 

The  capital  is  to  be  employed  in  the  business  of  the  concern,  and 
no  part  thereof  is  to  be  drawn  out  by  any  of  the  partners  for  the  time 
being  except  as  hereinafter  provided. 

If  any  of  said  partners  at  any  time  draw  any  moneys  out  of  said 
copartnership  except  as  hereinafter  provided,  the  partner  so  over- 
drawing shall  be  charged  interest  on  the  amount  at  the  rate  of  six 
per  cent,  per  annum. 

Said  partners  shall  be  at  liberty  to  draw  out  of  the  funds  of  the  firm 
each  month,  for  their  private  expenses,  the  following  sums,  to  wit: 
John  Doe  one  hundred  dollars,  Richard  Roe  fifty  dollars.  The  sums 
so  drawn  shall  be  charged  against  the  partners  respectively ;  and  if 
at  the  annual  settlement  hereinafter  provided  for  the  profits  of  any 
partner  do  not  amount  to  the  sums  so  drawn  out  in  that  year,  he 
shall  be  charged  interest  on  the  deficiency  at  the  rate  of  six  per  cent. 
per  annum  from  that  time  until  such  excess  shall  be  repaid  to  said 
firm  [or,  he  shall  at  once  repay  such  deficiency  to  the  firm].  If  at 
such  settlement  the  profits  of  any  partner  exceed  the  amount  so 
drawn  out  in  that  year,  the  excess  shall  be  placed  to  the  credit  of 
said  partner  on  the  books  of  the  firm  [and  he  shall  be  at  liberty 
immediately  to  withdraw  it]. 

Neither  partner  shall  withdraw  from  the  business  of  the  concern 
any  money  until  the  expiration  of  six  months  from  this  date,  and 
then  no  more  than  his  share  of  the  profits. 


APPENDIX  OF  FORMS.  571 


ACCOUXT.S. 

All  the  transactions  of  the  said  copartnership  shall  be  entered  in 
regular  books  of  account,  and  on  the  first  day  of  January  and  the 
first  day  of  July  in  each  year  during  the  continuance  of  this  copart- 
nership, account  of  stock  shall  be  taken,  and  an  account  of  the 
expenses  and  profits  adjusted  and  exhibited  on  said  books;  said  pro- 
fits shall  then  be  divided,  and  a  moiety  carried  to  the  separate  account 
of  each  partner  [or,  in  the  following  proportions,  viz.  to  A.,  40  per 
cent. ;  to  B.,  30  per  cent. ;  and  to  C,  30  per  cent].  Either  partner 
shall  be  at  liberty  to  withdraw  from  the  firm  at  any  time  the  whole 
or  any  part  of  his  share  of  the  accrued  profits,  thus  ascertained  and 
carried  to  his  separate  account. 

Each  partner  shall  have  open  and  free  access  to  the  books  and 
accounts  of  the  copartnership  at  all  times,  and  no  material  or  impor- 
tant changes  shall  at  any  time  be  made  in  the  general  business  of  the 
firm,  either  in  the  buying  of  stock  or  in  any  other  respect,  by  either 
partner  without  the  knowledge  of  the  other. 


Allowance  of  Ixterest,  Rent,  &c. 

Each  partner  is  to  be  allowed  interest  at  the  rate  of  six  per  cent, 
per  annum  upon  the  amount  of  capital  [accrued  profits]  standing  to 
his  credit  from  time  to  time  on  the  books  of  the  firm. 

The  premises  number  1001  Atlantic  Avenue  in  said  Boston,  belong- 
ing to  said  Doe,  shall  be  used  by  the  copartnership  ;  said  Doe  shall  be 
credited  upon  the  books  of  the  copartnership  with  two  thousand 
dollars  per  annum  as  rent  for  the  use  of  said  premises,  and  the 
copartnership  shall  pay  all  taxes,  premiums  for  fire  insurance,  and 
repairs  on  said  premises  during  its  occupancy  thereof. 

Said  Doe  shall  be  allowed  the  salary  of  one  thousand  dollars  per 
annum  before  division  of  profits,  as  extra  compensation  for  the 
management  and  superintendence  of  the  business ;  and  shall  also 
receive  a  commission  of  ten  per  cent,  upon  all  sales  effected  by  him 
on  behalf  of  the  firm. 


Division  of  Profit  and  Loss. 

The  profits  of  the  business,  after  deducting  all  expenses  [and  the 
sum  of  one  thousand  dollars  per  annum,  which  shall  remain  in  the 
firm  as  additional  capital],  shall  be  [equally]  divided  between  the 
partners  [in  the  following  proportion,  viz. — ]  on  the  first  day  of 
January  in  every  year.  All  expenses  and  losses  of  the  copartnership 
shall  be  borne  by  the  partners  in  the  same  proportion. 


572  THE   LAW    OF    PARTNERSHIP. 


Duties  of  Partners. 

The  partners  shall  be  bound  to  give  only  such  personal  attention 
to  the  business  as  they  may  find  convenient;  but  neither  partner 
shall  engage  in  any  speculation,  or  in  any  other  business,  to  the  detri- 
ment of  the  said  copartnership. 

The  said  partners  shall  give  their  entire  personal  attention  to  the 
business,  so  far  as  necessary,  and  shall  use  their  best  skill,  judgment, 
and  discretion  to  promote  the  profits  of  the  concern ,  and  during  the 
continuance  of  the  copartnership  neither  of  said  partners  shall  engage 
in  any  speculation  on  his  own  separate  account,  or  be  in  any  way 
interested  in  any  other  business  than  that  of  the  copartnership  hereby 
established. 

During  the  continuance  of  this  copartnership  neither  of  the  partners 
shall  assume  any  pecuniary  liability,  either  in  his  own  name  or  in 
that  of  the  firm,  for  the  accommodation  of  any  other  person,  nor 
become  surety  for  any  other  person,  without  the  written  consent  of 
the  other  partner  previously  obtained. 

None  of  the  partners  shall  draw,  accept,  indorse,  or  negotiate  any 
bill  of  exchange,  promissory  note,  or  other  negotiable  instrument,  in 
the  name  of  any  or  either  of  the  firms  under  which  the  partnership 
may  for  the  time  being  be  carried  on,  for  his  own  private  use,  or  for 
any  purpose  other  than  the  immediate  use  of  the  partnership,  or  shall 
suffer  the  partnership  effects,  or  his  share  or  interest  therein,  to  be 
attached  for  any  private  engagement  or  debt. 

It  shall  not  be  in  the  power  of  any  of  the  partners  to  assign  all  or  any 
part  of  his  share  or  interest  in  the  capital,  stock,  or  profits  of  the  con- 
cern to  any  person  or  persons,  or  to  give  them  a  right  to  inspect  the 
firm  books,  or  to  interfere  in  any  way  with  the  business  of  the  firm ; 
and  should  any  such  assignation  or  other  conveyance  be  granted  or 
right  given  contrary  to  this  stipulation,  the  same  is  hereby  declared 
to  be  null  and  void  and  of  no  force,  strength,  or  effect,  so  far  as 
regards  the  copartnership  or  other  individual  partners,  who  shall  not 
be  obliged  to  pay  any  attention  thereto. 

Powers   of  Majority. 

In  all  questions,  differences,  or  disputes,  between  the  partners,  aris- 
ing in  said  business  and  the  management  and  regulation  thereof,  or 
any  act,  transaction,  matter,  or  thing,  relating  thereto,  the  determina- 
tion of  the  majority  in  number  of  said  partners  shall  be  final  and 
conclusive  on  the  others,  unless  the  others  shall  be  desirous  of  sub- 
mitting the  determination  of  the  matter  in  controversy  to  arbitration, 
pursuant  to  the  proviso  hereinafter  contained,  and  shall  require  the 
reference  to  arbitration  within  three  days  after  the  determination  by 
the  majority  shall  have  been  communicated  to  them,  and  m  case  of 


APPENDIX    OF    FORMS.  673 

such  arbitration  the  award  shall  be  final  and  conclusive  upon  the 
parties. 

The  majority  of  said  partners  may  at  any  time  forbid  the  signing 
of  the  firm  name  by  either  partner,  or  all  dealings  with  a  specified 
individual  upon  partnership  account.  No  partner  having  notice  of 
such  decision  by  a  majority  of  the  partners  shall  act  in  disobedience 
to  it ;  and  any  partner  who  brings  loss  upon  the  partnership  by  acting 
in  disobedience  to  the  decision  of  a  majority  of  the  partners,  shall 
repay  such  loss  to  the  partnership. 


Dissolution. 

Upon  the  retirement  of  any  partner,  or  other  dissolution  of  the 
firm,  it  shall  be  lawful  for  any  partner  to  sign  the  names  of  the  firm 
and  of  the  individual  partners  to  all  necessary  notices  of  dissolution, 
in  order  to  the  publication  of  the  same. 

Upon  dissolution  of  this  copartnership  by  any  cause,  no  living 
partner  shall  refuse  to  sign  a  written  notice  of  dissolution  ;  and  each 
partner  hereby  authorizes  the  other  partners  to  sign  in  his  name  any 
notice  of  dissolution  necessary  for  publication. 

On  the  termination  and  final  settlement  of  this  copartnership,  each 
partner,  respectively,  shall  take  a  share  of  the  cash  and  clothing  then 
on  hand,  in  proportion  to  his  interest  in  the  same,  in  discharge  of  his 
claim  upon  said  copartnership. 

In  case  of  the  decease  of  either  member  of  said  firm  during  the 
terra  of  this  copartnership,  it  shall  be  the  duty  of  the  survivor  or 
survivors,  and  they  are  hereby  fully  authorized,  forthwith  to  take  an 
inventory  of  the  copartnership  property,  both  personal  and  real,  and 
with  the  least  possible  interruption  continue  the  business  until  the 
legal  and  duly  authorized  representative  of  said  deceased  member  or 
members  shall  appear  and  assume  his  or  their  direction  in  the  dispo- 
sition of  said  copartnership  property  in  accordance  with  the  foregoing 
provisions. 

In  the  event  of  the  death  of  either  party  to  this  agreement,  the 
copartnership  shall  not  on  that  account  be  dissolved ;  but  the  interest 
of  such  deceased  partner  shall  be  continued  and  represented  by  the 
legal  personal  representative  of  such  deceased  partner. 

If  a  majority  of  the  partners  for  the  time  being  in  the  partnership, 
,shall  at  any  time  be  desirous  that  any  of  the  partners  shall  retire 
from  the  partnership,  and  shall,  six  calendar  months  at  the  least, 
previously  to  the  time  at  which  they  shall  be  desirous  that  such 
partner  shall  retire,  give  a  notice  in  writing  of  such  their  desire  to 
such  partner ;  then  and  in  such  case  the  partnership  shall,  as  regards 
the  partner  to  whom  such  notice  shall  be  given,  be  dissolved  at  and 
from  the  time  in  such  notice  mentioned. 


574  THE   LAW   OF   PARTNERSHIP. 

On  the  dissolution  of  this  copartnership,  if  the  said  parties  or  their 
legal  representatives  cannot  agree  in  the  division  of  the  stock  then  on 
hand,  the  whole  copartnership  effects,  including  the  good-will,  and 
excepting  the  debts  due  the  firm,  shall  be  sold  at  public  auction,  at 
which  both  parties  shall  be  at  liberty  to  bid  and  purchase  like  other 
individuals,  and  the  proceeds  shall  be  divided  after  paying  the  debts 
of  the  firm. 

On  the  insanity  or  insolvency  of  either  partner,  his  interest  in  the 
copartnership  shall  cease ;  but  the  business  may  be  continued  by  the 
other  partner.  The  retiring  partner's  share  of  the  assets  of  the  busi- 
ness, as  determined  by  the  last  semi-annual  stock-taking  (or  by  the 
next  stock-taking,  if  it  is  to  occur  within  two  months)  shall  m  such 
case  be  paid  over  to  his  legal  representative  in  three  equal  semi- 
annual instalments,  the  first  instalment  to  be  paid  within  seven  days 
after  the  next  regular  stock-taking  has  been  completed.  In  case  of  a 
wilful  infraction  of  the  foregoing  agreements,  or  either  of  them,  by 
one  partner,  the  other  partner  may,  at  his  option,  declare  the  copart- 
nership terminated,  and  proceed  as  if  the  partner  in  fault  had  become 
insolvent ;  except  that  the  retiring  partner's  share  of  the  assets  shall 
in  such  case  be  paid  to  him  personally. 

This  copartnership  shall  terminate  upon  either  partner  giving  to 
the  other  three  months'  notice  in  writing  of  his  desire  to  terminate 
the  same.  By  agreement  of  the  partners,  one  of  them  may  in  such 
case  continue  the  business  on  such  terms  as  form  part  of  said  agree- 
ment. If  no  such  agreement  is  made,  all  the  partnership  assets, 
inoluding  the  firm-name  and  good-will,  shall  be  sold  at  a  public  auc- 
tion, at  wdiich  each  partner  shall  be  at  liberty  to  bid  and  purchase, 
like  other  individuals.  The  proceeds  of  this  sale,  and  all  other  assets 
of  the  partnership  remaining  after  all  debts  have  been  paid,  shall 
then  be  equally  divided  between  the  partners. 

In  case  of  the  death  of  the  said  Doe  during  the  continuance  of  this 
copartnership,  the  business  may  be  closed  up  by  the  said  Roe,  and 
the  said  Doe's  share  of  the  assets  shall  be  paid  over  to  his  executor 
or  administrator,  or  the  said  Roe  may,  at  his  option,  continue  the 
business.  If  the  business  is  continued,  the  said  Doe's  share  of  the 
assets,  as  determined  by  the  last  semi-annual  stock-taking,  shall  be 
held  by  the  said  Roe  as  a  loan  until  the  time  hereinbefore  set  for  the 
termination  of  the  copartnership ;  and  one-half  of  the  profits  of 
the  business  shall  be  paid  over  to  the  said  Doe's  heirs  or  represent- 
atives at  each  semi-annual  stock-taking,  in  lieu  of  interest  upon  the 
aforesaid  loan.  At  the  expiration  of  said  time,  the  said  Roe  shall 
pay  to  the  heirs  or  representatives  of  the  said  Doe,  as  payment  in 
full  of  the  aforesaid  loan,  one-half  of  the  assets  of  the  business 
(exclusive  of  accrued  profits)  which  remain  after  all  debts  have  been 
paid.  The  heirs  or  representatives  of  the  said  Doe  shall  have  all 
such  rights  in  the  business  as  are  secured  to  the  said  Doe  by  the 


APPENDIX    OF    FORMS.  575 

articles  above  written ;  but  they  shall  have  no  right  to  interfere  in 
the  management  of  the  business. 

In  case  of  the  death  of  said  Roe  during  the  continuance  of  this 
copartnership,  the  copartnership  shall  not  be  terminated;  but  all  the 
interest  of  said  Roe  in  the  copartnership  shall  pass  to  his  son  James 
Roe.  The  business  shall  thereafter  be  continued,  for  the  benefit  of 
the  cojjartnership,  by  said  John  Doe,  in  accordance  with  these  ar- 
ticles of  copartnership;  except  that  no  notice  given  by  James  Roe 
shall  be  sufficient  to  terminate  the  copartnership,  without  the  consent 
of  said  John  Doe. 

If  any  of  the  partners  for  the  time  being  in  the  partnership  shall 
die  or  cease  to  be  a  partner  under  any  of  the  aforesaid  provisions, 
there  shall  be  placed  to  the  credit  of  the  account  of  such  partner,  in 
lieu  of  his  share  of  all  profits  accruing  since  the  1st  of  May  next  pre- 
ceding his  death  or  ceasing  to  be  a  partner  as  aforesaid,  and  as  cash, 
twelve  months  from  the  1st  of  May  next  after  his  death  or  ceasing  to 
be  a  partner  as  aforesaid,  a  sum  of  money  equal  to  a  proportionate 
part  of  his  share  of  one  year's  profit,  calculated  upon  the  average 
profits  of  the  three  preceding  years  of  the  partnership,  and  such  pro- 
portionate part  shall  be  calculated  upon  or  in  respect  of  the  number 
of  days  which  shall  have  elapsed  at  the  time  of  his  death  or  ceasing 
to  be  a  partner  as  aforesaid  since  the  1st  of  May  then  last. 

If  any  of  the  partners  for  the  time  being  in  the  partnership  shall 
die  or  cease  to  be  a  partner  in  the  concern  by  any  means  whatsoever, 
the  concern  shall  not  be  thereby  or  thereupon  wholly  dissolved, 
except  so  far  as  regards  the  party  so  dying  or  ceasing  to  be  a  partner 
as  aforesaid,  but  the  account  between  such  partner  or  his  represent- 
atives and  the  house  shall  be  adjusted  as  follows:  The  surviving  or 
continuing  partners  shall  pay  to  the  representatives  of  such  deceased 
partner,  or  to  the  party  who  shall  so  cease  to  be  a  partner  as  afore- 
said, the  sum  which  shall  appear  at  the  credit  of  the  party  so  dying 
or  ceasing  to  be  a  partner  as  aforesaid,  after  the  same  shall  have  been 
adjusted  under  the  provisions  hereinbefore  contained,  by  three  equal 
instalments,  one  at  the  end  of  the  first  year,  one  at  the  end  of  the 
second  year,  and  one  at  the  end  of  the  third  year  after  such  partner 
shall  have  died  or  ceased  to  be  a  partner  as  aforesaid,  such  sum  bear- 
ing interest  at  the  rate  of  five  per  cent,  per  annum,  and  in  case,  on 
taking  the  accounts  hereinbefore  directed,  the  balance  shall  appear  to 
be  against  the  partner  so  dying  or  ceasing  to  be  a  partner  as  afore- 
said, the  balance  shall  be  forthwith  paid  by  the  personal  representa- 
tives of  such  deceased  partner  or  by  the  party  so  ceasing  to  be  a  partner 
as  aforesaid  (as  the  case  may  be)  to  the  surviving  or  continuing 
partners. 


676  THE   LAW   OP   PARTNERSHIP. 


Abbitratiox. 

In  case  any  dispute  arises  between  the  partners,  either  with  regard 
to  these  articles  or  with  regard  to  any  other  partnership  transaction, 
it  shall  be  settled  by  arbitration ;  each  partner  to  appoint  one  arbi- 
trator, and  those  arbitrators,  if  necessary,  to  choose  a  third. 


Conclusion. 

In  witness  whereof  the  said  parties  have  hereunto  set  their  hando 
and  seals  this  [day  and  year  first  above  written]  first  day  of  July, 
A.  D.  1893. 

Admission  of  New  Member  :  Extensio::  of  Term  :  Dissolu- 
tion BY  Consent.     [To  be  indorsed  on  the  articles.] 

In  consideration  of  the  premium  of  ten  thousand  dollars  to  be  paid 
to  the  firm  of  John  Doe  &  Co.  by  John  Smith  of  the  city  of  Phila- 
delphia, said  Smith  is  admitted  as  a  full  and  equal  partner  in  said 
firm ;  the  within  Articles  of  Copartnership  of  said  firm  remaining  in 
force  in  the  new  firm,  except  that  the  firm  name  shall  be  Doe  &  Roe ; 
the  term  of  the  partnership  shall  be  ten  years  from  the  date  hereof, 
and  the  capital  shall  be  fifty  thousand  dollars,  and  the  partners  shall 
be  interested  therein  in  the  following  proportions,  viz. :  John  Doe, 
two-fifths;  Richard  Roe,  two-fifths;  John  Smith,  one-fifth. 

Said  premium  shall  be  paid  as  follows  :  Six  thousand  dollars  in 
cash  upon  the  execution  of  this  agreement,  and  the  remaining  four 
thousand  dollars  in  three  months  from  this  date.  Said  premium 
shall  become  the  property  of  the  firm  of  Doe  &  Roe  [or,  of  John  Doe 
&  Co.],  and  shall  be  taken  to  be  capital  of  said  Smith ;  and  the  firm 
of  Doe  &  Roe  shall  pay  interest  thereon,  the  same  as  to  the  other 
partners. 

It  is  agreed  that  the  partnership  within  mentioned  shall  be  con- 
tinued on  the  same  conditions,  limitations,  and  restrictions  for  the 
further  term  of  five  years  from  and  after  the  first  day  of  January, 
A.  D.  1890. 

By  mutual  consent  of  the  within  named  parties  the  within  partner- 
ship is  hereby  dissolved,  and  either  one  of  the  partners  is  authorized 
to  receive  money  and  compound  the  claims  due  the  partnership,  and 
give  full  receipts  and  acquittances  for  the  same. 


INDEX. 


INDEX. 


A. 

Section 
ABROAD, 

right  of  partner  to  assets  seized  and  restored  to  copartner  residing   .     403 
ACCEPTANCE, 

by  partner  of  bill  of  exchange  on  firm,  good  though  by  parol    .     .      97  n. 
ACCOMMODATIOX   PAPER, 

of  partnership  not  binding  unless  authorized  by  all  partners     .     .     .     143 
ACCOUXT, 

bill  for,  will  not  lie  in  case  of  illegal  partnership 8  n. 

right  to,  not  a  test  of  partnership 53 

not  confined  to  partners 53  n. 

between  paitners  cannot  be  taken  at  law 185  n. 

action  at  law  by  partner  for  balance  of 193,194 

what  is  settlement  of 195 

when  opened  for  mistake 196 

contract  to  render 197 

a  decree  foi',  and  reasons 206 

cannot  be  demanded  by  one  partner  in  respect  of  particular  items    .     206 

without  dissolution 207 

how  settled 208 

right  of  purchaser  of  partner's  interest  on  execution  to  demand  259, 259  n. 
surviving  partner  must  render,  to  estate  of  deceased  partner  .  .  344  n. 
assignee  in  bankruptcy  of  partner  may  claim  from  copartners      .     .     370 

when  an,  will  be  ordered 406 

right  to  demand,  peculiar  to  partners  and  their  representatives  in 

interest 406 

every  partner  has  a  right  to  an 406 

right  to  an,  may  be  transferred  by  a  partner  to  his  representatives  .  406 
every  person  who  has  acquired  a  partner's  interest  in  the  joint  fund 

may  call  for  an ^106 

courts  of  equity  have  power  to  grant  any  partner  or  his  representa- 
tives an.  for  cause 406 

rulings  on  this  subject  in  the  different  States 406  n. 

duty  of  partners  to  keep "^0" 

when  too  confused  to  be  proved,  no  relief  will  be  given  ....  408  n. 
may  be  rendered  unnecessary  by  agreement  between  partners  or 

their  representatives 408 

in  case  of  dissolution  must  be  an,  if  demanded  by  a  party  in  in 

terest 408 


580  INDEX. 

Section 
ACCOUNT—  Continued. 

may  be  decreed  without  a  prayer  for  dissolution 408 

in  a  suit  in  equity  for  a  dissolution  and  an,  alleging  that  dividends 
of  profits  were  to  be  made  at  stated  periods,  the  court  may  decree 
the  payment  of  the  sum  due  before  the  distribution  of  assets     408  n. 

when  it  may  be  opened  for  error 409,411 

a  suit  to  impeach  an  account  must  be  brought  within  a  reasonable 

time 409 

but  if  fraud  be  shown,  courts  will  open  the  account  after  any  length 

of  time 409,  409  n.,  410 

where  tlie  bill  praying  for  the  opening  of  an  account  does  not  allege 
fraud,  but  in  the  opinion  of  the  courts  the  facts  stated  imply 

fraud,  it  will  be  granted 410 

courts  of  equity  may  infer,  judicially,  a  fraudulent  purpose  from 

suspicious  circumstances 410  n. 

having  been  once  admitted  by  a  party  to  be  correct,  he  cannot  after- 
wards file  a  bill  to  have  one  taken  in  equity  without  charging 

specific  acts  of  fraud  against  the  defendant 410  n. 

a  party  seeking  to  open,  must  specify  the  errors  particularly  .     .     .     411 
will  be  opened  at  any  time  for  fraud  or  mistakes  so  far  proved  that 

the  court  is  satisfied  they  ought  to  be  corrected 411  n. 

will  not  be  opened  where  it  has  been  signed  or  security  taken  on  the 

foot  of,  unless  the  whole  transaction  appear  fraudulent     .     .     411  n. 
if  the  plaintiff  show  an  omission  has  been  made  of  a  credit  due,  he 

■  will  be  permitted  to  add  it 411 

the  plaintiff  may  be  permitted  to  remove  a  wrong  charge  stated  in 

the  account 411 

the  practice  in  England,  when  a  partner  owing  a  private  debt  to  the 

partnership  petitions  for  an 412 

whether  plaintiff  in  bill  for,  must  tender  or  pay  money 412 

how  it  should  be  taken 413 

parties  may  regulate  their  manner  of  taking  account  by  their  agree- 
ment   413 

an  agreement  may  be  inferred  from  their  having  settled  their  ac- 
counts for  a  length  of  time  in  a  certain  way 413 

need  not  be  signed  by  the  parties  if  there  be  other  evidence  of  acqui- 
escence  413 

a  party  not  objecting  to  an  account  for  a  long  time  will  be  deemed 

to  acquiesce  in  it 413 

the  terms  of  an  account  are  not  conclusive,  where  fraud  or  extreme 

injury  can  be  shown 413 

manner  of  proceeding  when  a  decree  for  an  account  issues  .     .     .     .     414 
prior  settlement  by  parties  to  be  taken  as  starting-point      ....     414 
must  be  continued  until  the  day  on  which  it  is  made,  or  until  a  pre- 
vious dissolution 414 

a  rule  prescribing  the  method  of  making  up  an  account 415 

method  of  stating 416 

interest  when  allowed  in 417 

return  of  premium  when  oi-dered 418,  419 

sale  of  assets  when  decreed  in  suit  for 4i?0 

ACCOUNT   STATED, 

demand  of  partner  against  partner  founded  upon  a  balance  of      .     .     193 


INDEX.  581 

_  Section 

ACCOUNT    STATED  —  Continued. 

general  rule  as  to 193 

agreed  upon  between  a  surviving  partner  and  the  representative  of  a 

deceased  one,  effect  of 193  » 

as  a  final  balance 194 

an  express  promise  to  pay  balance  of  one  is  not  necessary  ....     194 

not  necessarily  a  final  balance 194 

all  the  partners  must  be  bound  by 194 

not  necessarily  a  general  balance 194 

law  as  to,  in  V'ermont 194  n. 

law  as  to,  in  Illinois 194  n. 

effect  of,  whether  settlement  obtained  by  consent,  by  law,  or  by 

arbitration 195 

where  it  did  not  embrace  all  the  debts,  effect  of 195 

declared  on,  action  not  sustained  by  a  balance  struck  by  one  partner 

williout  the  consent  of  his  copartner 195 

outstanding  debts  of  themselves  will  not  necessarily  defeat  an  action 

upon 195 

where  there  is  a  mistake  in  one 196 

where  expenses  are  incurred  by  some  of  the  partners  on  account  of 

the  old  firm,  subsequently  to  declaring  an 196  n. 

where  after  settlement  and  dissolution,  one  partner  is  obliged  to  pay 

a  claim  not  included  in  settlement,  he  may  recover  in  assumpsit 

against  copartner  .      .  196  n. 

where  one  partner  covenants  with  another  that  he  will  account    .     .     197 

assumpsit  will  lie  between  partners  for  an 197,  407  n. 

retained  by  a  partner  without  objection,  assent  and  promise  will  be 

implied - 413  n. 

ACCOUNTANTS, 

notion  of  partnership  held  by 3 

ACCOUNTS, 

books  of,  when  evidence  against  the  firm 129 

of  the  firm  should  be  kept,  how 154 

may  be  examined  at  the  pleasure  of  each  partner 154 

balance  of,  presumed  to  be  adverse  to  partner  whose  duty  it  is  to 

keep  them 154  n. 

provisions  as  to 167 

where  contained  in  articles =     167 

when  the  articles  may  provide  a  method  of  closing 167 

when  reopened  after  settlement 167 

ACT   OF   BANKRUPTCY.     (See  Bankruptcy.) 
ACTION, 

cannot  be  brought  by  that  partner  alone  in  whose  name  the  partner- 
ship business  is  transacted 98 

all  actual  partners  must  be  made  co-plaintiffs 98 

ACTIONS, 

against  a  firm  must  he  brought  against  all  the  partners,  by  name 

including  the  bankrupt,  unless  he  has  been  discharged     .     .     .     375 

effect  of  death  of  partner  upon 249 

against  dormant  partner,  whether  barred  by  former  recovery  against 

co-partner ^1 


682  INDEX. 

Section 
ACTIOl^S—  Continued. 

for  the  recovery  of  debts  due  to  the  firm  in  case  of  bankruptcy  of 
a  partner,  are  brought  by  solvent  partners  and  the  assignees  of 

the  bankrupt 375 

do  not  abate  by  the  bankruptcy  of  the  plaintiff 375  n. 

ACTIONS   AGAINST   PARTNERS, 

non-joinder  of  a  dormant  partner 202 

(See  Of  the  Rkmkdies  of  Third  Persons  against  the  Part- 
nership AND  against  Partners,  Ch.  X.) 
(See    Of    Remedies    by   Partners    against    Third    Parties, 

Ch.  IX.) 

ACTIONS  BETWEEN  FIRMS  HAVING  A  COMMON  MEMBER, 

cannot  be  maintained  at  law 200 

an  indorsee  of  one  of  the  firms  may  maintain  an  action  against 

the  other 231 

after  the  death  of  the  common  member 201,  231 

in  case  of  a  dormant  or  secret  partner 202 

ACTIONS  BETWEEN   PARTNERS, 

may  be  brought,  when 185  et  seq. 

on  contracts  arising  before  the  partnership 187 

on  contracts  arising  after  the  termination  of  the  partnership    .     .     .     188 
may  be  brought  for  causes  originating  in  the  relations  of  partners 

to  third  parties  after  dissolution 188  n. 

•  "where  transactions  are  separated  from  partnership  affairs  .  .  .  .  190 
where  the  transaction  is  entered  upon  the  partnership  books  .  .  .  190 
■where  there  has  been  a  breach  of  an  express  stipulation  between 

partners ...191 

where  a  partner  gives  his  copartner  a  sum  of  money  for  a  specific 

purpose 192 

for  contribution 198 

for  contribution  in  a  transaction  separate  from  tbe  accounts  of  the 

firm 198  «. 

contribution  cannot  be  claimed  by  one  partner  for  payment  for  a 

tort 198  n. 

(See  Of  the  Rights  and  Duties  of  Partners  between  them- 
selves, Ch.  VII.) 
ACTIONS   BY   PARTNERS, 

names  of  all  the  partners  must  be  set  forth 200 

non-joinder  of  a  dormant  partner 202 

wheie  both  ostensible  and  secret  sue  on  a  partnership  contract     .     202  n. 
all  who  were  partners  at  the  time  a  debt  was  contracted  must  join 

to  recover  it 235 

as  to  partners  who  leave  the  firm 235 

as  to  new  partners 235 

where  one  member  of  the  firm  is  an  alien 232 

where  the  cause  of  action  arises  during  war 232  n. 

where  one  of  the  partners  resided  in  the  enemy's  country  during 

the  war 232 

where  by  the  law  of  a  foreign  country  a  husband  and  wife  may  be 

members  of  a  firm 233 

effect  of  death  of  partner  upon 249 


INDEX.  583 

Section 
ADMINISTRATORS, 

of  a  deceased  partner  putting  assets  they  have  in  their  own  hai)ds 
into  the  liands  of  the  surviving  partners  to  trade  with,  are  re- 
sponsible for  any  loss  occurring 356 

ADMISSIONS.     (See  Keprksextations.) 

ADOPTION.      {See  Partners,  Representation's  and  Admissions, 

Joint  Debt,  Incoming  Partner.) 
ADVANCES   BY   A   PARTNER, 

provisions  for,  in  articles,  effect  of 166 

right  to  interest  on 156 

rate  of  interest  on 157 

ADVENTURE.     (See  Partnership.) 
AFFAIRS   OF   PARTNERSHIP, 

partners  may  sue  each  otiier  on  affairs  not  connected  with  the  part- 

nersliip 186 

AFFIDAVIT.     (See  Limited  Partnership.) 
AGENCY, 

distinction  between,  and  partnership 46 

(See  Agent,  and  Authority  of  Partners.) 
AGENT, 

for  whom  a  partner  acts  as 5 

not  partner  because  of  sharing  profits 69 

power  of  partner  to  appoint 119 

authority  of  one  partner  to  act  upon  appointment  of  firm  as    .     .     .     119 

AGREEMENT  BETWEEN  PARTNERS, 

to  admit  new  partner 9 

that  one  shall  not  engage  in  the  same  business  on  his  own  account  .  168 

where  a  partner  violates  such  agreement 168 

under  seal 191 

to  exempt  a  retiring  partner  from  liabilitv',  effect  of 324 

where  creditors  become  parties  to,  for  consideration 324 

as  to  what  property  shall  belong  to  one  or  another,  in  case  of  dis- 
solution, will  be  valid 324 

(See  Articles.) 

AGREEMENT   TO   ENTER  INTO   PARTNERSHIP, 

requisites  of 6 

construction  of 6 

not  necessarily  express 7 

executory 12 

specific  performance  of,  may  be  decreed  in  equity     .     .     163,  205,  205  n. 
'  action  at  law  upon 191  n. 

ALIEN, 

can  be  a  partner  if  a  friend        22 

when  the  property  is  real  estate 22 

cases  in  which  equity  interferes,  in  a  country  where  an  alien  could 

not  hold  land 22 

if  one  of  many  partners  hold  the  title  and  there  were  no  aliens    .     .  22 

otherwise  as  to  alien  enemies 22 

war  suspends  a  partnership  with  an  alien  friend    .......  22 

in  what  cases  peace  revives  the  partnership 22 


584  INDEX. 

Section 
ALIEN  —  Continued. 

cannot  bring  an  action  in  a  court  of  a  hostile  country  ....  22,  232 
citizens  resident  in  a  foreign  country,  when  considered  aliens  .  .  22 
a  firm  consisting  wholly  of  aliens  may  bring  personal  actions  in  this 

country  by  means  of  an  agent 22 

partnership  formed  by  husband  and  wife  in  a  foreign  country  in 

which  it  could  exist,  effect  of  here 22,  233 

ALLOWANCE.     {See  Rights  of    Partnp:rs,    Surviving  Partners, 

AND  Compensation.) 
ALTERATIONS.     {See  Articles  of   Partnership,  and  Change   in 

THE  Partnership.) 
ANNUITANT, 

not  partner  because  of  sharing  profits 72 

APPEARANCE, 

may  be  entered  in  an  action  by  one  partner 118 

APPOINTEE, 

of  a  partner  under  a  power  of  appointment  must  assume  that  rela- 
tion by  his  own  act 354 

and  consent  will  not,  generally,  be  assumed  from  mere  silence  .  .  354 
a  rule   in   equity  that  he  has  a   right   to  inspect  the  books  and 

accounts  of  the  partnership  before  making  his  election     .     .     .     354 
APPROPRIATION   OF   PAYMENT, 

when  the  right  of  debtors 330 

when  the  right  of  creditors 330,  332 

when  the  act  of  law 330 

by  the  creditor  is  not  conclusively  exercised  by  entries  in  his  book, 

if  not  communicated  to  the  other  party 330 

a  retiring  partner  not  bound  by  a  fraudulent 331 

fraudulent  exercise  of 331 

when  it  becomes  a  matter  of  law 333 

when  the  new  firm  for  adequate  business  causes  appropriate  the 

funds  of  the  old  firm  to  the  payment  of  new  debts 333 

when  the  paying  party  makes  no  appropriation 332 

where  made  by  the  creditor  in  expectation  of  the  insolvency  of  the 

new  firm 332 

where  not  made  by  the  creditor  until  he  had  heard  of  the  insol- 
vency of  the  new  firm,  and  then  made  so  as  to  hold  the  retiring 

partner 332 

no  person  allowed  to  change,  for  his  own  benefit,  an  appropriation 

once  made  by  him 332 

when,  may  be  implied  from  the  payments  themselves 333 

when  the  right  of  election  as  to,  applies 334 

when  a  person  has  an   account  with   a  banking  firm  which  is  dis- 
solved, and  his  account  continues  as  before 334 

the   doctrine  of   appropriation   applies    only  where  the  debts  and 
accounts   are  distinct  in  themselves   and  so  regarded  by  the 

parties 334 

effect  upon,  of  the  ownership  of  the  money  paid 334 

■when  debtors  commit  a  breacli  of  trust  in  respect  to  certain  property, 
and  afterwards  make  payment  generally  on  account  of  their 

creditor,  who  is  ignorant  of  the  breach  of  trust 335 

must  be  to  legal  and  not  illegal  demands 335 


INDEX.  585 

Section 
APPROPRIATION   OF  PROPERTY   TO   A  PART^'ER, 

provisions  for 175 

where  agreed  that  certain  property  used  by  the  firm  shall  belong  to 

one  partner 175 

with  reference  to  the  creditors  of  the  firm ,     .  175 

of  property  held  forth  as  partnership  property 175 

ARBITRATIOX, 

one  partner  cannot  bind  the  partnership  by  an  agreement  to  refer   .  121 
where   all   the   partners   agreed  to   submit  a  question,  and  after- 
wards refused,  there  might  be  a  remedy  either  in  equity  or 

at  law 121 

submission  by  unsealed  agreement  of  one  partner   held  in   some 

States  to  be  valid 121 

provisions  in  articles  for ,     .     .     .     .  170 

ARBITRATORS, 

have  no  power  to  award  a  dissolution 365 

ARTICLES   OF    COPARTNERSHIP, 

provision  of,  as  to  admission  of  partners      .........  9 

are  usually  entered  into 41 

power  of  partner  when  limited  by  provisions  of 84  n. 

provision  in,  for  transfer  of  share  by  partner    .     .     .     .     o     .     .     .  107 

usually  exist  in  writing 159 

where  the  partners  have  none 159 

not  any  difference,  whether  spoken  or  written,  in  their  effect  and 

operation 159 

third  parties  not  affected  by  them  until  notice 160 

bind  only  partners  and  others  having  notice 160 

principles  of  construction  of 161 

to  be  interpreted  in  connection  with  rules  of  Law  of  Partnership      .  161 
when  courts  of  equity  will  refuse  to  carry  into  effect  minor  stip- 
ulations in  ...     . 161  71. 

when  bill  for  specific  performance  of,  lies 162 

where  the  act  required  is  a  legal  obligation  created  by  law       .     .     .  16ii 

provisions  in,  that  have  never  been  acted  upon 164 

waiver  of  provisions  in 1^"1 

construed  strictly  in  relation  to  any  material  change  in  the  business  164 

may  be  modified  by  consent 164 

modification  of,  may  be  proved  by  long  course  of  dealing  ...      164  n. 

renewal  of      . ^^'^ 

provisions  in,  for  advances 1''^ 

for  payment  of  capital l*^'' 

as  to  accounts l*j' 

for  giving  time  and  skill  by  partner 168 

excluding  some  specific  business   .     « 168 

for  dissolution  ....     =     ...•           1^9 

for  expulsion  of  a  partner 169  ;*. 

for  arbitration ^'^ 

for  power  of  majority 1'^ 

for  division  of  profits 1 ' - 

for  sharing  of  loss ^'^ 

for  liquidated  damages  for  misconduct  of  partner     ....  174 


5186  INDEX. 

Section 
ARTICLES   OF   COPARTNERSHIP— Con/mwer/. 

provisions  in,  for  appropriations  of  property  to  a  partner      .  175,  179 

respecting  firm-name 176 

when  sealed,  covenant  may  be  brought  upon  them 191 

bill  for  specific  performance  of .  205,  205  n. 

provisions  in,  for  continuing  busuiess  after  decease  of  partner     .      313  n. 

form  of Appendix 

{See  Partnership.) 
ARTISTS, 

partnerships  of 37 

ASSIGNEE    OF    A   FOREIGN    FIRM, 

possession  by,  v^-ould  prevent  an  attachment  or  levy  on  the  property 

of  the  firm  in  this  country 371 

ASSIGNEES, 

for  benefit  of  creditors,  not  partners ...       73 

may  lose  their  claim  against  a  retiring  partner  for  debts  due  froin 

the  tlrm.  by  making  themselves  responsible 379 

under  a  commission  of  bankruptcy,  employing  an  agent  to  receive 

money,  if  he  embezzle  it,  may  be  liable  to  make  it  good,  unless 

he  consulted  the  body  of  the  creditors  in  the  appointment  .  379  n- 
of  a  bankrupt  partner  take  only  his  interest  in  the  joint  property  .  385 
of  a  firm  take  both  the  firm  property  and  the  several  property  of  the 

partners 385 

of  a  bankrupt  partner  may  claim  unpaid  instalments  due  from  a 

solvent  partner  for  his  admission  into  the  firm 402 

under  a  separate  commission  take  only  such  undivided  interest  as 

the  bankrupt  himself  had,  and  in  the  same  manner  as  he  held  it  402 
of  a  stockholder  in  an  insolvent  corporation  succeed  to  the  rights  of 

their  assignor 435  n. 

ASSIGNEES   OF   A    BANKRUPT    PARTNER, 

do  not  become  partners  in  his  stead 9,  370 

become  tenants  in  common  with  the  other  partners 370 

may  claim  an  account,  and  require  a  settlement  of  the  concern    .     .  370 

cannot  take  the  business  in  their  own  hands  and  settle  it   ...     .  370 
have  much  the  same  rights  and  remedies  as  the  representatives  of  a 

deceased  partner 370 

cannot  bring  trover  against  the  partners  for  the  partnership  effects  .  370 
may  hold  the  partnership  effects  as  well  as  the  solvent  partners,  all 

being  equally  entitled  to  possession 370 

ASSIGNING   PROPERTY, 

must  be  done  in  the  regular  business  of  the  firm 108 

that  a  partner  has  not  power  to  assign  property  of  the  firm  in  any 

unusual  way 109 

the  firm  being  insolvent,  may  a  partner  assign  all  the  property  in 

trust  to  pay  creditors 110 

ASSIGNMENT, 

effect  of,  by  a  partner  of  his  interest  in  a  copartnership     ....     106 

gives  the  assignee  a  right  to  insist  on  an  account 106  n. 

(See.  DiLECTUS  Persoxarum.) 
by  one  partner  of  all  his  interest,  effect  of    ........     .     305 

does  not  operate  as  a  dissolution  of  copartnership      .     .     304,  305,  306  n. 


INDEX.  587 

Section 
ASSIGNMENT   FOR  BENEFIT   OF   CREDITORS, 

power  of  partner  to  make 110,  110  n. 

power  of  surviving  partner  to  make \\\  n. 

whether  separate  estates  of  partners  must  be  included  in       .     385,  385  n. 
how  to  be  made 385  n. 

ASSIGNMENT    OF    PROPERTY   OF    FIRM, 

right  of 108 

right  of  every  partner  to  assign  in  the  regular  business  of  the  part- 
nership absolute .     108 

ASSOCIATIONS, 

other  than  partnerships 437 

ASSUMPSIT, 

action  of,  will  lie  between  partners  where  a  balance  of  accounts  is 

struck 407  n. 

ATTACHMENT, 

exemption  of  partnership  property  from  .     .     .     .     o     .     .     .  252,  265  n. 
by  a  creditor  of  a  partner  of  his  interest  in  the  firm  property     258,  258  n. 

of  pai-tner's  interest  does  not  operate  as  dissolution 304,  305 

of  a  partner's  interest  suspended  by  bankruptcy 374 

■would  not  be  suspended  wliere  a  foreign  firm  went  into  bankruptcy 
abroad,  and  a  creditor  of  one  of  the  partners  attached  his  inter- 
est in  this  country 374 

would  be  prevented  if  the  foreign  assignee  had  taken  possession  of 

the  property     . 374 

ATTORNEYS, 

firm  of,  is  non-trading 85  n. 

AUTHORITY.     {See  Power  of  Partner.) 

of  partner  to  bind  firm,  how  limited 83  e<  seq. 

AVOIDANCE, 

of  partnership  by  infant,  effect  of «       17 

AWARD   OF   ARBITRATORS, 

cannot  of  itself  effect  a  dissolution «     .     365 


B. 


BALANCE   OF  ACCOUNT.     {See  Account.) 
BANKERS.     {See  Joint-stock  Companies.) 

BANKRUPT   PARTNER, 

assignee  of,  not  a  partner 9 

discharge  of,  does  not  affect  indebtedness  of  other  partners  ex- 
cepting as  to  the  sura  which  the  creditor  takes  by  way  of 
dividend 376 

where  made  defendant  in  an  action  against  the  firm  after  his  dis- 
charge, may  have  judgment  against  the  plaintiff 376 

taking  up  the  notes  of  the  firm  after  getting  his  certificate  is  per- 
mitted to  prove  against  the  joint  estate 376  n 


588  INDEX. 

Section 
BANKRUPTCY, 

assignees  of,  take  only  his  interest  in  the  joint  property      ....  385 

fiat  of,  against  infant  void 17 

power  of  one  partner  to  act  for  firm  in  proceedings  in    .     .     .       118,  123 

when  and  how  it  dissolves  a  partnership  .  .  301  n.,  304,  366,  367,  371 
in  England,  dissolution  does  not  take  place  until  bankruptcy  has 

been  declared  by  competent  authority 367 

in  this  country  dissolution  takes  place  when  the  assets  are  vested 

in  the  hands  of  the  assignee 367 

reason  of  dissolution  because  of 368 

where   there   are  no   statutes  of  insolvency,  inability  and   refusal 

to  pay  debts  does  not  of  itself  operate  a  dissolution  ....  368 
acts   upon   a   partnership    in    many   respects    like    death    of   the 

partners        .....     =     ...<. 369 

assignee  of  bankrupt  partner  does  not  become  partner 370 

may  claim  account 370 

cannot  take  charge  of  business 370 

becomes  tenant  in  common  with  other  partners 370 

of  one  partner  where  other  partners  are  solvent,  effect  of,  on  the 

solvent  partners 370 

property  rights  and  interests  of  a  bankrupt   partner  pass   to  his 


assignees 


370 


effect  of  a  provision  in  the  articles  that,  in  case  of,  the  others  shall 

take  his  share  at  a  valuation  and  continue  the  business    .     .     .     371 
notice  of,  not  necessary  to  prevent  the  partner  from  being  bound 

by  new  debts 372 

annuls  any  attachment  or  execution  of  his  interest  in  the  firm     .     .     374 
foreign,  would  not  suspend  the  attachment  or  levy  on   the   inter- 
est of    the   partnership   property,    found   and   attached   here, 

before  possession  taken  by  foreign  assignee 374 

parties  to  suit  by  or  against  firm  after  one  partner  becomes  bank- 
rupt      375 

where  all  the  partners  of  a  firm  become  bankrupt,  the  discharge  of 

one  affects  only  himself 376 

of  a  plaintiff,  his  assignees  may  continue  an  action  in  his  name  .     .     376 
where   actions   for   the   recovery   of    debts    due    to    the    firm    are 
brought   by    the   solvent   partners   and   the   assignees    of    the 

bankrupt 375 

operates  a  discharge  of  an  execution  against  the  partnership  .     .     .     376 
a  decree   of,  in    England,  goes   back  by  relation   and    makes   the 

bankruptcy  effectual  from  the  first  act  of   .......     .     377 

power  over  assets  of  solvent  partner 377 

copartner  cannot  prove  debt 378,  379 

except  in  case  of  fraud 380 

no  proof  in,  between  firms  having  a  common  member 381 

of  a  partnership  in  case  of,  joint  property  forms  a  fund  for  joint 
creditors,  and  separate  property  of  each  partner,  a  several  fund 
for  the  private  creditors  of  each     382,  382  n.,  383,  383  ?r.,  385,  384  n. 
of  a  partnership,  all  the  firm  property  and  all  the  several  property 

of  the  partners  goes  to  the  assignees 385 

proof  in,  by  secured  creditors 386 

distinction  between  joint  and  separate  creditors 387 


INDEX.  589 

Section 
BANKRUPTCY  —  Continued. 

a  creditor  of  the  firm  taking  several  notes  from  the  partners  has 

no  rights  as  a  partnership  creditor 388 

whether  joint  and  separate  creditors  of  partners  must  elect        390,  390  n. 

on  what  assets  holder  of  note  signed  by  all   partners   is   entitled 

to  come 398 

right  of  joint  but  not  partnership  creditors  in  assets 391 

what  are  joint  and  what  separate  assets  in 392 

whether  assets  are  joint  or  separate  may  be  determined  by  appro- 
priation of  property 393 

where  a  partner  takes  property  from  the  firm,  and  bankruptcy 
ensues,  the  property  so  taken  will  be  held  to  satisfy  any 
balance  due  from  the  partner  to  the  firm 392 

rule  of  appropriation  of  funds  where  the  firm  and  all  the  partners 

are  bankrupt 394 

in  case  of,  where  property  appears  either  in  the  separate  estate  of  a 
partner  or  the  joint  estate  of  the  firm  to  have  been  abstracted 
from  the  otlier,  it  must  be  restored 394 

partner  cannot  compete  with  firm  creditors  in 399,  399  n. 

nor  can  creditors  of  partner,  with  regard  to  partnership  assets     .     .     399 

where  the  joint  estate  is  larger  at  time  of,  on  account  of  any 
fraudulent  act  against  one  of  the  partners,  his  several  cred- 
itors may  proceed  against  it  for  that  amount        399 

proof  against  what  estates,  in  case  of  dormant  partner     .....     400 

of  two  firms  with  common  members,  one  set  of  creditors  may  com- 
pete with  the  other 401 

partner  has  precedence  in  distribution  of  firm  assets  in,  over  cred- 
itors of  copartner       402 

if  any  contracts  or  enterprises  are  outstanding  at  the  time  of, 
the  assignees  must  wait  until  they  are  adjusted,  and  take 
the  share  of  the  bankrupt  in  the  result 402 

right  of  assignee  in,  to  continue  business 404 

sale  of  the  effects  in,  usual  course  adopted  by  assignees       ....     405 

BEGINNING, 

of  partnership,  time  for       12 

of  partnership  formed  without  express  agreement 12 

of  liability 92 

BEQUEST, 

of  interest,  in  firm  does  not  make  legatee  partner 106 

BILL    FOR   ACCOUNT.     {See  Accouxt.) 

BILL   OF   EXCHANGE, 

parol  acceptance  by  partner  good 97  n. 

{See  Nkgotiable  Paper  ) 
BONDS, 

"  trusts  "  to  invest  in        440,  445 

BOOKS   OF   PARTNERSHIP, 

whether  admissible  as  evidence  of  partnership 78 

received  in  evidence  of  account 414 

not  conclusive 414  n. 


590  INDEX. 

Section 
BOVILL'S  ACT, 

effect  of > 45 

BROKER, 

not  pai  tner,  because  of  sharing  profits 69 

BURDEN   OF   PROOF    OF   PARTNERSHIP 78 

BUSINESS, 

"  tiusts '' to  carry  on 443,446 

BUSINESS    OF   FIRM, 

cannot  be  varied  by  one  partner 130 


c. 

"CABLES'   TRUST" , 440 

CAPITAL, 

contributions  of 63 

may  consist  of  right  to  use  property 63 

agreement  to  contribute 166 

collection  of ,  by  means  of  "  trust  " 438 

(See  Partnership  and  Property  of  Partnership.) 

CAR  TRUSTS » 441,  445 

CARE    AND   SKILL   AND   TIME, 

provisions  for  giving,  to  the  partnership 168 

(See  Partnership.) 

CARRIERS, 

association  of,  whether  partnership 75 

liability  of  one  of  firm  of ,  for  tort  of  copartner 105 

agreements  between 444 

CERTIFICATE   OF   LIMITED   PARTNERSHIP, 

contents  of 424 

publication  of     .     » 429,  429  n. 

defects  in 429 

CERTIFICATE    HOLDERS, 

of  a  trust,  position  of        445,  446,  447 

CESTUI   QUE   TRUST, 

of  partner,  liability  of 447 

(See  Trustee.) 

CHANGE    OF   BUSINESS, 

can  be  only  by  consent  of  all  partners 164 

CHANGE  IN  THE  PARTNERSHIP,  Ch.  XIII.   (See  Partnership.) 

effect  of  (Sec.  I) „ 311 

by  the  retirement  of  a  partner 311 

causes  dissolution , 312 

by  the  death  of  a  partner 342 

discharges  bonds  and  other  contracts ,     236 

CHARITABLE    ASSOCIATIONS, 

not  partnerships .     .     ^ 60 

CHOICE   OF   COPARTNER, 

right  of  partner  to 106 


INDEX.  591 

Section 

CIRCUMSTANTIAL  EVIDENCE, 

may  prove  partnership 78 

CLERGYMAN, 

may  not  be  partner  in  England 14  n. 

CLUBS, 

not  partnerships 37n.  ,60 

COL\, 

partnership  to  make  false,  illegal 8 

COMBINATIONS, 

between  carriers 444 

of  corporations,  illegal 450 

in  restraint  of  trade,  illegal 451 

to  affect  necessaries  of  life,  illegal        -451^ 

statutes  forbidding 454,  455 

COMMERCIAL   PARTNERSHIPS 37 

COMMERCIAL   SECURITIES, 

"trusts  "  to  invest  in 440,445 

COMMERCIAL   "TRUSTS" 443,446 

COMMISSION, 

obtained  by  partner  in  partnership  transaction  inures  to  benefit  of 

firm 152 

COMMON   MEMBER, 

note  issued  by  one  of  two  firms  having 140 

no  action  at  law  between  firms  having 200,  381 

bill  in  equity  lies  between  liims  having 200,  381 

effect  of  death  of,  in  suit  between  firms  having 201,231 

action  between  firms  having,  when  the  common  member  in  one  is 

dormant  or  nominal        202 

action  on  mercantile  paper  given  by  one  firm  to  another  having  .     .     231 
no  proof  in  bankruptcy  between  firms  having 381 

COMMUNITY   OF   INTEREST.     {See  Pahtxers,  Partnership.) 
must  exist  in  the  property  or  proceeds  resulting  from  joint-doing,  to 

make  that  partnership  property 58 

may  be  in  profits  only,  and  not  in  property 63 

COMPANY.     (See  Joint-stock  Companies.) 

COMPENSATION, 

of  a  partners  right  to  extra 155 

after  dissolution,  partners  who  close  up  the  affairs  of  the  concern, 

in  general,  not  entitled  to        155  n. 

where  provided  for  by  the  articles 155 

where  one  partner  is  exempted  by  the  articles  from  rendering  his 

services  to  the  joint  business 155  n. 

COMPETENCY, 

of  persons  to  form  partnership 11,  14 

CONDITIONAL    AGREEMENT    FOR   PARTNERSHIP, 

effect  of 12 

CONDUCT, 

which  partners  may  require  of  each  other 150 

CONFLICT   OF   LAWS, 

rule  of,  as  to  allowing  su<t  by  partnership  of  man  and  wife     .     .     .     233 


592  INDEX. 

Section 
CONSENT   OF   PARTNERS, 

necessary  to  partnership 9 

CONSIDERATION, 

debt  of  one  partner  sufficient  to  sustain  a  promise  of  partnership 

to  pay  it 142 

where  a  creditor  agrees  with  a  firm  to  discharge  a  retiring  partner, 

the  mere  inadequacy  of  the,  cannot  be  inquired  into    ....     325 

a  new  partner  is  not   liable  for  old  debts   of   the  firm,  unless   he 

assumes  them  for 336 

admission  into  the  firm  sufficient,  to  bind  a  new  partner  for  the 
old  debts  of  the  firm,  to  those  from  whom  the  consideration 
comes 336 

must  be  shown  for  a  creditor  giving  up  a  claim  on  the  firm  and 

accepting  a  claim  on  one  partner 389 

CONSTRUCTION   OF   CONTRACT   OF   PARTNERSHIP    ...         6 

CONTINUATION  OF   PARTNERSHIP.     (See  Articles  of  Part- 
nership.) 

CONTRACT  OF  PARTNERSHIP      (See  Partnership,  Articles  ) 

CONTRACTS, 

power  of  one  partner  to  bind  the  firm  by 115 

between  partners  arising  before  the  partnership 187 

between  partners  arising  after  the  partnership 188 

of  partners  under  seal       ...  237 

where  a  deed  is  substituted  for  a  simple  contract 237 

made  with  one  partner  for  the  benefit  of  the  firm 238 

when  the  partner  entering  into  the  contract  may  sue  alone      .     .     .     238 

by  a  partnership  for  insurance 239 

with  a  firm  may  be  exchanged  for  another,  only  by  consent  of  all 

parties 240 

between  the  new  partner  and  the  old  firm  that  the  new  partner  shall 
become  responsible  for  the  old  debts  of  the  firm,  valid  between 

the  partners,  but  not  valid  as  to  the  creditors 336,  337 

CONTRIBUTION, 

demand  for 198,  198  n. 

professional  jjartnership  not  distinguished  here  from  trading  part- 
nership         198  n. 

when  claimed  for  some  transactions  separate  from  the  partnership 

accounts 198  n. 

can  be  claimed  only  for  an  actual  payment  of  a  joint  debt  .     .     .     198  n. 
whether  it  may  be  maintained  by  one  partner  against  his  copartner 

for  payment  of  judgment  founded  on  a  tort 105, 198  n 

CONVERSION.     (See  Trover.) 
COPARTNERS.     (See  Partners.) 
COPARTNERSHIP, 

form  of  articles  of Appendix 

(See  Partnership.) 
COPYRIGHTS, 

may  be  held  by  partnership 182 


INDEX.  593 

Section 
CORPORATION, 

cannot  be  partner 24,  450 

may  be  empowered  by  charter  to  form  partnership    ......       24 

defective  liability  of  stockholders  in ,     .     .     .     56,  57 

used  for  purposes  of  "  trust  "    ..."....„.,.,     439 

may  sell  assets  to  "  trust  " 450 

COSURETY.  (See   Surety.) 
COUNTERFEIT  BILLS, 

partnership  to  make,  illegal  ,     •     .     .     .  ..,,....         8 

COURTS   OF   EQUITY, 

will  interfere  in  case  of  dissolution,  when  and  how    .     .     .     »     .     .     295 
(See  Equity  ) 
COVENANT, 

with  one  partner  not  to  sue  him  will  not  discharge  his  copartners     116  Ji. 
CO  V' EN  ANT,    ACTION    OF, 

when  it  will  lie  between  partners      .     .     »     .     ,     „ 191  n. 

CREDIT, 

when  given  to  one  partner  only      ,...., 88 

where  partners  agree  that  one  shall  purchase  goods,  and  then  let  the 

others  into  an  interest  in  them 88  n. 

where  there  is  no  evidence  to  show  to  whom  credit  was  given      .     .       88 
where,  for  money  borrowed,  a  partner  gives  his  own  bill  or  note      .  88  n. 
where  the  creditor  sold  goods  or  loaned  money  to  the  several  part- 
ners on  their  several  credit      ............       88 

to  exonerate  other  partnei's,  must  be  given  knowingly  and  voluntarily 

to  one  or  more  exclusively  .........  .     .       88 

where  given  to  one  partner  only,  same  rule  applies  to  all  simjile  con- 
tracts, whether  oral  or  written 88 

question  as  to  whom  given,  one  of  fact  for  a  jury      .     .     .     .     c     .  88  n. 
where  a  creditor  accepts  the  individual  security  of  a  partner  instead 

of  the  debt  of  the  firm , 89 

where  a  partner  uses  the  credit  of  the  firm  for  his  personal  advantage, 

without  anthority 90 

CREDIT-MOBILIER  .  ' 439 

CREDITOR   OF   A   FIRM, 

not  partner  because  of  sharing  profits 70 

may  sue  all  the  firm,  notwithstanding  stipulations  between  the  part- 
ners exempting  some 87 

who  became  one  without  knowledge  of  agreement  to  exempt,  may 

levy  execution  on  goods  of  partner  exempted      ......       87 

taking  from  one  partner  of  a  firm  security  of  a  higher  nature  than 

the  debts,  when  it  discharges  the  firm 89 

whether  intended  to  accept  the  sole  liability  of  a  partner  in  discharge 

of  a  joint  debt  of  the  firm,  for  a  jiiiy  to  decide    .     .     .     .     o     .       89 
where  security  of  same  class  with  joint  security  is  accepted  by     .     .       89 

power  of  partner  to  assign  for  benefit  of  >   110,  110  n. 

how  far  entitled  to  assets  of  firm  until  debts  are  paid 175 

lien  of,  on  property  of  firm 246 

right  of,  to  proceed  against  partner     .     .     .     ,  253 

right  of,  in  real  estate  of  partnership 276,  276  n. 

agreement  of,  to  discharge  some  members  of  the  firm 298 

38 


594  INDEX. 

Section 
CREDITOR   OF   A  FHXM  —  Continued. 

rights  of,  as  to  retiring  partner 324 

(^'ee  Retiring  Pautner.) 
not  affected  by  private  arrangements  upon  dissolution   ....  297,  325 

effect  of  consent  of,  to  receive  partner  as  debtor 325,  32(j 

what  amounts  to  consent 326,  327,  328 

transfer  by  one,  of  an  account  against  a  firm,  to  the  private  account 

of  one  partner,  without  the  knowledge  of  the  firm   .          .           .     326 
accepting  paper  of  tiie  new  firm  for  a  debt  of  the  old,  witli  knowl- 
edge of  the  retirement  of  a  partner 326 

what  consideration  necessary  for  a  release  to  a  retiring  partner     .     .     326 

taking  new  security  and  retaining  the  old 327 

where  he  gives  the  evidence  of  his  debt  to  one  of  the  partners,  that 

he  may  collect  it  from  the  others 327 

retaining  expressly  all  his  rights  against  the  retiring  partner  .     .     .     327 

effect  of  silence  on  part  of     ... 328 

appropriation  of  payments  by,  upon  change  in  firm 332 

right  of,  to  assets  after  decease  of  a  partner 348  n. 

must  bring  actions  only  against  surviving  partners 349 

right  of,  to  proceed  against  estate  of  deceased  partner  ....  350  n. 
rights  of,  not  affected  by  any  disposition  of  his  property  by  a  deceased 

partner 3.35 

when  delay  on  the  part  of,  will  be  considered  as  a  confirmation  of 

the  provisions  of  a  deceased  partner      .  355 

have  no  claim  on  the  assets  of  a  deceased  partner  for  any  debts  con- 
tracted after  his  death,  except  what  lie  expressly  places  in  the 

new  partnership    .  355 

dealing  with  the  firm  after  the  death  of  a  partner,  have  only  security 
on  the  property  of  the  deceased  partner  for  the  amount  lie  places 

in  the  new  firm 355 

may  lose  his  claim  against  a  retiring  partner  for  firm  debts  by  the 

assignees  making  themselves  responsible   .  379 

has  priority  in  distribution  of  joint  estate  in  bankruptcy  .  .  382,  382  n. 
whether  postponed  to  separate  creditors  in  distribution  of  separate 

estate 383,  383  n. 

rights  in  separate  estate  where  no  joint  estate 384,  384  ti. 

effect  of  assignment  for  benefit  of  creditors 385 

what  proof  in  bankruptcy  may  be  made  by  secured 386 

in  case  of   insolvency  of  his  debtor  may  give  up  his  security  and 
prove  his  whole  debt,  or  obtain  what  he  can  from  his  security 

and  prove  the  balance 386,  389 

who  are,  as  distinguished  from  creditors  of  partner    ......     387 

may  have  tlie  partnership  security,  and  also  several  securities  of  the 

partners,  as  sureties  for  the  debt 388 

where  the  liabilit}^  of  the  firm  and  that  of  the  partners  is  concurrent, 

the  creditor  is  bound  to  elect  which  he  will  take 390 

has  precedence  in  distribution  of  firm  assets  over  partner  and  over 

creditors  of  partner 399 

has  no  direct  lien  on  the  partnership  funds  for  his  debts  .  .  .  402  n. 
cannot  file  a  bill  to  stop  a  partnership  and  wind  up  its  concerns  .  408  n. 
right  of,  as  to  real  estate.     (See  Rkal  Estate  of  Partnership.) 

to  proceed  against  partnership  property 254 


INDEX.  595 

Sectiox 
CREDITOR  OF  PARTNER, 

right  of,  to  attach  partner's  interest  in  partnership  property   .      256,  257, 

25S,  258  n. 
to  sell  on  execution  partner's  interest 259,  259  n. 

effect  of  insolvency  of  partnership  upon 201 

garnishment  of  partnersliip  debtor  by 259  n. 

garnishment  of  oilier  partners  by    ...     .  200 

cannot  compete  with  firm  creditors  in  distribution  of  partnership 

assets 399 

CREDITOR  OF   PARTNERS  JOINTLY,   BUT   NOT   OF   FIRM, 

interest  of,  in  firm  property »     .     .     .      248  n. 

right  of,  to  partnership  assets 391 

upon  notes  signed  by  partners  jointly ■398 

CREDITORS   OF    FIRM   A>JD    OF   SEPARATE   PARTNERS, 

how  funds  are  distributed  among  .     .     .     248,  259  n.,  261,  382,  383,  384 

division  of  assets  among,  upon  death  of  partner    ....  350,  350  n. 

joint!}'  and  severally,  must  in  England  elect  which  estate  to  hold      .     390 

but  the  rule  is  different  in  this  country 390  n. 

CREDITORS   OF   FIRMS    WITH   COMMON   MEMBER, 

may  prove  against  each  other 401 

CROP, 

agreement  to  raise  and  divide,  not  partnership 61  n. 

CUSTOM    OF   LONDON, 

married  women  as  traders  under 19 

CUSTOM   OF   MERCHANTS, 

law  of  partnership  based  on 2 

CUSTOM-HOUSE   BONDS, 

Act  of  Congress,  March  1,  1823,  Stat.  2,  ch.  21,  §  25     .     .     .     .      122  n. 


D. 

DAMAGES, 

may  be  recovered  for  a  breach  of  contract  to  enter  into  partnership  .     163 
from  misconduct  of  a  partner,  provisions  for,  in  articles     ....     174 

liquidated 174 

where  in  fact  a  penalty 174 

{See  Liquidated  Damages  and  Penalty.) 
measure  of,  in  action  by  partner  against  copartner  for  fraudulently 

inducing  entrance  into  firm 227 

in   action   for   tort   by   partnership   against   third   per- 
sons    241,242 

exemplary,  when  recoverable  by  firm 242 

DEATH   OF   A   PARTNER, 

disposal  of  good-will  upon      .     .     » 181,  181  n. 

who  was  a  member  of  two  firms  ;  whether  the  bar  to  an  action 

between  them  is  removed         231 

effect  of,  upon  action  by  or  against  a  partnership 249 

distribution  of  partnership  real  estate  upon      ....    272  ?i.,  274,  275 
necessarily  dissolves  ordinary  partnership    .     .     .     .     .     .    299,  342,  343 


696  INDEX. 

Section 
DEATH   OF    A    PARTNER  —  Continued. 

except  where  otherwise  provided  in  articles 343  n. 

does  not  dissolve  mining  partnership 342  n. 

nor  joint-stock  company 343  n. 

effect  of,  upon  rights  of  survivors 344 

upon  contracts  of  firm 344  n 

upon  right  of  creditors  in  the  assets 348  n. 

upon  actions  by  or  against  firm 349 

settlement  of  partnership  upon 350 

notice  of,  not  necessary 351 

liability  of  estate  where  business  is  continued  ....     346,  346  n.,  355 

of  trustee  or  appointee  of  deceased 356 

analogy  between,  and  bankruptcy  of  partner 369 

DEBT   OF    A   FIRM, 

when  discharged  by  release  of  one  partner 116 

may  become  barred  as  to  partners  in  the  State,  and  not  as  to  those 

out  of  it  ...     « 126  n. 

(See  Limitations,  Statute  of.) 
DEBT   OF   ONE  PARTNER, 

incurred  for  the  partnership,  but  before  its  formation,  is  not  the 

debt  of  the  partnership 142 

is  sufficient  consideration  to  sustain  a  promise  of  the  partnership  to 

pay  it 142 

DEBT   OF   SEPARATE   PARTNER, 

the  property  of  the  firm  cannot  be  taken  for 244 

DEBTS, 

power  of  one  partner  to  contract  and  pay  on  behalf  of  firm      .     .     .     116 
power  of  partner  to  receive  payment  of  ...     o     ......     l]|i 

appropriation  of  partnership  pi-operty  to  payment  of      .     .     .     244  el  seq. 

how  the  funds  are  appropriated  to « 382 

what  are  joint  and  what  are  several 387 

when  originally  joint  or  only  several,  and  the  creditor  can  show 
indebtedness  of  the  other  kind  for  the  same  cause,  whether  it 
discharges  the  old   debt  or  is  only  collateral  security    ....     388 

whether,  originally  joint,  have  become  several 388 

whether,  originally  several,  have  become  joint 388 

originally  joint,  afterwards  becoming  several,  and  consent  of  the 
creditor  to  give  up  all  and  retain  only   one,   a  consideration 

for  the  consent  must  be  proved 389 

where  there  is  a  new  and  old  for  the  same  cause,  and  it  is  not  pre- 
sumed that  the  new  has  paid  the  old,  both  co-exist,  and  the 

new  is  considered  security  for  the  old 389 

secured  by  the  specialty  of  one  partner,  when  regarded  as  simple 

contract  debts  and  all  the  partners  bound  by  it 407  n. 

DEBTS   DUE   BY   THE   PARTNERSHIP, 

appropriation  of  the  property  to 244 

DECEASED   PARTNER, 

representative  of,  not  a  partner 9 

right  of  the  representatives  of,  to  have  an  account  taken     ....  348 

settlement  of  the  estate  of  a 350 

estate  of,  settled  entirely  on  equitable  principles 350 


INDEX.  697 

Sectiox 
DECEASED   PARTNER  —  Continued 

whether  a  creditor  may  proceed  at  once  against  the  estate  of  the      .     350 
the  claims  of  the  several  creditors  of,  and  joint  creditors  of  the  firm, 

are  kept  distinct 350 

where  there  is  no  joint  fund  and  the  surviving  partner  is  insolvent, 
the  joint  creditors  of  the  firm  take  of  the  estate  of  the  deceased 

partner  pari  j/assu  with  his  separate  creditors 350 

when  the  estate  of  a,  is  discharged  by  payment  of  the  debt     .     .     .     351 

or  by  a  transfer  of  the  account 351 

notice  of  a  dissolution   by  death  never  necessary  to   protect   the 
estate  of  the  deceased  partner  from  the  future  debts  of  the 

firm 351 

may  hmit  the  amount  or  proportion  of  his  estate  that  shall  remain 

in  the  partnership 355 

where  insolvent,  and  the  administrators  permitted  to  sell  the  stock 
in  the  usual  course  of  trade  for  business  benefit,  and  a  loss 

occurred,  they  w'ere  not  responsible 404 

{See  Death.) 
DECLARATION.      (See  Partners,  Admissions  and  Representa- 
tions OF.) 
DECREE, 

for  dissolution  of  partnership  may  declare   that  the   partnership 

never  existed 357 

(See  Equity.) 

DECREE     OF     DISSOLUTION     FOR     MISCONDUCT     OF     A 

PARTNER     . 357 

■will  be  granted  when  the  conduct  is  of  such  a  nature  as  to  expose 

the  other  partners  to  important  injury 358 

will  not  be  made  for  slight  reasons 358 

cases  in  which  it  would  be  granted 358  n. 

where  the  mischief  complained  of  is  specific  and  a  habit,  the  court 

may  grant  an  injunction  instead  of  a  dissolution 358 

cases  of 359  n. 

DECREE  OF  DISSOLUTION  WHERE   MISCONDUCT  IS  NOT 

CHARGED 359 

for  bankruptcy  or  insolvency 360 

for  any  cause  which  takes  from  a  partner  all  his  ownership     .     .     .     368 
DEEDS, 

where  made  to  the  partnership  by  the  name  of  the  firm      ....     237 
where  substituted  for  a  simple  contract  with  the  same  parties      .     .     237 
DETERMINATION   OF   DIFFERENCES   BY   ARBITRATION, 

provisions  for 170 

DEVISEE, 

of  a  partner,  where  it  is  a  condition  that  he  is  to  become  a  partner 
in  the  firm,  he  must  submit  to  the  condition  and  offer  liimself 

as  partner 354 

DILECTUS  PERSONARUM, 

requisite  for  partnership 9,  9  «. 

must  always  exist,  both  as  to  original  partnership  and  reception  of 

a  new  partner 106 


598  INDEX. 

Section 
DILECTIJS  PERSONA  R  UM  —  Continned. 

a  partner  cannot  transfer  his  relation  of  partner 106 

if  a  partner  bequeaths  his  interest  in  a  firm,  legatee  not  a  part- 
ner      106 

assignees  of  a  bankrupt  partner  not  partners  with  the  other  members 

of  the  firm 106  n. 

not  a  right  of  the  old  partners  only,   but  of   the   proposed   new 

one 106 

where  the  interest  of  one  partner  was  sold  on  execution     ....     257 
none  in  mining  partnership .      306  n. 

DIRECTORS,     (See  Joint-stock  Companies,  and  Notice.) 

DISCHARGE   IN   BANKRUPTCY, 

of  partner,  effect  on  partnership  liability 376 

(See  Bankruptcy,  Bankrupt  Partner,  and  Covenant.) 
DISHONOR, 

of  negotiable  paper  of  firm,  notice  of,  may  be  given  to  one  part- 
ner     101,  146 

(See  Notice.) 
DISSENT, 

of  partner  from  partner's  act,  whether  effectual 84  n. 

(See  Partners,  Rights  and  Duties  of.) 

DISSOLUTION   OF   PARTNERSHIP, 

by  war 22 

by  marriage 20,  301  ?i.,  302 

effect  of  acknowledgment  by  partner  after 128 

waiver  of  Statute  of  Limitations  by  partner  after 127  n. 

admissions  of  partner  after 128 

issue  of  negotiable  paper  after 131  n. 

may  sometimes  be  inhibited  in  equity 163  n. 

provisions  in  articles  for 169 

disposal  of  good-will  upon 181  n. 

right  to  enjoin  use  of  firm  name  upon 182  n. 

bill  for 206 

power  of  equity  to  grant 206 

account  ordered  without 207 

injunction  decreed  without 209  n.,  210 

injunction  in  case  of 209  n.,  212 

appointment  of  receiver  upon 219 

by  a  sale  of  goods  under  execution 258  n. 

by  a  provision  in  the  articles 280 

power  of  equity  to  decree  dissolution 280 

time  of,  fixed  by  articles 280,  281 

fixed  by  implication 282 

where  the  articles  omit  all  reference  to 282 

where   the    agreements   are  only  oral,  or  they  simply  agree  to  be 

partners 282 

where  the  partnership  entered  into  long  contracts  of  business       .     .     282 
where  one  of  several  partners  agrees  with  a  stranger  for  a  sub- 
partnership      282 

where  formed  for  a  single  adventure 283 


INDEX.  599 

Section 
DISSOLUTION    OF   PARTNERSHIP  —  Con/Z/iweJ. 

where   formed   for   dealing   in  a  subject-matter  certain  to  expire 

at  a  certain  time        283 

by  the  will  of  all  the  partners 284,  284  n. 

where  contract  of  copartnership  is  under  seal 284 

consent  to  dissolution  may  be  inferred        ,     .     284 

where   there   is   an   incorporation    of    the   partners   for   the   same 

business        , 285 

general  effects  of 286 

effects  of,  on  the  interests  and  rights  of  partners ,     28G 

no  effect  on  property  of  partners        .     .  2s6 

each  partner,  in  absence  of   a  special  agreement,   may  compel   a 

final  settlement 286 

each  partner  is  still  liable  for  the  debt ,     .     .     .     286 

power  of  each  partner  to  demand  and  receive  payment  of  debts  .     .     287 

(See  Nkw  Yokk  Statute,  April  18,  1838,  ch.  257.)  287  n. 

without   a   special   agreement   leaves    all    the     partners    equal   iu 

rights  and  obligations 287 

winding  up  the  concern 288 

powers  of  each  partner  in  case  of  a  dissolution        .     .     .        288,  293,  294 

where  power  of  a  partner  passes  to  his  administrator       288 

where  there  is  an  agreement  that  one  shall  wind  up  the  business  .  289 
settlement  by  a  partner  in  fraud  of  the  firm  valid  as  to  innocent 

stranger 288 

duty  and  power  of  settling  partners       ....      290,291,292,293,294 

rule  as  to,  in  Pennsylvania        291 

operation  of,  as  limiting  partner's  powers 291 

authority  given  to  continuing  partners        293 

where  equity  will  interfere        295 

power  of  equity  over  settlement 295 

no  partner  may  claim  payment  for  his  services  in  case  of     ...     .     295 

effect  of,  upon  third  parties .     .     296 

agreements  between  partners  upon 297 

where  the  interest  in  the  partnership  has  been  transferred  to  an 

assignee        297 

where   the   creditors   consent   to   an    agreement   between   partners 

after 298 

notice  of 299 

by  death  of  a  partner 299 

actions  and  remedies  after 300 

effect  of,  on   an   interest   held   on   condition  that  the  partnership 

exists 300 

effect  of,  on   a  lease  held  by  the  partnership  from  one  of  the  part- 
ners      300 

what  acts  dissolve  a  partnership 301 

for  outlawry 301 

by  a  conviction  for  felony .301 

caused  by  a  partner  passing  under  guardianship 303 

by  sale  on  execution  of  partner's  interest  .  .  301  n.,  304,  305,  306  n. 
not  caused  by  attachment  or  assignment  of  partner's  interest  .  304,  305 
for  any  cause  which  takes  from  a  partner  all  his  ownership  .  .  .  304 
by  a  sale  by  one  partner  of  all  his  interest  to  his  copartner      .     .     304  n. 


600  INDEX. 

Section 
DISSOLUTION   OF   PARTNERSHIP  —  Con^mwefZ. 

not  caused  until   actual   transfer,   if   the   partner   retains   posses- 
sion       304 

by  a  partner  by  his  own  will 306,  SOfi  n. 

at  what  time  and  in  what  manner  a  partner  may  cause  a    .     .     .     .     '6W) 
by  one  partner,  notice  of,  must  be  given  to  the  other  partners       .     .     3U6 

by  exclusion  of  partners       306  n. 

by  transfer  of  partner's  interest 306  n. 

power  of  partner  to  dissolve,  whether  restricted       .     .        306  «.,  307,  308 

power  of  equity  to  prevent 308 

may  be  made  prospectively 309 

method  of  effecting 309 

notice  of,  at  will  of  a  partner,  need  not  be  in  writing 310 

by  I'etiremeiit  of  a  partner 311 

by  any  change  in  the  partnership 311 

after,   one    partner   dealing   with   a   person   having   no.  notice    of, 
can  bind  his  copartner,  but  only  in  transactions  in  the  usual 

course  of  the  firm's  business 323 

necessarily  happens  on  death  of  partner 342,  343 

unless  otherwise  provided  in  the  articles 313  n. 

by  death,  settlement  of  estate  upon 344  et  seq. 

notice  of,  not  necessary 351 

where  one  of   the  surviving  partners  is  executor  to  the  deceased 

partner,  notice  of  dissolution  should  be  given 351  n. 

of  a  dissolution  by  decree ,     357 

what  such  a  decree  may  provide 357 

for  misconduct  of  a  partner 358 

courts  of  common  law  unable  to  grant 3.57 

cases  in  which  courts  of  law  might  dissolve  a  partnership  ....     357 

courts  of  equity  have  full  power  to  grant  a 357 

(^'ee  Decrek,  and  Equity.) 
usually  for  causes  occurring  after  formation  of  partnership     .     .     .     357 
excluding  one  elected  trustee  in  an  unincorporated  company  may  be 

good  ground  for  a 358  n. 

where  miscouduct  is  not  charged 359 

because  continuance  of  business  is  injurious 3:)9 

pecuniary  inabihty  of  one  partner  to  fulfil  material  engagements 

with  the  other  partners  sufficient  cause  for 360 

inability  of  a  partner  to  do  his  duty  to  the  firm,  caused  by  a  per- 
manent loss  of  health '  .     .  3fio 

would  be  granted  for  insanity 361,  362,  363 

insanity  itself  does  not  operate   a 361    362 

but  if  insanity  were  determined  by  due  inquest,  and  pu])lic  notice 

given,  it  niiglit  be  held  to  operate  a  ....     " 363 

where  the  appointment  of  guardians  would  cause  much  delay,  a 
court  of  equity  would  receive  a  petition  from  the  next  friend  of 

the  insane,  and,  upon  cause  shown,  grant 363 

where  the  contiimance  of  the  partnership  has  become  impracticable, 

will  be  gr  mted  in  equity 364 

because  of  award  of  arbitrators 365 

upon  bankruptcy 301  n,  304,  366,  369 


INDEX.  GOl 

Section 
DISSOLUTION   OF   PARTNERSHIP— Con//nueJ. 

takes  effect  by  relation  of  time  at  committing  act  of  bankruptcy    3G7 

reason  of . 368 

results  necessarily ,     .     371 

no  notice  required  of „     ,     .     372 

where  there  are  no  statutes  of  insolvency,  inability  and  refusal  to 

pay  debts  do  not  operate  a .     ,     :     ,     368 

absconding  does  not  operate  a 368,  3G8  n. 

simple  insolvency,  without  an  assignment  or  any  judicial  process, 

does  not  work  a .     .     368 

appointment  of  a  receiver,  in  certain  cases,  operates  a 368 

in  case  of,  must  be  an  account  if  demanded  by  a  partner  or  a  party 

in  interest .     408 

in  a  suit  in  equity  for,  and  an  account,  alleging  an  agreement  that 

dividends  of  profits  were  to  be  made  at  certain  periods,  the 

court  may  decree  the  payment  of  the  sums  due  thereon  before 

the  final  distribution  of  assets 408  n. 

of  a  limited  partnership,  notice  should  be  given,  unless  it  comes  by 

original  limitation  of  time,  or  by  some  act  of  law 428 

of  a  joint-stock  company,  a  change  in  the   members  would   not 

operate  a,  as  in  a  common  partnership 435 

DISTRIBUTION, 

of  joint  estate  of  firm  in  bankruptcy 382,  382  n. 

of  separate  estate  of  partner      .     .     .     .     o     .     .  383,  383  n.,  384,  384  ti, 
DIVISION   OF    PROFITS, 

provision  for 172 

{See  Articles.) 
DORMANT    PARTNER, 

usually  understood  as  one  both  secret  and  inactive    ..'...,       31 
difference  between  a  dormant  and  an  open  partnership  ....       31  ?i. 
{See  Partners.) 

dealing  with  land    .     .     .    ,. 81 

liable  when  discovered 80  n.,  81 

unless  they  plead  in  abatement,  an  action  may  be  maintained  against 

them  alone 80  n. 

bound  by  contracts  of  a  single  copartner      ........      115  n. 

bound  by  issue  of  firm  paper 132 

non-rejoinder  of,  in  an  action  by  or  against  a  firm 202 

where  the  goods  of  the  ostt-nsible  partner  are  attached  and  another 

creditor  discovers  a,  and  makes  him  defendant 261 

where  the  ostensible  partners  were  not  dealt  with  on  partnership 

account „ 261 

rights  and  obligations  of,  as  to  the  real  estate  of  a  partnership     .     .     269 

rights  of,  when  retiring 320 

necessity  of  notice  of  retirement  by 320,  320  n. 

(See  Notice  of  Retirement.) 

liable  for  debts  contracted  during  the  partnership 320 

who  is  a  new  partner 339 

(.S'ee  Incoming  Partner.) 

assuming  debts  of  old  firm,  whether  liable  to  creditors 339 

liability  of,  under  Statute  of  Reputed  Ownership 397 


602  INDEX. 

Section 
DORMANT   PARTXER—  Continued. 

need  not  give  notice  to  cut  off  his  personal  liability  for  future  debts; 
but,  qucere,  how  is  it  as  to  property  left  by  him  in  the  firm  after 

his  retirement 397 

proof  in  bankruptcy  against  partnership  assets  in  case  of  ...     .     4UU 
on  the  discovery  of,  creditors  may  elect  whether  to  proceed  against 
the  ostensible  partners  alone,  or  against  the  actual  firm  prop- 
erty     400 

where  non-rejoinder  of,  either  in  an  action  by  or  against  a  firm,  is 

not  an  objection  to  the  maintenance  of  the  suit 400  /(. 

DOWER   IN    REAL   ESTATE   OF   PARTNERSHIP, 

where  land  is  conveyed  to  partners  as  tenants  in  common  ....     273 
{See  Real  Estate  of  Paktnehship.) 
DUTIES.     {See  Partners,  Rights  and  Duties  of,) 


E. 

EMBEZZLEMENT, 

of  partner,  firm  bound  by 103 

ENEMY, 

cannot  be  partner 22 

ENTITY, 

partnership  is 1,  3,  4,  46 

EQUITY, 

recognition  of  partnership  as  an  entity  by 4 

will  not  give  relief  in  case  of  illegal  partnership 8  ?i. 

may  order  "account  of  part  of  business  of  which  the  rest  is  illegal     .     8  n. 

ordinarily  has  jurisdiction  of  partnership  suits 13 

whether  equity  will  give  relief  where  security  is  taken  of  a  higher 
nature   than   the   debt,    determined   by   the   intention   of    the 

parties 89 

where  a  partner  attemf)ts  to  bind  the  firm  by  a  specialty,  but,  for 

want  of  authority,  binds  himself  only 89 

may  give  relief  where  individual  obligation    of   partner   has   been 

taken  and  firm  thereby  discharged 89 

how  it  will  treat  the  transferee  of  one  partner's  interest  in  the  firm       112 

may  refuse  to  execute  inconsistent  stipulations 161  n. 

will  compel  a  specific  perforiuance  of  articles 162 

may  decree  a  specific  performance  of  agreement  to  enter  into  part- 
nership     163 

may  prohibit  a  partner  from  dissolving  the  firm 163  n. 

may  decree  a  partnership  as  of  a  past  day ■     ....     163 

will  not  permit  settled  accounts  to  be  opened  without  good  reason    .     167 

(^ee  Accounts.) 
where  one  partner,  in  violation  of  his  agreement,  engages  in  busi- 
ness on  his  own  account 168 

has  full  power  to  decree  dissolution 169,  206 

has  power  to  remove  a  copartner 169 

when  would  sustain  conduct  of  majority  not  authorized  by  articles  .     171 


INDEX.  603 

Section 
EQUITY  —  Continued. 

will  not  relieve  against  liquidated  damages,  if  legally  due  .     .     .     .     174 

will  not  enforce  a  sale  of  good-will 181 

questions  between  partners  cognizable  only  in 199 

instances  of  a  resort  to 204 

when  will  declare  the  partnership  void  ab  initio     .......      204  n. 

methods  and  processes  of,  applicable  in  cases  of  partnership  .  •  .  205 
what  is  necessary  to  give  jurisdiction  to,  in  cases  of  partnership  .  .  209 
will  grant  relief  to  a  partnership  as  against  third  persons    ....     243 

power  of,  over  settlement  after  dissolution 295 

power  of,  in  case  of  dissolution  of  partnership 308 

power  of,  to  prevent  dissolution  of  partnership  at  will 308 

how  real  estate  of  partnership  is  treated  in 315  n. 

will  give  relief  in  cases  of  negligence  or  gross  mistake  by  surviving 

partners 345 

surviving  partner  treated  as  trustee  to  pay  debts Mo  n. 

will  not  prevent  surviving  partners  from  becoming  purchasers  from 

the  representatives  of  the  share  of  the  deceased  partner    .     .      345  ii. 
will  restrain  the  surviving   partners  from  continuing  in  business 

under  the  credit  and  risking  the  effects  of  the  old  firm     .     .     .     346 
in  case  of  insanity,  where  the  appointment  of  guardians  would  cause 

mischievous  delay,  would  receive  petition  from  next  friend,  and, 

upon  cause  shown,  decree  dissolution 363 

will   not  usually  interfere  to  decree  the   specific   execution   of   an 

agreement  for  a  partnership 358  n. 

where  the  continuance  of  the  partnership  has  become  impracticable, 

will  decree  dissolution 364 

will  not  generally  enforce  an  agreement  to  refer  any  question  to 

arbitrators 364 

might  decree  a  dissolution  on  the  award  of  arbitrators 364 

all  parties  interested  must  be  joined  in  suits  in,  whether  as  plain- 
tiffs or  defendants 375 

rule  in,  that  in  bankruptcy  of  a  firm,  joint  property  forms  a  joint 

fund  appropriated  to  the  joint  creditors,  and  the  several  property 

of  each  partner  a  several  fund  for  private  creditors       ....     382 
two  firms   having   a   common   member   may   maintain    an   action 

between  themselves  in 200  381 

when  and  how,  will  enforce  the  lien  of  partners  on  the  partnership 

property  for  their  claims 402  n. 

may   postpone   a  sale   in   bankruptcy   for   the   general   benefit  of 

creditors 405  n. 

will  compel  partners  to  keep  a  correct  account  of  all  the  business  of 

the  firm  in  their  charge 407 

has  full  power  to  grant  a  partner  or  his  representatives  an  account 

407,  408 
will  not  interfere  for  a  breach  of  the  partnership  agreement  where 

law  can  give  relief 407  n. 

when,  will  entertain  jurisdiction,  although  account  or  other  action 

will  lie  between  tlie  parties 407  n. 

sometimes  infers  judicially  fraudulent  purposes  in  the  settlement  of 

an  account,  from  circumstances  indicating  it 410  n. 


604  INDEX. 

Section 
EQUITY  —  Continued. 

may  sometimes  infer  an  agreement  between  partners  to  settle  their 
accounts  in  a  certain  way,  and  direct  the  account  to  be  taken 

in  a  similar  manner 413 

(See  Account,  Dissolution,  Injunction,  Receiver,  Partnership, 
Bankruptcy.) 

ERROR, 

opening  an  account  for 167,409,411 

(See  Account.) 

ESTATE  OF  DECEASED  PARTNER, 

right  of,  to  an  account 345,  34.5  n.,  346  n. 

liability  of,  upon  continuance  of  business 346,  346  n.,  355 

ESTOPPEL, 

partner  by 93 

passing  of  property  by,  when  entrusted  to  ostensible  sole  trader  or 

partner 99 

EVIDENCE, 

admissions  of  partner  are,  against  partnership      ....    126,128,129 
.  books  of  account  are 129,  414,  414  n. 

where  the  signature  of  the  firm  has  been  attached  to  a  paper  by  a 
partner  when  the  burden  is  on  them  to  show  that  it  was 
fraudulent 134 

that  a  bill  has  been  accepted  by  one  partner  in  fraud  of  the  firm 
did  not  oblige  the  plaintiff,  being  indorsee,  to  prove  under  what 
circumstances  it  was  indorsed  to  him 137  n. 

by  a  partnership  that  the  note  or  bill  on  which  it  is  sued  was  in 

fraud  of  their  rights 137  n. 

burden  of  proof  on  creditors  of  the  partnership  to  shpw  that  prop- 
erty is  partnership  property 177 

EVIDENCE   OF   PARTNERSHIP, 

joint  signature  of  note  not 55  n. 

circumstantial 78 

general  reputation 78 

admissions 78 

acts,  declarations,  and  conduct  of  parties 78 

books  of  account     .     .     .     ■ 78 

declaration  of  one  not  competent  to  prove  another  his  partner     .     .  78 

EXECUTION, 

against  a  partnership  discharged  by  bankruptcy  of  the  firm   .     .     .     374 
(See  Attachment.) 

sale  of  partner's  interest  in  partnership  on 259,  259  n. 

injunction  against 259  n. 

dissolves  partnership 301  n.,  304,  305 

EXECUTOR, 

office  of,  cannot  be  held  in  partnership 39 

carrying  on  business  is  a  partner 74,356 

not  partner  because  of  sharing  profits 74 

when  the  deceased  has  made  his  partner  his  executor 352 

where  a  svn-viving  partner  is,  he  is  not  entitled  to  an  allowance  for 

carrying  on  the  business  after  his  partner's  decease     .     .     .     352  n. 


INDEX.  605 

Section 
EXECUTOR—  Continued. 

or  trustee  carrying  on  the  business  of  a  deceased  partner  pledges 

his  own  responsibility  to  the  creditors 356 

where  an,  without  any  authority  from   the   will,  trades  with  the 
assets,  the  testator's  estate  will  not  be  liable  in  case  of  his 

bankruptcy 355  n. 

to  autliorize  an,  to  carry  on  a  trade  with  the  testator's  property, 

the  most  distinct  authority  must  be  given  by  the  will  itself  .      356  n. 
EXECUTORY   AGREEMENT, 

for  partnership,  effect  of 12 

EXEMPTION    FROM   ATTACHMENT, 

of  partnership  property 252,  265  n. 

EXISTENCE    OF   PARTNERSHIP, 

a  question  of  fact 6 

EXPULSION   OF   PARTNER, 

provisions  in  articles  for 169  n. 

F. 
FACTOR, 

not  partner  because  of  sharing  profits 69 

FALSE    REPRESENTATION 

of  partner  to  copartner,  effect  of 151 

FALSIFY. 

meaning  of 411  n. 

FARM, 

agreement  to  cultivate  on  shares  not  partnership 61  7i. 

partnership  to  carry  on,  is  non-trading 85,  85  n. 

FARMING, 

partnership  for 37 

FELONY, 

effect  on  partnership  of  conviction  of  a  partner  for 301 

{See  Dissolution  of  Partnership.) 

FEME   COVERT.     {See  Married  Women.) 

FERRY, 

partnership  in 37  n. 

FINAL   BALANCE.     {See  Account  Stated.) 

FIRM, 

definition  of 1 

may  enter  into  partnership  with  firm  or  individual 25 

FIRM-NAME, 

partner  binds  firm  in  writing  only  by  using 83,  97,  97  n. 

any  name  may  be  adopted  as 97 

change  in,  does  not  change  the  partnership 97 

every  partnership  should  have  one 97 

need  not  be  prescribed  in  the  articles,  or  determined  by  agreement       97 

may  grow  out  of  the  custom  of  the  firm;  instances  of 97 

where  it  avoids  having  one 97 

where  there  is  an  adopted  and  recognized  style 97 

where  a  partnership  style  has  been  agreed  on,  and  another  name  is 

also  employed ;  instances  of 97 


606  INDEX. 

Section 
FIRM-NAME  —  Continued. 

coiiunon  to  two  sepai'ate  firms 97  n. 

may  be  that  of  one  partner 98,  98  n, 

note  signed  by  name  of  partner  so  used,  whether  firm  note  ...  98 
use  of  name,  apparently  firm  name,  gives  rise  to  presumption  of 

partnership 98 

where  tlie  name  of  one  partner  alone  is  the  proper  name  of  tlie  firm, 
this  name,  with  the  addition  of  Co.,  will  not  operate  as  a  signa- 
ture of  partnership 98  n. 

power  of  partner  to  affix,  to  negotiable  paper  presumed       ....     132 

name  of  partner  used  as 1-39 

provisions  respecting 176 

where  another  name  is  used  by  a  partner 176 

the  sanction  of  the  firm  to  a  change  in  the  name  may  be  implied      .     176 

a  firm  cannot  be  bound  by  any  name  but  its  own 176 

a  firm  may  have  two  names        176 

fictitious  names  prohibited  by  statute  in  New  York 176 

where  not  agreed  upon  in  the  articles      ....  176 

if  fictitious,  true  names  of  partners  to  be  published  in  Cal.  .  .  176  n. 
if  not  determined  by  articles,  depends  upon  usage  of  firm  .  .  .  176 
where  attempted  to  be  used  by  an  executor  of  a  deceased  partner     .     181 

right  to  use,  whether  property 182,  182  n. 

stranger  may  be  restrained  from  using 182  n. 

use  of,  after  dissolution 182  n. 

injunction  to  restrain  wrongful  use  of,  by  partner 214 

action  allowed  by  or  against  firm  in,  by  statute 250 

of  limited  partnership  must  be  stated  in  certificate 424 

FIRMS   HAVING   A   COMMON   MEMBER, 

can  be  no  action  at  law  between 200 

may  be  in  equity 381 

in  an  action   against  one,  the  other   cannot   be   summoned   as  a 

trustee 200  n. 

demands  between  them 200 

FISHING, 

partnerships  for 37 

FORM, 

of  articles  of  copartnership Appendix 

FRAUD, 

vitiates  agreement  for  partnership 10 

prevented  by  rule  that  partner   acting  within   apparent   scope  of 

authority  binds  firm 87 

of  partner  no  defence  in  action  against  firm 87 

discharges  firm  as  to  one  with  notice 90 

fraudulent  use  by  a  partner  of  the  name  or  property  of  the  firm,  87,  90,  90  n. 

presumption  of,  never  absolute        91 

but  not  rebutted  by  knowledge  of  the  other  partners  that  the  obli- 
gation of  the  firm  had  been  applied  by  one  partner  to  pay  his 

own  debt 91  n. 

of  partner,  copartner  when  held  for 100  n.,  102,  105  n. 

partner  committing,  by  transfer  of  property,  effect  on  title  .  .  .  108 
of  partner,  effect  of,  on  firm  paper  issued  by  him 133 


INDEX.  607 

Section 
FRAUD  —  Continued. 

effect  of,  on  title  to  property  given  in  payment  of  individual  debt    .     13G 

does  not  bind  the  firm  unless  ratified 136 

in  release  of  firm  debt  makes  release  void 136 

effect  of,  on  distribution  of  firm  and  separate  estates  in  bankruptcy,  394-397 

FRAUDS,  STATUTE   OF.     (See  Statute  of  Fkauds.) 
FREIGHT, 

combinations  to  maintain  rates  of 444 

FUNCTIONS   OF   A   TRUST 438 

FUNDS,   JOINT  OR   SEVERAL.     (See  Debts.) 387 


G. 

GAMBLING, 

partnership  for,  illegal 8 

GARNISHMENT, 

of   debt   due   to   firm  cannot   be   made   by  creditor  of   individual 

partner 259  n. 

of  copartners  by  creditor  of  individual  partner 260 

GENERAL   PARTNER, 

what  is 34 

in  limited  partnership,  liability  of- 423 

rights  and  duties  of 423 

infant  may  be        423  ti. 

name  of,  must  be  included  in  certificate 424 

GENERAL   PARTNERSHIP 40 

GOOD-WILL, 

is  a  species  of  partnership  property 181, 181  n. 

nature  of 181  n. 

how  transferred 181  n. 

how  disposed  of  on  dissolution 181  n. 

obligation  of  partner  selling,  as  to  establishment  of  new  business     .     314 

sale  of,  will  not  be  enforced  in  equity 181 

when  realized  by  the  executor  of  a  deceased  partner 181 

as  to  professional  ])artnerships 181 

when  a  retiring  partner  "  sells  out  " 314 

goes  to  the  survivors  of  a  firm,  without  payment  therefor  on  their 

part 347 

GROSS   EARNINGS.     (See  Partner.) 

GUARANTY.     (See  Suhety.) 

to  one  partner  inures  to  benefit  of  firm,  when 119 

partner  has  no  authority  to  enter  into,  on  behalf  of  firm     ....     144 

unless  required  by  nature  of  business 144 

to  firm,  effect  of  change  of  firm  upon 236 

where  transferred  from  the  firm  to  a  partner,  or  from  a  partner  to 

the  firm 240 

GUARANTY   AND   BOND   OF   INDEMNITY, 

change  in  the  firm  discharges  the  surety 236,  236  n^ 


608  INDEX. 

Section 
GUARDIAN, 

office  of,  cannot  be  held  by  partnership 39 

when  a  partner  is  put  under  guardianship,  his  guardian  becomes 

tenant  in  common  with  the  other  partners 303 

GUARDIANSHIP, 

of  partner  causes  dissolution      •     •     • 303 

(See  Persons  under  Guardianship.) 


H. 

HEIR, 

of  partner,  interest  of,  in  real  estate  of  partnership 274,  275 

{See  Real  Estate.) 

HOLDING   OUT, 

liability  as  partner  because   of 82,  93 

what  constitutes 94 

must  be  with  consent  of  him  held 95 

HUNTING, 

partnerships  for 37 

HUSBAND, 

liability  of,  as  partner  in  business  owned  by  wife 21,  55 

partner  with  wife,  in  foreign  country  where  allowed,  suit  by  .     .     .     233 
of  female  partner  cannot  claim  right  of  admission  to  firm  ....     302 


I. 

ILLEGAL   OBJECTS, 

which  make  a  partnership  void,  instances  of 8 

whether  our  courts  would  take  notice  of  a  breach  of  foreign  law  .     .         8 

ILLEGAL   PARTNERSHIP     8 

whether  account  will  be  taken  in  case  of 8  n. 

cannot  sue 243 

IMPOSSIBILITY.     (See  Dissolution.) 

INCAPACITY  OF   PARTNERS.     (-See  Dissolution.) 

INCOMING   PARTNER, 

definition  of 38 

addition  of  a  partner  in  law  terminates  the  former  copartnership     .       33 

where  one  is  received  and  treated  as  incoming  partner 106 

liable  for  all  subsequent  debts  of  the  firm 336 

not  liable  for  the  old  debts,  unless  he  assumes  them  for  considera- 
tion     336,  336  ?j. 

may  assume  debts  of  old  firm 33?,  337  n. 

not  liable  for  goods  ordered  before  but  not  delivered  until  after  he 

enters  the  firm 336  n. 

where  goods  are  sold  to  a  firm,  and  it  is  dissolved,  and  one  of  the  old 

partners  unites  with  a  new  one  and  forms  a  new  firm  .     .     .      336  n. 
admission  into  the  firm  is  consideration  enough  to  bind  him  to  those 

from  whom  the  consideration  comes 336 


INDEX.  G09 

Section 
INCOMING    PARTNER—  Con/mued 

a  contract  between,  and  the  old  members  of  the  firm,  that  the  incom- 
ing partner  shall  be  liable  for  the  old  debts,  like  the  other  mem- 
bers of  the  film,  valid  as  between  the  partners 330 

not  bound  to  creditors  of  the  old  firm  by  a  contract  with  the  old 

members  to  become  responsible  for  them 337 

not  bound  to  the  old  creditors,  unless  on  a  promise  for  consideration, 

which  may  be  express  or  implied 337 

circumstances  that  would  warrant  a  jury  in  finding  an  assumption 

of  the  old  debts  by  an 338 

no  difference  in  regard  to  an,  who  is  a  dormant  partner,  except  that 
a  known  ])artner  is  liable  on  the  credit  he  gives  as  well  as  his 
interest,  and  a  dormant  partner  on  his  interest  only     ....     339 

if  he  is  a  dormant  partner,  and  agrees  to  assume  the  debts,  he  stands 

in  the  same  position  as  a  known  partner  who  assumes  them  .     .     339 

not  liable  for  the  rent  on  a  lease  of  real  estate  taken  by  the  old  firm     337 

but  if  he  joins  with  the  old  partners  to  pay  an  increase  of  rent,  he 

will  thereafter  be  liable  for  such  an  increase 337 

where  the  bargain  between  the  partners  is  that  he  shall  be  a  partner 

as  of  a  preceding  day 340 

creditors  of  old  firm  may  in  some  jurisdictions  hold,  when  he  has  as- 
sumed debts 337  n. 

not  when  partnership  merely  dated  back 340 

INDORSEMENT, 

of  firm,  power  of  partner  to  affix,  to  paper  owned  by  firm  ....     145 
firm  when  bound  by 145 

INFANCY, 

effect  of  plea  of 18 

INFANT, 

incapacity  of,  to  enter  into  partnership 15 

may  be  a  partner  in  a  mercantile  house,  his  father  supplying  the 

capital \b  n. 

promise  of,  voidable  and  not  void 15 

may  be  ratified  by  him  after  full  age        16 

ratification  may  be  express,  or  implied  by  his  acts,  or  inferi*ed  by 

law 16 

statutes  respecting 16 

a  mere  acknowledgment  that  the  debt  exists  is  not  always  a  ratifica- 
tion of  the  promise  to  pay 16 

where  an  infant  enters  a  partnership  as  an  adult,  and  does  not  with- 
draw after  he  comes  of  age 16 

right  of,  to  avoid  his  contract  gives  no  right  of  avoidance  to  the 

other  contracting  party 17 

privilege  of  avoiding  extends  to  his  legal  representatives     ....       17 

a  decree  of  bankruptcy  against  an  infant  void  at  law 17 

where  a  contract  is  made  with  a  firm,  and  one  of  the  members,  who 

is  an  infant,  repudiates  his  liability 18 

may  be  general  partner 423  n. 

INFANT   PARTNER, 

assumption  of  debts  by.  after  coming  of  age 341 

39 


610  INDEX. 

Section 
IXFAXT  TARTSER— Continued. 

if,  on  corning  of  age,  he  repudiates  his  liability  for  debts  of  a  part- 
nership, must  repudiate  as  to  the  profits 341 

when  he  comes  of  age,  may  escape  the  obligations  of  the  firm,  under 

plea  of  minority 341 

uhen,  by  remaining  in  the  firm  after  full  age,  he  confirms  the  debts 

contracted  during  his  minority 341 

may  not  claim  a  share  of  the  joint  funds  of  the  old  partnership  and 

forbid  an  application  of  it  to  the  firm  debts 341 

INHERITANCE   OF    REAL   ESTATE   OF   PARTXERSHIP. 
(See   Real    Estate   of    Paktnership.) 

INJUNCTION, 

a  decree  for,  when  and  how  granted 209 

power  of  equity  to  decree  an  injunction 209 

when  equity  will  grant  injunction 209 

upon  dissolution 209  n.,  212 

may  issue  without  a  dissolution 209  n.,  210 

to   restrain    a  partner   from    using   the   partnership   property   im- 
properly   211 

form  of  the  order  for 211  n. 

where,  the  partnership  having  been  dissolved,  one  of  the  partners 
attempts  to  carry  on  the  former  business  in  a  way  injurious  to 

the  former  partners 212 

where  an  account  has  been  settled  between  the  partners 212 

where,  on  settlement,  it  is  agreed  that  a  partner  shall  not  carry  on 

a  certain  trade  within  certain  limits 213 

where  one  partner  carries  on  a  business  injurious  to  the  partner- 
ship  213 

where  a  partner  makes  use  of  the  name  of  the  firm  in  any  wrongful 

way 214 

where  one  of  the  partners  has  deceased 215 

will  not  be  granted  at  the  instance  of  one  partner  after  judgment  at 

law  against  the  firm 216  «. 

against  third  persons 216 

preliminary,  when  granted 217 

against  sale  of  partner's  interest  in  firm  property  on  execution    .      259  n. 
how  obtained.     {See  Equity.) 

INQUISITION   OF   LUNACY.     (See  Insane,  and  Insanity.) 
INSANE, 

incapacity  to  enter  into  a  partnership .       23 

a  verdict  of  inquisition  of  lunacy  has  no  retrospective  influence  so 
as  to  affect  any  honest  transaction  which  took  place  previous 

to  it 3G3 

INSANITY, 

a  ground  for  a  dissolution  of  a  partnership 361 

whether  it  does  of  itself  dissolve  the  partnership 362 

when  determined  by  due  inquest  and  public  notice  given,  it  might 

per  se  operate  a  dissolution 363 

INSOLVENCY   OF   PARTNER, 

causes  dissolution 301  n  ,  304 


INDEX.  611 

Section 

INSOLVENCY   OF    TAUT^ER  — Continued. 

does  not  of  itself  operate  as  dissolution 368 

declared  by  law.     (See  Bankkuptcy.) 

INSOLVENCY   OF   rAKTNERSHIP, 

effect  of,  upon  remedy  of  creditor  of  individual  partner      ....     262 

INSURANCE, 

of  partnership  property 180 

when  made  void  by  change  in  firm 180 

may  be  effected  by  a  single  partner 119 

enures  to  whose  benefit 239 

action  by  firm  on  policy  of 239 

by  one  partner  in  his  own  name 239 

INTENTION, 

true  test  of  partnership 54,  56 

INTEREST, 

on  advances,  when  partner  may  claim 156 

rate  of 157 

when  allowed  on  account 417 

INTERSTATE  COMMERCE   ACT 444 

INTOXICATION, 

agreement  for  partnership  avoided  by  temporary 23  n. 

INVESTMENT, 

"trusts,"  for o    .    .    .      440,445 


J. 

JOINDER  OF  PARTIES.     (See  Actions.) 
JOINT  CREDITORS, 

in  England,  are  entitled  to  prove  under  a  separate  commission,  for 

the  purpose  of  voting  in  the  choice  of  assignees 385 

in  this  country,  they  may  not 385 

who  are 387 

where  a  partner  owes  a  balance  to  the  firm,  cannot  prove  it  against 
his  several  fund,  unless  the  balance  is  caused  by  a  fraudulent 

abstraction  from  the  joint  funds 399 

where  they  elect  to  proceed  against  the  several  estate  of  a  partner, 
the  several  creditors  of  the  latter  may  proceed  against  the  joint 

fund  for  an  equal  amount 400 

who  are  not  partnership  creditors  may  attach  firm  assets  and  sell 

the  whole 248  n. 

may  not  come  on  firm  assets  in  bankruptcy 391  n. 

JOINT  ESTATE, 

where  larger  at  the  time  of  bankruptcy  on  account  of  any  fraudu- 
lent act  against  one  partner,  his  several  creditors  may  proceed 

against  it  for  that  amount 399 

JOINT   LEGATEES, 

whether  partners 77 

JOINT   PROPERTY, 

what  is 392 


612  INDEX. 

Section 
JOINT   AND   SEVERAL  NOTE, 

of  firm  and  partners HI 

JOINT-STOCK    COMPANIES,  Ch.  XVIII 431 

married  women  as  shareholders  in L'l 

what  is 40 

transfer  of  share  in 107 

validity  of 107  n.,  431 

not  dissolved  by  death  of  member 343  ?«.,  435 

regulated  by  statute  in  England 431 

are  subject  to  the  law  of  partnership 431 

where  all  the  property  is  in  the  hands  of  trustees,  and  the  share- 
liolders  under  an  indenture  which  declares  the  trust  liave  an 

equitable  estate 431 

characteristics  of 432 

usually  have  a  common  name 432 

what  right  they  have  to  change  their  name 432  n. 

may  have  their  by-laws  and  rules  of  proceeding  by  which  they  regu- 
late the  election  of  officers  and  the  transaction  of  business    .     .     432 
cannot  have  any  common  seal,  and  therefore  cannot  make  a  deed  of 

any  kind 432 

in  England,  they  are  bound  by  contracts  made  by  a  competent  board 

of  directors 432  n. 

cannot  limit  their  liabilities  and  become  a  corporation  or  a  limited 
partnership  by  their  own  act,  without  compliance  wiih  the  re- 
quirements of  the  law 433 

effect  on  creditors  of  agreement  between  stockholders 433 

of  rules  of  company 433 

the  directors,  unless  restrained  by  statute  or  the  deed  of  settlement, 

have  all  the  authority  given  to  partners  at  common  law    .     .      433  n. 

a  member  of,  liable  precisely  as  a  partner 434 

a  member  of,  may  recover  compensation  for  services  rendered  the 

company  previous  to  his  having  become  a  member  of  it    .     .      434  n. 
an  action  cannot  be  maintained  between  a  joint-stock  company  and 

one  of  its  members 434  n. 

change  in  the  members  would  not  operate  a  dissolution      ....     435 

respects  in  which  they  are  like  a  partnership 435 

right  of  stockholder  in,  to  transfer  his  interest 435 

position  of  transferee  of  stockholder's  interest 435 

analogy  of,  to  mining  partnership 436 

JOINT   TENANTS, 

whether  partners 76 

JUDGMENTS, 

an  unsatisfied  judgment  against  ostensible  partner  may  be  pleaded 
in  bar  to  a  suit  for  the  same  cause  against  both  ostensible  and 

secret 81 

where  obtained  against  one  partner 89 

where  confessed  by  one  partner  against  his  firm 125 

JURISDICTION, 

of  partnership  suits      ....  13 


INDEX.  613 

L. 

Section 
LABOR, 

may  be  the  only  contribution  of  a  partner 63 

{See  Partneusuip  Property.) 
LABORERS, 

partnerships  of 37 

LAND, 

partnership  to  deal  in 38,  67 

contract  for  partnership  to  deal  in,  need  not  be  written       .     .      6,  12,  38 

dormant  partner  in  speculations  in 81 

partnerships  to  deal  in,  are  non-trading 85  n. 

"  trust  "  to  purchase  and  improve "  440 

belonging  to  partnership.     {See  Real  Estate  of  Partnership.^ 
LAW, 

presumption  that  all  persons  dealing  with  a  partnership  know  the 

law  of  partnership 160 

(See  Action  at  LAW^) 

LAW   MERCHANT 131 

(See  Custom  of  Merchants.) 
LAWYERS, 

partnerships  of 37,  62 

are  non-trading 85  n. 

good-will  of  firm  of 181 

LEASE, 

belonging   to    firm,    renewal    of,  by   partner    inures   to    benefit  of 

firm 152,  158  n. 

made  to  partners,  effect  of,  on  the  retirement  of  one  partner  .     .     .     300 
of  real  estate  held  by  a  firm,  a  new  partner  coming  in  after  the  lease 

would  not  be  liable  for  the  rent 337 

LEGACY.  (See   Legatee.) 
LEGATEE, 

where  property  is  left  to  two  or  more  persons  by  will,  and  they  take 

hold  and  use  it  as  partners .       77 

where  the  will  contained  expressions  which  would  give  the  property 

the  quality  of  a  joint-tenancy 77 

of  interest  in  firm  not  a  partner 106,  354 

(See  Devisee.) 
LESSOR, 

not  partner  because  of  sharing  profits 71 

LEVY.     (See  Attachment.) 
LIABILITIES, 

arising  fi'om  annuities.     (See  Statute  of  Vict.) 

where  it  arises  from  loans 70 

where  money  is  lent  to  a  firm  for  more  than  legal  interest ....       70 
arising  from  loans  where  money  is  lent  to  a  firm  and  the  lender  is  to 

receive  a  certain  share  of  the  profits 70 

arising  from  loans  ;  what  is  the  test  of  partnership  in  such  cases      .       70 

arising  from  leases 71 

where  an  owner  of  a  farm  lets  it  out  on  half  profits ;  this  does  not 

constitute  a  partnership 71 


614  INDEX. 

Section 
LIABILITY, 

as  partner,  grounds  of 80 

for  all  acts  of  copartner  within  scope  of  business 81 

because  of  interest 81 

because  of  holding  out 82,  93 

beginning  of 9- 

where  sought  to  be  put  upon  one  who  is  only  a  nominal  partner .      82,  93 
where  persons  have  the  same  firm  name,  and  do  the  same  business, 

liable  to  inference  of  identity  of  partnership 94 

where  one  is  a  partner  in  a  house  for  a  particular  business  and  the 

other  partners  carry  on  another  business 94 

declarations  or  acts  tending  to  show  that  the  parties  are  partners 

may  make  them  Uable  as  such  to  third  parties 94,  95 

must  be  shown  to  be  consented  to  by  nominal  partner 95 

where  a  person  not  publicly  declared  to  be  a  partner  is  held  out  as 

such,  with  his  consent,  to  one  customer 82 

LIE^^, 

power  of  partner  to  claim,  on  behalf  of  firm 119 

of  partner  on  partnership  property 183,  402  n. 

of  creditors  on  partnership  property 246 

LIMIT  AT  lOX, 

of  partner's  authority  by  agreement 84 

by  trade  usage 85,  85  n.,  120 

by  nature  of  transaction 86 

statute  of,  9  Geo.  4,  ch.  14 126  n. 

{See  Statute  of  Limitations.) 

LIMITED   PARTNERSHIP 40,421 

special  partner  in,  need  not  give  notice  of  withdrawal    ....     320  n. 

purpose  of  allowing,  to  be  formed 421 

definition  of 421 

general  principles  of 422 

principles  of  the  statutes  of  the  several  States  in  regard  to      .     .     .     423 

general  partners  in 423 

certificate  of 424 

unless  all  the  requirements  of  the  statutes  respecting,  are  complied 

with,  the  partners  will  all  be  liable  as  general  partners     .     .     .     424 

capital  of 425 

must  not  be  reduced  during  the  partnership 425 

position  of  special  partner  in 426 

in  New  York,  an  arrangement  of  the  firm  for  preference  among 
their  creditors,  or  to  provide  for  a  special  partner  as  a  creditor, 

is  void 426 

all  suits  must  be  brought  by  and  against  the  general  partners,  un- 
less the  special  partner  has  become  a  general  partner  by  a  viola- 
tion of  law  or  otherwise 427,  428  n. 

but  if  the  plaintiff  seeks  to  hold  the  special  partners  beyond  their 

limited  liability,  he  must  join  them 427 

if  renewed  after  its  expiration  by  its  original  limitation,  there  must 

be  a  renewal  of  the  certificate,  publication,  and  record     .  427,  427  n. 

different  ways  in  which  it  may  be  dissolved 428 

notice  of  dissolution  of 428 


INDEX.  615 

Section 
LIMITED    PARTXERSrnP—  Continued. 

when  defects  in  tlie  certificate,  or  in  publication  of  record,  or  in  any 

compliance  with  the  requirements  of  law,  if  merely  formal,  do 

not  vitiate 429 

if  substantial,  they  leave  all  liable  as  general  partners 429 

affidavit -to  accompany  the  certificate  of,  need  not  follow  the  exact 

words  of  the  statute 429  n. 

certificate  of,  prbaa  fuck  evidence  of  its  own  truth,  but  cannot  rebut 

positive  testimony  of  its  falsehood,  on  any  matei-ial  point      .     .     429 

may  be  funned  f(n'  what  purposes 430 

LIQUIDAl'ED    DAMAGES, 

when  courts  will  disregard  agreement  for 174 

when  courts  will  sustain  agreement  for 174 

must  be  agreed  upon  for  one  distinct  breach  only 174 

{See  Damagks.) 

LIQUIDATING   PARTNER 289,  289  u. 

power  of,  to  contract 290 

miscellaneous  powers  of ,     ....     291 

power  of,  to  deal  with  negotiable  paper 292 

having  express  authority  may  act  upon  it 293 

power  of,  to  do  acts  necessary  for  winding  up 294 

cannot  claim  compensation  for  services 295 

LOAN, 

share  of  profits  as  interest  on 70 

LONDON.     {See  Custom  of  London.) 

LOSS, 

community  of,  whether  essential  to  partnership 59 

how  shaied  by  partners 173 

caused  by  breach  of  duty  by  one  partner,  effect  of 151 

LUMBERING, 

partnerships  for 37 

LUNATIC.     {See  Insanity.) 


M. 

MAJORITY  OF   THE  PARTNERS, 

power  of 147 

in  dealing  with  third  persons 148 

in  reference  to  the  partners  themselves 149 

may  do  all  things  within  scope  of  business 149  n. 

may  not  change  location  of  business 149  «.,  161 

provision  in  articles  for  power  of 171 

as  to  excluding  partner 281 

MALICE, 

of  one  partner,  firm  when  bound  by 102 

MANAGING   PARTNER, 

must  act  in  good  faith  toward  his  co-partners  .     .  ....      150  n. 

MANUFACTURING, 

partnerships  for 37 


616  INDEX. 

Section 
MARRIAGE, 

of  female  partner  causes  dissolution ,     .     •     .     .     302 

MARRIAGE    BROKERAGE, 

partnership  for,  illegal 8 

MARRIED    WOMEN, 

cauuot  be  partners 19 

powers  of,  by  custom  of  London 19 

where  a  man  never  lived  in  that  State  of  the  Union  in  which  his 

wife  resides 19  n. 

when  wife  of  alien  19  w. 

statutory  powers  of      .... 20 

where  a  single  woman  is  a  member  of  a  firm,  her  marriage  dissolves 

the  partnership 20 

ownership  of  share  in  business  by 21 

where  a  wife  holds  shares  in  a  joint-stock  company  ......       21 

where  a  man's  wife  inherits  an  interest  in  a  partnership     ....       21 

where  the  property  was  given  to  trustees  for  the  sole  benefit  of  the 

wife         21 

in  partnership  with  husband  in  foreign  country  where  allowed,  suit 

by 233 

MECHANICS, 

partnerships  of 37 

MERCHANTS, 

notion  of  partnership  held  by 3 

custom  of.     (See  Custom  of  Mekchants.) 
MILL, 

partnership  to  carry  on,  non-trading 85  n. 

MINE, 

partnership  to  work,  is  non-trading 85,  85  n. 

MINING  PARTNERSHIP, 

nature  of 37  n. 

no  fiduciary  relation  between  partners  in 158  n. 

no  illlectus  per.sonarum  in 306  n. 

not  dissolved  by  transfer  of  partner's  interest 306  n. 

not  dissolved  by  death  of  partner 342  n. 

analogy  of,  to  joint  stock  company 436 

MISAPPROPRIATION, 

of  borrowed  money  by  partner  no  defence  for  firm 87  h. 

MISCONDUCT   OF   A   PARTNER, 

provisions  for,  and  damages  for 174 

MODIFICATION, 

of  articles  by  consent 164 

MONEY, 

contribution  of,  as  capital 63 

MONOPOLY, 

illegality  of 451,  452 

MORTGAGE, 

power  of  partner  to 109,  110  n. 

of  surviving  partner  to Ill  n. 

"MUNICIPAL   TRUST" 440 


INDEX  617 

N. 

Section 
NAME   OF   FIRM.   {See  Firm-Name.) 

NECESSARIES    OF   LIFE, 

illegality  of  combinations  to  affect 452 

NEGLIGENCE, 

of  partner,  loss  caused  by,  must  be  borne  by  him 151 

NEGOTIABLE   PAPER, 

law  of,  devised  from  law  merchant 131 

power  of  one  partner  to  hind  firm  by  issue  of 131 

authority  of  partner  to  issue,  presumed 132 

after  dissolution 131  n. 

issue  of,  by  partner  in  fraud  of  firm 133 

waiver  of  notice  by  one  partner  where  the  note  is  made  for  his  own 

benefit 133 

defences  of  partners  to 132 

presumed  to  be  valid  in  hands  of  third  person 134,  135 

given  in  payment  of  individual  debt  of  partner  does  not  bind  firm 

134,  1.34 

unless  ratified  by  firm 134  ?i. 

when  taken  with  knowledge  that  it  was  given  for  the  debt  of  one 

partner  only,  presumed  in    this  country  to  have  been   taken 

fraudulently 133,  134 

with  the  firm   name,  where  the   transaction    is   fraudulent,    effect 

of 134  n. 

given  by  one  partner,   when   consent   of   the   others   may  be   im- 
plied, without  a  new  consideration 134  n. 

bearing  the  signature  of  the  firm  given  by  a  partner  to  a  third 

party  for  his  own  debt,  effect  of 133,  134 

doctrine  of  the  English  courts  in  reference  to  this 135 

where  given  by  one  partner  in  payment  of  his  separate  debt,  and 

for  a  larger  amount  than  the  debt,  effect  of 135 

issued  in  fraud  of  firm  does  not  bind  it  to  holder  not  for  value,  or 

with  notice 137 

of  one  partner,  firm  when  liable  on 138,  139 

■where  received  bearing  only  the  signature  of  one  partner,  effect 

of 138 

credit  given  on,  only  to  those  whose  name  it  bears 138 

where  usage  of  the  firm  is  to  sign  by  only  one  partner 139 

where  signed  in  a  fictitious  name,  if  authorized  or  adopted  by  the 

firm,  effect  of 139 

may  be  signed  by  one  partner,  so  as  to  hold  all  jointly  and  himself 

severally 141 

of  one  of  two  firms  connected  in  business  and  using  the  same  name, 

effect  of 140 

indorsing  of  paper  which  does  not  belong  to  the  firm,  by  one  who  is 

a  partner:  presumption  against  authority  so  to  indorse  it      .     .     143 
given  by  partner  for  accommodation,  firm  not  bound  by     ...     .     143 

power  of  partner  to  indorse 145 

notice  of  dishonor  of.  may  be  given  to  one  partner  for  the  firm    .     .     146 
given  by  one  firm  to  another  having  common  member,  action  on      .     231 


618  INDEX. 

Section 
NEGOTIABLE   T AVER— Continued. 

indorsed  by  the  firm  to  one  partner 23i 

action  on,  against  firm  by  indorsee  of  partner 234 

necessary  parties  in  action  on 237 

who  must  sue  on 237 

promissory  note  indorsed  in  blank 237 

power  of  licjui dating  partner  to  deal  with 2D2 

signed  by  all  partners,  whether  debt  of  firm 398 

a  person  taking,  on  the  credit  of  several  i^ersons,  in  ignorance  of  the 
fact  that   they  are    partners,   may  prove   against   the   parties 

severally,  or  against  the  firm 398 

where  taken  wuth  knowledge  that  the  names  were  the  names  of 

partners 398 

NET   PROFITS.     (See  Partners.) 
NOMINAL   PARTNER, 

ostensible  partner  a  nominal  one  also 29 

usual  meaning  of  this  designation 29,  93 

may  be  called  by  his  partner  as  a  witness 29  ?i. 

how  different  from  dormant 29  n. 

converse  of  the  secret  partner 29 

liability  of 82 

as  party  to  suit 96 

where  obliged  to  pay  the  debts  of  the  firm,  may  recover  from  the 

firm 189  n. 

NON-TRADING  PARTNERSHIP 85 

NOTE, 

signed  by  single  partner,  his  name  being  firm  name,  whether  binds 

firm 98 

of  firm  given  by  partner  for  private  debt  unenforceable      .     .    91  n.,  134 

partner  may  waive  demand  and  notice  on 119 

to  partner,  how  far  valid 184  n. 

of  partner,  copartner  may  sue  at  law  upon 190 

{See  Nkgotiable  Paper;  Promissory  Note.) 
NOTICE, 

of  limitation  of  partner's  authority,  whether  effectual  .  .  .  84,  84  n. 
of  a  stipulation  to  one  member  of  a  firm  is  notice  to  all  .  .  .  .  84  n. 
where  a  partner  gives  notice  to  a  particular  person,  or  the  public 

generally,  that  he  is  not  responsible  for  the  acts  of  the  others    .  84  n. 
where  the  fact  that  a  partnership  is  engaged  only  in  a  particular 
trade  is   known,  this  is  a    limitation    of    the   authority  of    a 

partner;  instances  of 8r> 

to  one  partner,  firm  when  bound  by 101,129 

of  dishonor  to  one  partner  is  valid 146 

to  one  partner  after  dissolution,  valid,  if  there  was  no 

notice  of  the  dissolution 129 

to  one   of  the  joint  indorsers  of  a  note  who  are  not 

partners,  not  sufficient 129  n. 

to  one  of  joint  lessees,  sufficient  if  they  are  partners;   otherwise, 

not 129  n. 

NOTICE   OF   RETIREMENT   OR   DISSOLUTION, 

must  be  given  by  retiring  partner 299.315 

not  necessary  in  case  of  dissolution  by  act  of  law 315  n. 


INDEX.  619 

Section 
NOTICE  OF  RETIREMENT  OR  DISSOLUTION  —  Con^mue^/. 

as  in  case  of  death  or  bankruptcy 351,  372 

manner  of  giving 316 

as  to  former  customers  and  new  customers 317,  317  n. 

rule  as  to 317 

by  public  advertisement  enougVi  for  all  but  customers    .     .     .  317,  317  n. 

personal  notice  necessary  to  customers 317,  317  n. 

actual  knowledge  on  part  of  customer  enough 318 

when  unnecessary 318 

whether  a  person  has,  a  question  of  fact 318 

there  must  be  dealing  with  the  firm  directly,  in  order  to  entitle  a 

person  to,  as  a  customer 319 

what  dealing  would  entitle  a  person  to 319 

as  to  a  dormant  partner 320,  320  n. 

as  to  a  dormant  partner,  when  known  to  any  customer 320 

governed  by  rules  applicable  to  notice  in  other  cases 321 

in  what  manner  it  should  be  given 321 

must  be  such  as  the  usage  of  merchants  requires 321 

must  be  reasonable 321 

what  circumstances  will  dispense  with 322 

by  the  notoriety  of  the  act 322 

cases  in  which  a  jury  might  infer 322 

when  given  in  a  newspaper 322 

given  to  one  of  a  partnership,  binds  the  firm 323 

to  an  agent,  binds  the  principal 323 

where  given  to  a  stockholder  in  a  corporation 323 

where  casually  given  by  advertisement  to  a  director  of  a  bank      .     .     323 

where  given  to  a  director  expressly  for  the  bank 323 

in  case  of  the  death  of  a  partner  not  necessary 351 

not  necessary  in  case  of  bankruptcy        372 

of  limited  partnership 428 

NOVATION, 

in  case  of  partnership  debt 240 

by  consent  of  firm  creditor  to  accept  partner  as  debtor  .     .     .       325,  326 


o. 

OBLIGATIONS, 

of  the  partnership.     (See  Contracts;  Partners;  Partnership.) 

OFFICES, 

no  partnership  in ^9 

if  held   by   two   persons,   governed   by   rules   distinct   from    part- 
nership    ^^ 

(See  Partnership.) 

OSTENSIBLE  PARTNERS, 

who  they  are '^' 

■when  held  out  as  partner  with  his  consent 27 


620  INDEX. 

Section 

OSTENSIBLE   PARTNERS—  Continued. 

no  especial  way  of  holding  such  partner  forth 27 

where  a  partner  generally  unknown  is  made  known   to  any  one 

man 27 

power  of,  to  pass  property 99 

when  contract  with,  does  not  survive  to  a  dormant  partner      .     .     .     23G 
{See  Nominal  Partner.) 

OUTLAWRY, 

of  partner  operates  as  dissolution 301 

OWNERSHIP, 

questions  as  to  the,  of  goods,  effects,  or  lands,  determined  by  the 

general  principles  of  the  law  of  contracts 392 


P. 

PAROL, 

whether  contract  of  partnership  may  be  proved  by 6 

PARTIES, 

in  actions  by  or  against  firm 235,  237,  238,  239,  249 

nominal  partners  as 96 

dormant  partners  need  not  be,  in  suit  by  or  against  a  partnership     .  202 

in  actions  by  or  against  firm  after  dissolution        3U0 

after  death  of  a  partner 349 

after  bankruptcy  of  partner 375 

in  actions  by  or  against  limited  partnerships 427 

(See  Actions.) 
PARTNERS, 

legal  position  of 4 

relation  between  partnership  and 5 

must  consent  to  formation  of  partnership 9 

purchaser  of  partner's  interest  does  not  become  partner      ....  9 

effect  of  provision  of  articles  as  to 9 

representative  of  deceased  or  bankrupt,  not  a  partner 9 

must  be  competent  to  contract II 

any  persons  competent  in  law  and  fact  to  transact  business  on  their 

own  account  may  become  partners 14 

competency  of,  in  law  and  in  fact 14 

limited  in  number  by  statute  in  England 14  n. 

clergymen  as,  in  England 14  n. 

infants  as 15 

ratification  by 16 

effect  of  avoidance  of  partnership  by 17 

married  women  as 19 

statutory  powers  of 20 

in  joint-stock  companies 21 

husbands  as,  in  business  owned  by  wife 21 

aliens  as 22,232 

alien  enemies  as 22 

insane  persons  cannot  be 23 


INDEX.  621 

Section 
PARTNERS  —  Continued. 

corporations  as 24 

firms  as 25 

kinds  of 26 

ostensible 27 

secret 28 

nominal 29 

silent 30 

dormant 31 

sleeping 31 

retiring 32 

incoming 33 

general 34 

special 35 

who  are  (Ch.  V.) 41 

an  agieement  to  participate  in  profits  raises  a  strong  presumption 

of  partnership 51,  65 

but  is  not  decisive 51,  52 

one  or  more  may  be  guaranteed  by  the  otheis  against  loss  ....  59 
if  one  does  not  participate  in  profits,  but  is  liable  for  losses,  may 

still  be  a  partnership 59 

must  be  a  community  of  interest  for  business  purposes 42 

clubs  for  social  and  charitable  purposes  not  partnerships    ....  60 
there  must  be  a  comumnity  of  interest  resulting  from  the  work 

done 61 

may  be  as  to  the  buying  of  goods  and  the  sending  of  them  abroad, 

and  not  in  the  return  cargo 61 

when  physicians  or  lawyers  are 62 

effect  of  the  bargain  where  it  was  provided  that  one  should  find  all 

the  money,  and  the  other  do  all  the  work,  and  the  profits  be 

divided 63 

each  need  not  bring  into  the  common  stock  labor  and  property    .     .  63 
difference  between  an  undertaking  by  a  number  of  persons  jointly 

with  intent  to  diminish  a  loss,  and  one  for  the  sake  of  profit     .  64 
if  a  known  partnership  enter  into  a  bargain  for  purchase,  sale,  and 

joint  profit,  with  a  third  party,  for  a  single  transaction,  all"  are 

partners,  but  only  as  to  that  transaction 66 

a  person  receiving  a  specific  proportion  of  profits  as  wages  or  com- 
pensation for  sei-vices,  is  not  made  thereby  a  partner   ....  69 
so  of  a  person   working  land,  sailing  a  ship,  hiring  an  inn,  for  a 

share  of  the  profits 71 

same  person  may  be  a  partner  in  distinct  firms 79 

who  are,  as  to  third  parties  (Ch.  VI.) 80 

persons  may  be  held  as  partners  as  to  third  parties  who  are  not  so 

between  themselves 80 

general  grounds  of  liability 80 

an  absolute  liability  for  the  whole  of  every  debt  due  from  the  firm 

rests  upon  each  partner 80 

a  person  may  be  charged  either  because  he  is  a  partner,  or  because 

he  has  been  held  forth  as  such  with  his  knowledge  and  assent    80,  82 

but  only  to  those  who  have  trusted  the  firm  on  his  credit    ....  82 

secret  and  known  partners  equally  liable 80 


622  INDEX. 

Section 
PARTNERS  —  Continued. 

wheu  a  partner  is  liable  as  actual  partner 81 

authority  of,  to  bind  partnership 83 

how  far  stipulations  between,  affect  third  parties 84 

where  parties  enter  into  a  contract  of  partnership,  and  also  stipula- 
tions which  in  whole  or  in  part  deny  or  qualify  the  liability  of 

some  of  them 84 

•where  stipulations  between  partners  are  made  known  to  third  parties 

they,  generally,  are  affected  by  them 84 

where  there  is  a  provision  in  articles  that  the  partners  would  not 
come  under  liabilities,  nor  confer  on  each  other  rights  and  pow- 
ers belonging  to  partnership 84 

stipulations  unknown  to  third  persons  inoperative  as  to  them       .     .       84 
in  relation  to  the  business  of  the  firm,  every  partner  has  full  power 

to  bind  all  the  members  of  it 83 

but  he  binds  the  firm  only  when  he  acts  in  and  uses  the  name  of  the 

firm         83 

authority  of  each  partner,  usually  only  an  implied  one 84 

inference  of  authority  of  each  partner  cannot  be  made  when  dis- 
claimed by  act  and  word 84 

it  is  a  question  of  fact,  whether  an  alleged  partner  has  disproved  the 

evidence  of  authority  on  the  part  of  his  partners 84 

a  person  may  not  at  the  same  time  secure  the  gains  of  partnership 

and  guard  against  its  losses 84 

custom  in  Continental  Europe  to  designate  one  of  a  firm,  in  a  circu- 
lar, as  the  partner  having  power  to  sign  their  name  to  negotiable 

paper 84 

limitation  of  authority  of,  by  trade  usage 85 

by  nature  of  transaction 85n.,86 

in  non-trading  firm,  authority  of 85,  85  n. 

scope  of  authority  of 85  ?i.,  86 

acting  beyond  scope  of  authority  binds  himself So  n. 

reason  why  all  are  bound  by  acts  of  one 87 

firm  may  permit  a  partner  to  act  for  the  firm,  in  his  own  name    .     .       87 
if  a  partner  exempted  by  agreement  is  made  to  pay  any  loss,  he  can 

recover  it  from  his  copartners 87 

where  a  partner,  in  violation  of  his  stipulations  as  partner,  enters 

into  a  contract  with  a  third  person,  effect  of 87 

where  a  person  deals   with  a  fraudulent  partner,  in  an  ignorance 

which  implies  gross  negligence  on  his  part,  effect  of     ...     .       87 
partner  binds  firm  by  declaring  a  transaction  within  scope  of  busi- 
ness to  be  for  partnership 87  n. 

effect  of  giving  credit  to  a  single  partner 88 

firm  whether  bound  by  sale  to  a  single  partner 88 

by  loan  to  a  single  partner 88 

effect  of  taking  note  of  individual  partner 88  n.,  89,  89  n. 

where  a  creditor  of  a  firm  takes  a  judgment  or  bond  against  an  osten- 
sible partner 89 

attempting  to  bind  the  firm  by  a  specialty,  but  failing 89 

(See  Equity.) 
where  using  the  credit  of  the  firm  for  personal  advantage,  without 

authority 90 


INDEX.  623 

Section 
PARTNERS  —  Continued. 

partner  does  not  bind  firm  by  giving  firm  property  in  payment  of 

individual  debt 90,  136 

unless  authorized  by  firm 91 

where  propeity  is  purchased  by  one  partner  in  his  own  name  with 

funds  of  the  firm 90  n. 

a  fraudulent  use  of  the  firm's  name  should  be  at  once  repudiated     .       91 
partner  cannot  give  note  of  firm  in  payment  of  private  debt  unless 

authorized Ql  n.,  134 

rights  of  seller  who  discovers  that  the  orderer  of  goods   and  the 

receiver  to  whom  he  sent  them  wei-e  partners  in  the  transaction       92 
where    the   orderer    and    receiver    were    not  to  enter   into   partner- 
ship until  the  products  which  had  been  ordered  were  manu- 
factured    92 

where  a  person  liable  because  he  is  held  out  as  such        ....      93,  94 
where  conversations  and  acts  are  insufficient  to  prove  a  partnership 

as  between  the  partners,  if  third  parties  are  not  interested    .      94,  95 
every  one  authorizing  another  to  believe  him  a  partner,  is  liable  as 

a  partner  as  to  such  person 95 

in  assumpsit  by  a  firm,  plaintiffs  must  prove  who  constitute  the  firm       98 
of  the  eifect  of  using  such  a  name  as  usually  indicates  a  partnership 

98,  98  n. 
a  partner  with  authority  to  act  for  the  firm,  whose  name  is  used  as 
the  name  of  the  firm,  may  by  his  representations  bind  the  firm 
to  an  innocent  party,  however  fraudulently  he  may  act  towai'ds 

the  firm 100 

liable  for  tort  of  copartner  in  course  of  business 100,  102 

notice  to  one,  firm  when  bound  by 101 

when  liable  in  sali'lo  for  the  frauds  of  other  partners,  want  of  evi- 
dence that  money  raised  by  the  fraud  of  one  of  the  partners 
was  applied  to  the  use  of  the  firm  will  not  relieve  the  others 

from  liability 102 

where  a  partner  steals  money  and  deposits  it  to  partnership  account, 

and  innocent  partners  not  liable 103 

assumpsit  for  money  had  and  received  might  lie 103 

wheie  it  was  the  business  of  the  firm  to  receive  goods  on  deposit, 
and  one  of  the  partners  stole  some  of  the  goods  so  deposited, 

firm  liable 103 

embezzlement  or  breach  of  trust  by.  charges  firm 103,  104 

where  one  of  the  firm,  a  trustee,  applies  the  trust  fund  to  the  use  of 
the  partnership,  firm  liable  if  other  partners  knew  and  assented; 
whether  liable  if  they  did  not  know  and  assent,  not  settled  .     .     104 
to  whom  goods  were  consigned  for  sale,  liable  for  the  pledge  thereof 

by  a  fraudulent  jiartner 105 

where,  from  the  nature  of  the  tort  committed  by  one  partner,  it  is 

shown  to  be  only  a  several  act,  firm  not  liable 105 

when  liable  in  soVulo  for  tort,  may  be  sued  either  jointly  or  severally     105 

charged  for  tort  of  copartner  may  have  contribution 105 

a  release  to  one  operates  as  a  release  to  all 105  n. 

case,  the  proper  action  against  partners  for  injuries  by  their  servants 

105  n. 
a  person  must  become  such  by  his  own  act 108 


624  INDEX. 

Sfxtion 
PARTNERS  —  Continued. 

rights  and  powers  of 106,  et  seq. 

right  of  choice  of  copartner 106 

assignment  of  interest  in  business  by 106,  107 

bequeathing  interest  in  firm  does  not  make  legatee  partner     .     .     .     106 
consent  to  assignment  of  interest  by,  given  in  advance       ....     107 

right  of,  to  transfer  property 108 

power  of,  to  sell  firm  property 108,  108  n. 

to  pledge  or  mortgage  firm  property 109,  110  n. 

to  convey  property  in  payment  of  debts 110 

to  assign  property  in  trust  for  creditors      ....        110,  110  n. 
one  has  no  exclusive  right  to  any  one  particular  portion  of  the  stock 

of  the  partnership 112 

how  partnership  property  owned  by 112 

may  sell  his  interest  in  the  firm 112 

right  of,  to  purchase  for  firm 113,  113  n. 

foundation  of  powers  of 114 

general  extent  of  powers  of        114 

power  of,  to  make  contracts 115 

to  borrow,  lend,  and  pay  debts 116 

to  receive  payment  of  debts 117 

to  conduct  legal  proceedings 118 

to  insure 119 

to  accept  guaranty       119 

to  waive  demand  and  notice  on  firm  note 119 

to  vote  on  corporate  stock  owned  by  firm 119 

when  a  transaction  by  a  partner  with  a  stranger  is  foreign  to  the 

business  of  the  firm,  what  duty  of  inquiry  is  on  the  stranger     .     120 
tepresentationx  and  admissions  of, 

to  bind  the  firm,  must  be  in  the  business  of  it  and  during 

its  existence        126 

if  the  partnership  is  in  existence,  a  partner  may  revive  a  debt 
barred  by  the  Statute  of  Limitations         126,  126  n.,  127,  127  n. 

but  aliter  if  partnership  is  dissolved        127,  127  n 

after  a  dissolution,  how  far  may  affect  former  copartners        .     128 

after  dissolution,  as  to  balance  of  account        128  n. 

relating  to  the  business  of  the  firm  bind  it 129 

admissions  of   one   not  competent   evidence    of  partnership 

to  all 95, 129  n. 

but  binding  on  him 95,  129  n. 

if  a  partner  has  not  received  his  certificate,  his  admissions, 
though  made  after  bankruptcy,  may  bind  the  firm    .     .      129  n. 

where  some  of  the  firm  are  dormant 129  n. 

of  one  who  is  not  a  party  to  the  suit  in  which  they  are  offered 

in  evidence 129  n. 

binding  on  firm,  if  relating  to  the  transaction  of  its  business     129 

effect  on  firm  of  notice  to,  or  knowledge  of 129 

authority  of,  to  vary  business  of  firm 130 

to  issue  negotiable  paper  (see  Negotiable  Paper)         131,  et  seq. 

effect  of  fraudulent  is 5ue  of  firm  paper  by 133,  134,  loo 

effect  of  fraudulent  transfer  of  firm  property  by 136 

release  of  firm  debtor  by,  in  fraud  of  firm 136 


INDEX.  625 

Section 
PARTNERS  —  Continued. 

agreement  by,  for  payment  of  private  debt  by  firm  credit  .     .     .      136  n. 

firm  when  bound  on  individual  note  of  partner 138 

name  of  partner,  when  used  as  firm  name 139 

becoming  party   to   negotiable   paper   jointly   and   severally    with 

copartners 141 

debt  of,  before  beginning  of  partnership,  not  a  firm  debt   ....     142 
have  no  authority  to  sign  firm  note  for  accommodation       ....     143 

to  issue  guaranty  in  name  of  firm .     .     144 

power  of,  to  indorse  firm  paper 145 

to  indorse  name  of  firm  on  private  negotiable  paper      .     .     .     145 
notice  of  dishonor  of  negotiable  paper  of  firm  may  be  given  to     146 

duty  of,  toward  copartners 150 

must  exercise  good  faith  toward  copartners      ....  ...     150 

partner  must  make  good  loss  caused  by  his  fault,  when      ....     151 " 

must  not  deceive  copartner 151 

must  not  make  secret  advantage 152 

partner  obtaining  goods  for  the  partnership  by  barter  of  his  own 

goods,  effect  of 152 

may  not  transact  independent  business  in  competition  with  firm  150  n.,  1 53 

may  examine  accounts  of  firm 1.54 

whose  duty  it  is,  must  keep  proper  accounts 154 

must  communicate  important  transactions  to  copartner      ....     154 

right  of.  to  extra  compensation 155,  155  n. 

when  liable  for  interest  on  advances 156,  157 

how  far  trustees  for  the  firm 158 

with  the  concurrence  of  all.  may  alter  the  terms  in  which  they  carry 

on  business,  at  pleasure 164  n. 

where  one  may  refuse  to  pay  to  the  firm  money  he  owes     .     .     .     .     166 

where  money  is  advanced  by  the  firm  to  one 166 

provision  in  articles  for  advances  by  .     .    " 166 

premium  paid  by 166 

provisions  in  articles  as  to  giving  time  and  skill  by 168 

provisions  in  articles  for  expulsion  of 169  ?i. 

division  of  profits  by 172 

sharing  of  loss  by 173 

liquidated  damages  for  misconduct  of 174 

provisions  in  articles  for  appropriation  of  property  to 175 

right  of.  to  carry  on  business  after  sale  of  good- will       ....      181  n. 

after  death  of  copartner 181  n. 

lien  of,  on  firm  property 183 

remedies  of,  against  copartners 184.  et  nfifj. 

cannot  sue  or  be  sued  by  the  partnership Ib4 

cannot  sue  copartner  at  law  on  partnership  claim       .      .     .        185,  185  n. 
one  partner  may  not  maintain  an  action  against  the  partnership,  for 

his  expenditures  for  the  firm        185  n. 

no  account  between,  can  be  taken  at  law 18")  ;/. 

may  sue  each  other  on  affairs  not  connected  with  partnership       .     .     186 
but  not  for  money  received  on  partnership  account,  unless  all  the 

accounts  are  adjusted 185 

may  sue  each  other  at  law  on  a  claim  arising  before  the  partnership, 

although  referring  to  it 187 

40 


626  INDEX. 

Section 
PARTNERS—  Co/!?t?nierf. 

on  personal  loan 186,  187,  188 

on  demand  arising  before  partnership  is  launched     ....     187 
on  demand  arising  after  termination  of  partnership      .     .     .     188 

on  contract  to  assume  and  pay  debts  of  firm 188  ?i. 

on  affairs  separated  by  agreement  from  partnership  affairs     .     190 

on  his  individual  note 190 

on  certain  clauses  of  the  agreement  for  the  partnership      .     .     191 
on  agreement  to  enter  into  partnership  or  make  advances  191,  191  n. 

on  agreement  to  pay  a  salary  or  commission 191 

for  money  had  and  received  for  specific  purpose        ....     192 

for  balance  of  an  account  stated 193,  194,  195 

for  over-payment  of  balance 196 

on  contract  to  render  account 197 

for  contribution,  when 198,  198  n. 

in  trover  or  detinue 226 

for  fraud  in  securing  entrance  into  partnership 227 

may  sue  copartner  in  equity  usually 199,  204 

on  demand  between  firms  having  common  member      200,  201,  202 

for  specific  performance  of  articles 20.5 

for  dissolution 206 

for  account 206,  207,  208 

for  injunction  to  restrain  misconduct  of  copartner    .     .       209,211 

for  injunction  before  dissolution 209  ?«.,  210 

for  injunction  after  dissolution 209  n.,  212 

for  injunction  to  restrain  wrongful  carrying  on  of  business     .     213 
for  injunction  to  restrain  wrongful  use  of  trade-name   .     .     .     214 

for  receiver  (see  Receiver) 218,  et  seij. 

issue  and  trial  at  law  may  be  ordered 225 

for  tort  of  partner 225 

to  rescind  partnership  agi-eement  for  fraud 227 

tort  of,  may  give  partnership  a  cause  of  action  against  stranger  .     .     203 
taking  exclusive  possession  of  property  ground  for  dissolution  and 

receiver 219 

suing  copartner,  statute  of  limitations  in  case  of 228 

effect  of  discharge  of  third  person  by,  upon  action  by  firm      .     .     .     230 
may  indorse  note  of  firm  running  to  himself  to  a  stranger  so  as  to 

give  right  of  action 234 

must  join    in    action    by    firm,    though    he    has    transferred  his 

interest 235 

agreement  between,  cannot  affect  the  liability  of  their  debtor      .     .     235 

remedies  against 244 

separate  property  of  a  partner  liable  first  to  separate  creditors  of 

the  partner 248 

effect  of  death  of.  upon  action  by  or  against  a  partnership  ....     249 
whether  liable  personally  on  judgment  (by  statute)  against  partner- 
ship in  the  firm  name 250 

right  of  partnership  creditor  to  proceed  against 253 

each  partner  liable  in  soli'lo  for  the  whole  partnership  debts    .     .     .     2.53 

right  of  creditor  of,  to  proceed  against  partnership 254 

right  of,  in  the  partnership  property  defined 255 

right  of,  to  disencumber  his  interest  from  the  rights  of  the  others    .     255 


INDEX.  627 

PARTNERS  —  Continued. 

may  sell  out  his  interest  to  a  stranger 255 

such  sale  and  transfer  will  not  liberate  his  share  from  the  debts  of 

the  firm 255 

right  of  creditor  to  attach  interest  of  partner 256 

to   take   advantage    of    private    agreements   between    part- 
ners   257 

method  of  attaching  interest  of 258,  258  n. 

of  selling  interest  of,  on  execution 259,  259  n. 

garnishment  of,  by  creditor  of  copartner 260 

effect  of  death  of,  upon  real  estate  of  partnership       .     .     272  n.,  274,  275 

right  of  widow  of,  in  partnership  real  estate 273 

right  of  heir  of ,  in  partnership  real  estate 274,275 

power  of,  over  real  estate  of  partnership 277 

cannot  convey  real  estate  by  deed 277,  277  n. 

except  by  consent  of  copartners «     .     .      277  n. 

deed  of  partnership  land  by,  binds  himself 277  n. 

deed  by,  passing  legal  title  to  land  of  partnership  to  purchaser  for 

value  without  notice  of  rights  of  firm,  bars  the  firm     ,     .     .     .     278 
effect  of  dissolution  of  copartnership  on  rights  of 286,  291 

on  power  of,  over  firm  debts 287 

empowered  on  dissolution  to  wind  up  the  concern 287 

authority  of,  in  winding  up  the  concern 288 

settling  or  liquidating 289,  289  n. 

cannot  claim  compensation  for  services  in  settling  affairs  of  partner- 
ship    295 

dealing  with,  by  third  party  after  dissolution  protected       ....     297 
dissolution  by  outlawry  of 301 

by  marriage  of  female 301  n.,  302 

where  a  single  woman  is  a,  and  marries,  her  husband  cannot 

claim  to  be  admitted  as  a  partner 302 

by  death  of 301  n. 

by  bankruptcy  of 301  n.,  304 

by  sale  on  execution  of  interest  of 301  «..  304 

by  insanity  of 301  n. 

by  guardianship  of 303 

not  caused  by  attachment  of  interest  of 304,  305 

by  pledge  or  assignment  of  interest  of  .     .     304,  305,  306  n. 

exclusion  of,  from  business  operates  as  dissolution 306  /*. 

embezzlement  or  absconding  of,  operates  as  dissolution       .     .     .      306  n. 
power  of,  to  dissolve  partnership  for  a  term 306  // 

to  dissolve  partnership  at  will       ....       306,  306  «.,  307,  306 
effect  of  agreement  by,  to  pay  debts  of  firm      .     .  324,  325,  326,  327,  328 

right  of  creditors  of  firm  against  estate  of 350  n. 

notice  of  death  of,  not  necessary 351 

surviving  copartner  created  executor  of 352 

power  to,  of  appointing  successor  in  firm 353 

appointee  of,  becomes  partner  only  by  his  own  consent 354 

liability  of  estate  of 355 

of  executor  or  trustee  of 356 

fraud  of,  in  inducing  partnership  is  cause  of  dissolution      .     .     .      357  n. 
dissolution  for  misconduct  of 358 


628  INDEX. 

Section 
PARTNERS—  Continued. 

dissolution  for  inability  of,  to  fulfil  agreements 360 

for  insanity  of 361,  362,  363 

effect  upon,  of  bankruptcy  of  copartner 370,  et  seq. 

continuing  business  on  bankruptcy  of  copartner 373 

effect  of  discharge  in  bankruptcy  of  copartner  upon  liability  of   .     .     376 

power  of,  over  assets  upon  bankruptcy  of  copartner 377 

cannot  prove  against  estate  of  bankrupt  copartner     ....       378,  379 
except  in  case  of  fraud 380 

each  partner  is  liable  for  all  the  debts  of  the  firm ;  but  as  a  principal 
debtor  for  his  own  share,  and  as  surety  for  the  other  partners 
for  the  remainder 378 

where  one  is  defrauded  into  advancing  money  to  become  a,  and  the 

fraudulent  party  becomes  a  bankrupt 380 

effect  of  bankruptcy  of  firm  on  separate  estate  of 385 

distribution  of  estate  of,  between  firm  and  private  creditors     383,  383  n., 

384,  384  n. 

■who  are  creditors  of,  and  who  of  partnership 387 

assumption  by  firm  of  debt  of 388,  389 

distinction  between  assets  of,  and  of  firm 392-397 

rights  of,  to  property  owned  in  his  own  right  cannot  be  affected  by 
allowing  the  firm  to  employ  it  on  terms  satisfactory  to  them 
and  in  perfect  good  faith 393 

a  transfer  of  property  from  the  partnership  to  a  partner  in  good 

faith,  and  without  any  expectation  of  bankruptcy,  will  be  valid     393 

where  the  several,  in    a   firm,  appear  before  the  world  as  distinct 

traders 398,  401 

cannot  compete  in  bankruptcy  with  creditors  of  firm      .     .     .  399,  399  n. 

creditors  of,  cannot  compete  in  bankruptcy  with  firm  creditors  with 

regard  to  firm  assets 399 

have  precedence  in  distribution  of  firm  assets  over  creditors  of  co- 
partner     402 

lien  of,  on  the  partnership  effects,  for  the  balance  due  them,  enforced 

by  a  court  of  equity 402  n. 

Interest  of,  in  a  foreign  enterprise  not  lost  by  the  seizure  of  the  goods, 

provided  any  part  of  them  be  restored 403 

where  resident  in  different  countries  between  which  w^ar  breaks  out 
and  the  firm  property  seized  by  one  country  and  compensation 
made  to  the  partner  resident  there 403 

right  of,  to  an  account 406 

right  to  an  account  is  a  legal  one 406,  406  n. 

may  transfer  his  right  to  an  account  to  his  representatives       .     .     .     406 

duty  of,  to  keep  accurate  accounts  of  all  the  business  of  the  firm 

under  their  charge 407 

an  action  will  lie  between,  where  a  balance  of  accounts  is  struck      407  n. 

cannot  sue  each  other  at  law  for  any  business  or  undertaking  of  the 

partnership 407  n. 

but  may  sue  each  other  at  law  for  a  breach  of  any  distinct  engage- 
ment in  the  partnership  agreement 407  n. 

trustees  in  a  commercial  "  trust  "  are 446 

effect  of  death  of.  {See  Death  of  Partner,  Survivixg  Part- 
ner.) 


INDEX.  629 

Section 
VART'SERS—  Continued. 

general.     (See  General  Partner.) 
incoming.     (See  Incoming  Partner.) 
power  of.     (See  Power  of  Partner.) 
retiring.     (See  Retiring  Partner.) 
special.     (See  Special  Partner.) 
PARTNERSHIP, 

definition  of ' 1 

law  of,  a  system  by  itself 2 

origin  of  law  of 2 

known  to  Romans 2 

Roman  law  of,  how  far  similar  to  common  law 2 

mercantile  idea  of ■  3 

how  far  recognized  as  an  entity 4 

relation  between  partners  and 5 

agreement  to  form 6 

to  begin  in  futuro Q  n. 

may  be  made  by  agent 6 

none,  until  some  joint  transaction  has  been  undertaken       ....  6 

sealed  agreement,  whether  necessary 6 

written  agreement,  whether  necessary 6 

maj'  be  proved  by  parol,  when 6 

existence  of,  a  question  of  fact;  what  it  is,  a  question  of  law  ...  0 

agreement  for,  whether  within  Statute  of  Frauds 6 

to  deal  in  land,  whether  written  agreement  necessary  for    ....  6 
to  continue  for  more  than  a  year,  whether  written  agreement  neces- 
sary for 6  n. 

effect  and  construction  of  agreement  for 6 

may  grow  out  of  transactions  or  relations  between  parties,  without 

express  agreement 8 

must  be  formed  for  a  legal  purpose 8 

distinction  between  a  partnership  for  objects  mala  in  se,  and  one  for 

objects  only  7?(a/« /)ro^«6j7a  .     .     .     .   ' 8  n. 

contract  of,  must  be  voluntary 9 

no  person  can  be  introduced  into  a  firm  without  the  consent  of  all 

the  members  of  it 9 

consent  may  be  implied,  or  inferred  from  acts 9 

where  articles  of  copartnership  provide  that  a  copartner  may  transfer 
his  interest  in  the  firm  to  a  third  person,  who  by  force  of  the 

transfer  becomes  a  copartner 9 

an  agreement  to  admit  a  new  member  into  a  partnership  does  not  in- 
vest him  with  the  character  of  a  partner 9 

contract  of,  avoided  and  annulled  by  fraud  or  coercion 10 

contract  of,  must  be  made  by  competent  parties 11 

■when  it  begins,  usually  determined  by  contract  of 12 

presumption  of  law  that  it  began  when  the  written  articles  were 

executed 12 

express  stipulation,  in  contract  of  partnership,  that  it  should  have  a 
retrospective  effect,  could  not  make  th-  m  partners  as  to  third 

persons,  except  from  date 12 

not  created  until  all  the  conditions  of  the  agreement  are  fulfilled      .  12 

when  it  begins,  where  implied  by  law  from  certain  transactions  .     .  12 


630  INDEX. 

Section 
PARTNERSHIP  —  Continued. 

jurisdiction  of  actions  concerning 13 

may  be  formed  by  whom 14 

is  dissolved  by  marriage,  when 20 

by  war,  when 22 

may  itself  enter  into  another  partnership 24 

purposes  and  kinds  of 37 

may  be  for  buying  and  selling  land 38,  67 

for  buying  and  selling  land,  affected  by  the  Statute  of  Frauds      .     .       38 
(See  Statute  of  Frauds.) 

to  exercise  an  office 39 

general  and  special 40 

limited 40 

an  instance  can  seldom  if  ever  occur  of  universal  partnership       .     .       40 
the  rights  and  obligations  of  partnership  exist  only  so  far  as  the 

partnership  extends 40 

no  distinct  dividing  line  between  general  and  special 40 

test  of 41,  e<  seq. 

sharing  profits  once  regarded  as  test  of 42,  43,  44,  49-52 

is  an  entity 1,  46,  184,  247 

and  agency,  difference  between 46 

inter  se  and  as  to  third  persons,  distinction  between 48 

right  to  account  as  test  of 53 

intention  true  test  of 46,  54,  56 

inferred  from  control  of  business 55 

joint  signature  of  note  no  evidence  of 55  n. 

requisites  of 58,  59 

must  be  for  purpose  of  realizing  profit 60,  61 

may  exist  for  other  purposes  than  buying  and  selling;  as  professional 

partnerships 62 

where  a  product  arises  from  a  contribution  to  the  common  stock  of 

different  things  by  the  different  partners 63 

where  such  a  product  is  to  be  divided  between  them  and  not  for  sale, 

there  is  no  partnership  in  the  product 64 

relations  held  not  to  constitute 64 

typical  form  of 65 

in  a  single  transaction 66 

proof  of 78 

in  several  distinct  firms 79 

non-trading 85 

whether  bound,  where  credit  given  to  single  partner 88 

beginning  of  liability 92 

when  it  begins  with  the  effect  of  casting  upon  the  members  the 

liability  of  partners 92 

where  a  person  purchases  goods  upon  his  own  credit,  and  it  is  after- 
wards discovered   that  they  have  been  applied  to  the  use  of  a 

partnership 92 

where   no    partnership   is   in   contemplation    when    the   goods   are 

obtained 92 

may  have  whatever  name  the  partners  choose  .     . 97 

bound  by  admission  of  partner,  when 126,  128,  129 

by  waiver  of  Statute  of  Limitations  by  partner,  when  .       126,  127 


INDEX.  631 

•Sectiox 
PARTNERSHIP— Con^muet/. 

bound  by  notice  to  partner  or  knowledge  of  partner 129 

of  the  power  to  vary  the  business  of 130 

where  a  partner  enters  into  a  new  branch  of  business  in  the  name  of  ' 

the  firm 130 

bound  on  note  by  signature  in  usual  form 139 

not  liable  for  debt  incurred  before  it  comes  into  existence  ....  142 

every  person  dealing  with,  is  presumed  to  know  the  law  of     .     .     .  160 

agreement  to  form,  sometimes  enforced  in  equity 1G3 

renewal  of 1G5 

where  limited  to  a  certain  time  continues  after  that  time  without 
new  articles,  or  a  formal  renewal  of  the  old  ones,  presumption 
that  old  articles  continued  in  force,  except  as  to  limitation  of 

time 165 

continued   on    old   articles   is   dissolvable    at    the    will    of    either 

partner 165 

how  far  recognized  as  quasi  corporation 184 

cannot  sue  or  be  sned  by  a  partner 184 

action  at  law  upon  agreement  to  enter  into 191  ?i. 

may  sue  third  party  though  the  demand  is  founded  on  tort  of  part- 
ner       203 

bill  for  specific  performance  of  agreement  to  enter  into       .     .  205,  205  7i. 

where  the  fact  of,  is  disputed 225 

has  same  legal  remedy  as  person 229 

how  affected  by  discharge  of  debtor  by  one  partner 230 

effect  on  right  of  action  of  membership  of  alien  in 232 

of  partnership  between  man  and  wife 233 

of  transfer  of  interest  by  one  partner  to  another 234 

suit  against,  by  partner's  indorsee,  on  firm  note 234 

necessary  parties  in  action  by 235 

all  partners  must  join,  though  their  interests   are    transferred   to 

copartners 235 

effect  of  change  in,  upon  guaranty  to  firm 236 

upon  contract  with  firm .  236 

necessary  parties  in  actions  on  covenants 237 

on  negotiable  paper 237 

on  simple  contracts 238 

on  contracts  of  insurance 239 

effect  of  novation  on  obligation  of 240 

remedy  of,  for  tort 241 

damages  recoverable  by,  for  tort 242 

right  of,  to  equitable  relief 243 

illegal,  cannot  maintain  action 243 

appropriation  of  property  of,  to  payment  of  debts 244 

nature  of  interest  of,  in  property 245 

lien  of  creditors  on  property  of 246 

is  owner  of  property 247 

how  far  recognized  as  owner  of  property  at  law 248 

property  of.     (See  Phoperty.) 

suit  by  or  against 249 

may  not  sue  or  be  sued  by  name 249 

except  when  allowed  by  statute 250 


G32  INDEX. 

Section 
PARTNERSHIP  —  Continued. 

place  uf  residence  of 251 

exemption  from  attachment  of  property  of 252 

right  of  creditor  of,  to  proceed  against  partner 253 

of  creditor  of  partner  to  proceed  against 254 

where  a  partner's  interest  in  the  firm  property  has  been  attached 

for  a  private  debt 258 

effect  of  insolvency  of,  upon  proceedings  by  creditor  of  partner   .     .     261 
cannot  hold  the  legal  title  of  real  estate,  but  may  the  equitable 

title 267 

extent  and  duration  of 279 

once  formed  presumed  to  continue 279 

dissolution  of,  how  it  may  take  place 279 

for  term  of  years 280 

for  a  term  conditioned  as  to  length 281 

time  of  dissolution  fixed  by  implication 282 

for  temporary  purpose 283 

for  single  adventure 283 

may  continue  by  express  or  implied  agreenient 283 

dissolution  of,  by  mutual  consent 284,  284  n. 

by  incorporation 285 

effect  of  dissolution  of,  on  rights  of  partners 286 

on  power  of  partners  over  firm  debts 287 

winding  up 288 

power  of  equity  to  settle  affairs  upon  dissolution  of 295 

causes  for  dissolution  of,  by  act  of  law 301,  et  seq. 

dissolved  by  marriage  of  partner  who  is  a  single  woman      ....     302 

at  will  . 306,  306  n. 

continued  beyond  original  term  is  at  will 306 

dissolution  of 306,  et  xeq. 

(See  Dissolution.) 

effect  of  change  in 311,  et  fseq. 

change  of  membership  puts  an  end  to 311,  312 

effect  of  dating  back 340 

dissolved  by  death 342,  343 

unless  otherwise  provided  in  the  articles 343  n. 

dissolution  of,  by  suit 357,  et  aeq. 

may  be  declared  void  from  beginning  because  of  fraud 357 

whether  dissolved  by  insanity  of  partner 361,  362 

where  one  person  is  a  member  of  two  firms,  whether  and  when  one 

firm  can  prove  in  bankruptcy  against  the  other 381 

where  one  firm  is  liable  for  the  joint  debts  of  another,  it  cannot 

prove  against  the  estate  of  that  firm,  in  competition  with  the 

creditors 381 

who  are  creditors  of 387 

assumption  by,  of  debt  of  partner 388,  389 

distinction  between  property  of,  and  of  partners 392,  393 

where  any  person  holds  his  property  out  as  partnership  property      .     395 

whether  debtor  on  note  signed  by  all  partners 398 

upon  dissolution    of,  each  partner  has   a  lien  on  the  partnership 

effects    for    his    indemnity,   and    for    his    proportion    of    the 

surplus 402  n. 


INDEX.  633 

Section 
PARTNERSHIP  —  Continued. 

where  some  of  the  lueiubers  of  a  firm  carry  on  an  entirely  distinct 
business,  and  the  two  firms  deal  witii  each  other,  in  case  of 
bankruptcy  one  may  prove  against  the  other 401 

or  the  creditors  of  either  may  prove  against  its  own  fund    ....     401 

joint-stock  company  is 431 

"  trust "  for  investment  is  not 445 

for  carrying  on  business  is 446 

agreement.     (6'ee  Articles  of  Copartnership.) 

limited.     (5ee  Limited  Pautneuship.) 

real  estate  of.     (6'ee  Real  Estate.) 
PART-OWNERS    OF   SHIPS, 

more  than  ordinary  tenants  in  common,  but  not  so  much  as  partners,       76 
PATENT, 

joint  owners  of,  whether  partners 76 

obtained  by  partner  for  invention  made  in  business  hours  does  not 

inure  to  benefit  of  firm 153  n. 

held  by  partnersliip  is  its  property 182 

term  of  partnership  to  deal  with 283 

PAYMENT, 

effect  of,  to  a  partner  after  dissolution 297 

payment  to  partner  who  is  insolvent,  effect  of 297 

to  the  executor  of  a  deceased  partner 297 

PAYiMENTS   BY   A    FIRM, 

after  the  death  of  a  partner,  when  one  of  the  firm  is  executor  of  the 
deceased,  shall  not  be  considered  as  payments  by  that  partner 
as  executor,  if  they  have  the  effect  of  barring  the  Statute  of 

Limitations 352 

PENALTY, 

for  wrong-doing,  cut  down  to  a  compensation 174 

PERSONAL   PROPERTY   OF    A    PARTNERSHIP. 

{See  Property. OF  Firm.) 
PERSONAL   REPRESENTATIVE.     {See  Executors.) 
PERSONS   UNDER   GUARDIANSHIP, 

spendthrifts 23 

drunkards 23 

when  agreement  for  partnership  avoided  by  temporary  intoxication,  28  n. 

cannot  continue  partners 303 

PHYSICIANS, 

partnerships  of 37,  (52 

firm  of,  is  non-trading 85/1. 

good-will  of  firm  of 181 

PLACE   OF   BUSINESS, 

may  not  be  changed  by  majority  of  partners 149  n. 

PLAINTIFF, 

making  a  bankrupt  partner  who  has  been  discharged  a  defendant 

will  have  judgment  against  all  the  partners  but  him    ....     375 
PLEA  OF  INFANCY, 

effect  of 18 

PLEDGE, 

power  of  partner  to 109,  110  n. 


634  INDEX. 

Section 
FLFA)GE  —  Continued. 

of  suiviviiig  partner Ill  n. 

of  partner's  interest  does  not  operate  as  dissolution 304 

POLICY    OF    INSURANCE.     (See  Insuranck.) 
POLITICAL   COMMITTEE, 

not  partnership 60  n. 

POOLING 444 

statutes  forbidding 454,  455 

POSTMASTER, 

office  of,  cannot  be  held  in  partnership 39 

POWER   OF  A   PARTNER, 

to  transfer  share  in  business 106,  107 

to  transfer  property 108 

to  sell  property  of  firm 108,  108  n. 

to  pledge  or  mortgage  property  of  firm 109,  110  n. 

to  transfer  property  in  payment  of  debts 110 

to  assign  in  trust  for  creditors 110,  110  n. 

to  purchase  for  firm 113,  113  n. 

foundation  of  114 

to  bind  the  firm  in  the  regular  course  of  the  business     .    114  n.,  116,  120 

rests  on  property  as  well  as  agency 114 

general  extent  of 115 

how  qualified 115 

to  make  contracts 115 

to  borrow  and  lend 116 

to  pay  debts 116 

to  receive  payment  of  debts 117 

to  compromise  debts 117 

to  release  a  debt 117 

to  represent  the  firm  in  legal  proceedings 118 

to  release  an  action 118 

to  release  the  acceptor  of  a  bill  from  an  action  on  it  by  the  firm      118  n. 

to  give  time  to  a  debtor 118  n. 

under  the  bankrupt  laws        118 

to  insure 119 

to  accept  guaranty «     ....     119 

to  waive  demand  and  notice  on  firm  note 119 

to  represent  firm  or  stock  owned  by  it  at  meeting  of  corporation  .     .     119 

to  claim  statutory  lien 119 

to  appoint  agent 119 

to  act  as  agent  for  firm 119 

limitation  of,  by  usage 120 

to  submit  to  arbitration 121 

where  such  submission  would  be  held  obligatory 121 

to  affix  Sfal  must  usually  be  under  seal 122,  122  n. 

exists  in  bankruptcy 123 

to  make  sealed  release 123 

to  authorize  an  agent  to  bind  the  firm  by  the  discharge  of  a  debt 

due  it 123  n. 

effect  of  seal  where  contract  valid  without  it 123  n.,  125 

to  confess  judgment 125 


INDEX.  635 

POWER   OF    A    FART-SER  — Continued.  Section 

to  bind  firm  by  represeutatious  or  admissions 126,  128    129 

to  waive  bar  of  Statute  of  Limitations 126,  126  n.   127 

after  dissolution 127  n. 

to  vary  business  of  partnership 130 

exceeding  his  authority  binds  himself,  though  not  the  firm      .     .     .     124 

in  submitting  to  arbitration 121  n. 

in  affixing  seal 124; 

in  confessing  judgment 125 

to  issue  negotiable  paper     (see  Negotiable  Paper)         .     .131,  et  seq. 
POWER   OE    APPOINTMENT, 

when  given  by  the  articles 353 

if  no  agreement  is  made  between  the  partners  to  that  effect,  no  one 

has  any 353 

POWERS   OF    A   MAJORITY, 

provisions  for 171 

where  given  by  articles 171 

■will  not  be  extended  by  implication 171 

confined  to  matters   in  the  conduct  of  partnership  business     .     .     .     171 
acting  under  articles,  in  case  of  difficulties  between  partners  .     .     .     171 
(See  Ma.iokitv.) 
PRELIMINARY   INJUNCTION, 

may  be  obtained  by  partner  against  copartner,  when 217 

PREMIUIM, 

agreement  to  pay,  on  entering  firm 166,  166  n. 

for  admission  into  partnership,  what  is 418 

return  of,  when  ordered 418,  419 

PRESUMPTION, 

of  fraud,  never  absolute 91 

(See  Fraud  ) 
PRESUMPTIONS   OF   LAW, 

where  a  partner  gives  an  obligation  of  the  firm  for  a  debt  due  by  himself       90 
where  a  partner  releases  a  debt  due  to  his  firm,  in  consideration  of 

the  release  of  a  debt  due  by  him 90 

that  a  person  who  is  charged  as  partner,  because  held  out'  as  such, 

was  so  held  out  with  his  own  consent 95 

in  favor  of  an  equality  of  interest  in  case  of  partnership  property  .     .     179 

(See  Partnership  Property.) 
may  be  rebutted  by  evidence  of  modes  of  dealing  from  which  a  con- 
tract may  be  implied 179 

that  an  infant  remaining  in  a  firm  after  full  age  confirms  the  debts 

contracted  during  his  minority 341 

PRINCIPAL.     (See  SurV.ty.) 
PRINTING, 

partnership  in  business  of,  non-trading 85  n. 

PRIVATE  CREDITOR, 

suit,  attachment,  and  levy  of,  against  a  partner  personally  indebted 

to  him 254 

can  secure  the  right  his  debtor  has,  and  only  that 254 

may  attach  the  interest  of  the  debtor  partner  in  the  partnership 

property 255,  256 


636  INDEX. 

Section 
PRIVATE    CREDITOR  —  Continued. 

attachment  of  interest  of  a  partner  by  his  private  creditor,  when 

avoided  in  favor  of  joint  debtor   . 256 

where  he  attaches  a  definite  portion  of  the  partnership  goods  .  •  .  256 
how  far  affected  by  a  private  agreement  between  partners  ....     257 

when  he  may  attach  a  partner's  separate  interest 258 

when  and  how  he  may  levy  on  the  partner's  interest  in  the  copart- 
nership property 258 

manner  of  enforcement  of  his  right 258 

purchaser  at  a  sale  by  execution  of  a  partner's  interest  would  not  be 

a  partner 259 

attachment  of  a  partner's  interest  by  his  separate  creditor  avoided 

by  insolvency  of  the  partnership 261 

in  case  of  a  dormant  partner 261 

may  not  prove  in  bankruptcy,  under  a  joint  commission  for  the  pur- 
pose of  voting  in  the  choice  of  assignees 385 

where  a  firm  is  indebted  to  one  of  the  partners,  his  private  creditor 

may  not  prove  his  debt  against  the  joint  fund 399 

of  a  partner  may  proceed  against  the  joint  estate  at  bankruptcy,  if 

it  is  larger  on  account  of  any  fraudulent  act  against  that  partner     399 
where  joint  creditors  elect  to  proceed  against  the  several  estate  of 
an  ostensible  partner,  and  not  against  the  joint  fund,  private 
creditors  of  tliat  partner  may  proceed  against  the  joint  estate 

for  an  equal  amount 400 

PROFESSIONAL   PARTNERSHIPS 62,  132  «. 

good-will  of  firm 181 

PROFITS, 

sharing  of,  whether  test  of  partnership 42,  43,  44 

distinction  between  gross  and  net  as  test  of  partnership      ....       50 

purpose  of  realizing,  essential  to  partnership 60,  61 

and  loss,  agreement  to  share,  the  typical  form  of  partnership  ...  65 
receipt  of  share  of,  not  necessarily  proof  of  partnership       ....       69 

provisions  in  articles  for  division  of 172 

what  are 172  n. 

in  absence  of  provision,  to  be  equally  divided 172,  172  n. 

right  of  partner  to  sue  copartner  for  share  of 184  n. 

PROMISE, 

where  new,  and  no  new  consideration 89 

PROMISE   OF   INFANTS.     (See  Infants.) 
PROMISSORY   NOTE, 

where  given  in  the  partnership  name  partly  for  a  partnership  debt 

and  partly  for  a  separate  debt  of  one  of  the  partners    .     .     .     .  90  n. 
where  the  language  of,  is,  "I  promise  to  pay,"  but  it  is  signed  by 

the  partnership  name 97  n. 

where  on  its  face  it  purports  to  be  the  act  of  one  partner,  and  made 

to  secure  his  individual  debt 97  n. 

when  made  or  indorsed  fraudulently 133,  137 

joint  and  several  by  all  the  members  of  the  firm,  not  a  partnership 

note    .     .     .     .' 141 

in  case  of  insolvency  signed  by  some  of  the  partners  only,  effect  of  .  141 
if  indorsed  in  blank  may  be  sued  by  any  holder,  in  his  own  name  .  237 
indorsed  by  a  firm  before  dissolution,  but  negotiated  afterwards      .    292 


INDEX.  637 

Sectiov 
rROMISSORY   l^OTE— Continued. 

eifect  of  parol  autliority  to  continuing  partners  to  sell  note  made  to 

the  tirm  before  dissolution 293 

(See  Nkgotiable  Papeu;  Note.) 

PROOF, 

of  partnership 78 

PROPERTY    OF   PARTNERSHIP, 

given    in    payment    of    individual    debt    of    partner    cannot   be 

beld 90,  90«.,136 

unless  authorized  by  firm 90  n.,  91 

or  ratified 91 

may  be  passed  by  ostensible  partner  or  sole  trader 99 

right  of  partner  to  transfer 108 

transferred  fraudulently  by  partner 108 

power  of  partner  to  sell 108,  108  n. 

to  pledge  or  mortgage 109,  110  n. 

to  transfer  in  payment  of  firm  debt 110,  110  n. 

to  assign  in  trust  for  creditors 110,  110  n. 

power  of  surviving  partner  to  transfer Ill 

interest  of  individual  partner  in 112 

each  partner  owns  the  whole,  subject  to  the  rights  of  the  others  ;  and 

no  one  can  commit  burglary  or  larceny  on  the  property  of  the  firm     112 

power  of  partner  to  transfer  individual  interest  in 112 

proportional  interest  of  partners  in 112,  179 

may  be  insured  by  one  partner 119 

partner  cannot  buy  for  his  own  benefit 158  n. 

provisions  of  articles  for  division  of,  between  partners 175 

what  is 177 

in  general,  whatever  belongs  to  firm 177 

personal    .     .     .     .     i 177 

how  distinguished  from  individual  property  of  partners      .     .     .     .     177 

when  property  becomes 177 

consists  of 177 

property  given  or  devised  to  a  partner  does  not  thereby  become  .     .     177 
seized  in  time  of  w^ar,  and  afterwards  one  partner's  share  restored 
to  him ;  the  goods  restored  held  never  to  have  lost  their  charac- 
ter of       177  n. 

where  a  personal  office  is  purchased  with  partnership  funds,  for  the 

benefit  of  the  partnership 177  n. 

title  to,  how  held  ' 1^8 

interest  of  partner  in,  what 178 

division  of.  between  partners 178 

proportional  interests  of  partners  in '-     •  •     179 

insurance  of 180 

the  good-will  of  the  business  is  partnership  property      .     .     .  181,  181  n. 

trade-name,  whether  partnership  property 182,  182  n. 

trade-marks  are  so 182 

lien  of  partner  on 183 

appropriation  of,  to  payment  of  debts 244 

interest  of  partnership  in,  is  true  ownership 245,  247 

theory  of  lien  of  partnership  creditors  on 24() 


638  INDEX. 

Section 
PROPERTY   OF   PARTNERSHIP— Con^mMe(7. 

how  far  ownership  of  partnership  in,  is  recognized  at  law  ....     248 

interest  of  assignee  of  partner  in 248  n. 

division  of,  between  creditors  of  firm  and  of  partners 248 

effect  of  transfer  of,  to  one  partner 248  n. 

exemption  from  attachment  of 2o2 

division  of,  among  the  partners 252 

right  of  creditor  of  partner  against 254 

partners'  interest  in 254 

possession  of,  whether  delivered  upon  sale  on  execution  of  partner's 

interest  in 259  n. 

surviving  partner  lias  right  to  possession  of 344,  344  n. 

interest  of  surviving  partner  in 345  n. 

of  partnership  creditors  in 348 

and  of  partners  distinguished 392 

may  be  distinguished  by  appropriation 393 

fraud  in  such  appropriation 394-397 

can  be  no  division  of,  until  all  the  accounts  of  the  partnership  have 

been  taken 408  n. 

{See  Real  Estate.) 
PROVISIONAL   COMMITTEE, 

a  new  member  of  a,  not  liable  for  services  performed  after  he  joins, 

if  the  order  had  been  given  previously  to  his  joining    .     .     .     336  n. 
PROVISIONS   OF   ARTICLES. 

{See  Articles.) 
PUBLIC    PARTNERS, 

how  different  from  ostensible 27 

PUBLICATION   OF   RECORD    OF  LIMITED   PARTNERSHIPS. 

{See  Limited  Partnership.) 
PURCHASE, 

by  one  partner  in  the  course  of  their  regular  business  binds  the 

firm 113 

PURCHASER, 

of  partner's  interest  does  not  become  a  partner 9 

provision  of  articles  concerning 9 

of  a  partner's  interest  in  a  firm,  under  execution,  not  made  a  partner 

thereby 259 

right  of,  to  call  for  an  account 259 


Q. 

QUASI  PARTNER ; 93 

R. 

RATES   OF   FREIGHT, 

combinations  to  maintain 444 

RATIFICATION, 

by  adult  of  acts  done  while  an  infant 16 

of  act  of  partner  in  affixing  seal  for  firm 122  n.,  123 


INDEX.  639 

Section 
REAL  ESTATE   OF  PARTNERSHIP, 

power  of  partner  to  transfer 108 

may  be  dealt  with  by  partnership 053 

Atuericaii  law  less  conservative  than  English 264 

becomes  partnership  property,  when  and  how        265 

firm  may  deal  in 265  n. 

nature  of  interest  of  partnership  iu 265  n. 

of  partner  in 265  n.,  272  n. 

exemption  of,  from  attachment 265  n. 

legal  title  to,  in  partners 265  n. 

form  of  deed  conveying 265  n. 

if  title  to,  held  by  partner,  it  is  for  firm 265,  265  n. 

what  necessary  to  prove  interest  of  partnership  in     .     .     265  n.,  269,  267 
not  always  material  how  bought,  or  how  conveyed  to  the  partner- 
ship   265 

■will  not  be  presumed  to  belong  to  one  partner 266 

ownership  of,  determined  by  intention  of  the  partners 267 

title  of,  in  law,  cannot  be  held  by  a  partnership 267 

interest  of  partnership  in,  how  regarded  at  law 268 

legal  title  to,  a  question  of  record 269 

no  partner  can  convey  real  estate  not  held  of  record  in  his  name      .     269 

where  devLsed  by  the  legal  holder 269 

as  to  dormant  partners 269 

who  must  convey 269 

interest  of  partneiship  in,  regarded  as  personalty  in  equity     .     .     .     270 

how  far  converted  into  personalty 271,  272,  272  n. 

rule  in  England 271 

to  whom  it  descends  in  England 271 

American  rule 272 

distribution  of,  upon  death  of  partner 272  n. 

dower  in 273 

English  rule,  as  to  dower 273 

American  rule 273,  273  n. 

■where  the  property  passes  out  of  the  partnership  to  a  stranger     .      273  n. 

inheritance  of 27rl,  275 

the  heir  holds  as  trustee  for  the  firm  of  their  creditors 274 

when  it  cannot  be  sold  to  pay  debts  until  the  personal  property  is 

exhausted 272  ?i.,  274 

no  survivorship  in         274  n. 

power  of  surviving  partner  over 274  n. 

conveyed  to   partners   as   tenants   in    common,   and   one   of   them 

dies 274 

lands  conveyed  to  partners  as  joint  tenants 274 

land  devised  to  partners  for  partnership  purposes 275 

right  of  creditors  of  the  firm  to  its  real  estate 276,  276  n. 

personal  estate  first  applied  to  the  payment  of  the  debts     ....     276 

death  of  a  partner  holding  the  firm's  real  estate 276  n. 

right  and  power  of  the  partners  as  to  the  real  estate  of  the  part- 
nership     277 

one  partner  may  not  transfer  the  real  estate  of  the  firm      ....     277 

where  a  partner  sells  his  interest  in,  to  a  stranger 277 

effect  of  deed  of,  by  one  partner 108,  277  n. 


640  INDEX. 

Section 
REAL   ESTATE   OF   PARTNERSHIP— Con^muerf. 

conveyance  of,  to  a  stranger 278 

conveyed  by  the  partner  holding  the  legal  title,  to  a  purchaser  without 

notice,  for  value 278 

is  considered  in  equity  as  part  of  the  partnership  stock,  and  subject 

to  partnership  debts 345  n. 

may  not  be  claimed  either  by  the  widovp  or  heirs  of  a  deceased  part- 
ner until  the  claims  of  the  firm  creditors  are  satisfied  .     .     .      3i5  n. 
surviving  partners  have  an  equitable  lien  on,  for  the  debts  of  the 

firm 345  n. 

where  purchased  by  the  general  partners  of  a  limited  partnership     .     429 
RECEIVER, 

may  be  had  by  partner,  when 218,  218  n. 

a  decree  for,  its  effect 218 

appointment  of,  ousts  a  partner  from  all  control    . 218 

appointment  of,  when  and  why  made 218 

exclusive  possession  by  one  partner  is  not  of  itself  sufficient  cause  for 

appointment  of 218 

■who  will  be  appointed 218  n. 

after  dissolution 219 

where  the   party  applying  for,  has  the   property  in  his  own  pos- 
session      219  n. 

appointment  of,  temporary 220 

where  appointed  to  wind  up  a  business 220 

application  for,  addressed  to  the  discretion  of  the  court 221 

may  be  appointed,  although  there  is  only  one  acting  partner  .     .     .     221 

who  may  be  appointed 222 

appointment  of  partner  as 222 

may  earn  interest  on  the  money,  if  not  prevented  by  the  terms  of 

the  appointment 222 

practice  on  appointment  of 223 

powers  and  duties  of 224 

takes  possession  of  property 224 

whether  authorized  to  sue 224 

the  property  which  a  receiver  takes  into  his  possession  ....      224  n. 

trustee  of  all  the  assets  for  the  firm  creditors 224 

rule  governing  a  receiver 224 

will  not  be  appointed  on   death  of  partner,  where  survivor  is  re- 
sponsible and  acts  in  good  faith 345  n. 

appointment  of,  in  certain  cases,  operates  a  dissolution 368 

RELEASE, 

of  debt  to  one  partner  discharges  the  partnership,  when      .     .     .     .     116 
where  two  are  arrested  on  a  joint  ca.  sa.,  and  the  plaintiff's  discharge 

of  one  of  them  is  a  discharge  of  the  other 116  n. 

of  one  partner  of  a  joint  debt,  to  have  the  effect  of  discharging  the 

firm,  musi.  be  under  seal 116 

to  one  partner  may  be  accompanied  with  such  conditions  as  to  pre- 
vent its  discharging  the  firm    116  n. 

partner  may  make,  under  seal 123 

by  partner  in  fraud  of  firm,  void 136 

where  given  by  one  partner  for  a  consideration  which  is  known  to 

inure  only  to  his  own  benefit 136 


INDEX.  641 

Section 

RELEASE  —  Continued. 

of  a  debt  of  the  firm  by  one  partner 230 

where  an  assignment  of  property  has  been  made 234  n. 

RELIGIOUS   SOCIETY, 

not  a  partnership 60  n. 

REMAINING  PARTNER.     (See  Retiring  Partner.) 

REMEDIES    BY    PARTNERS    AGAINST    THIRD    PARTIES, 

Ch.  IX 229 

for  breach  of  contract 229 

two  firms  having  a  common  partner 231 

where  a  party  has  a  defence  against  one  of  the  partners      ....     230 
where  a  partner  releasing  a  debt  is  a  dormant  partner 230 

REMEDIES    OF    THIRD    PERSONS    AGAINST   THE   PART- 
NERSHIP  AND   AGAINST   PARTNERS,  Ch.  X     ...     244 

RENEWAL   OF   PARTNERSHIP 165 

by  tacit  continuation  of  business 165 

when  a  tacit  renewal,  it  is  dissolvable  at  will  of  either  partner     .     .     165 

(See  Partnership.) 
renewal  of  limitation  of  time  seldom  presumed  from  acts    ....     165 
of  limited  partnership 427,  427  n. 

RENT, 

share  of  profits  in  lieu  of 71 

REPRESENTATIONS   OF   PARTNER, 

competent  to  prove  him  such 78 

not  competent  to  prove  another  his  copartner 78 

effect  of 126, 129 

after  dissolution 128 

REPUTATION, 

whether  admissible  to  prove  partnership 78 

REPUTED   OWNERSHIP, 

statute  of 395 

REQUISITES, 

of  partnership 58,  59 

RESIDENCE, 

of  firm,  what  is 251 

RESTRAINT  OF   TRADE, 

illegality  of  combinations  for 451, 452 

RETIRING  PARTNER, 

one  leaving  an  existing  firm 32 

in  law,  retirement  of  any  partner  terminates  a  partnership     ...       32 

how  retirement  affects  the  liability  of 313 

neither  loses  property  nor  relieves  himself  from  liability     ....     313 
if  he  pays  more  than  his  share  of  the  old  debts,  may  have  contribu- 
tion from  his  partners 313 

where  he  "  sells  out  " 314 

may  set  up  the  some  business  in  the  immediate  vicinity,  in  the 

absence  of  any  agreement        181,  182,  314 

effect  of  promise  of,  not  to  carry  on  the  same  business 314 

how  he  may  terminate  his  liability  for  the  partnership  debts  .     .     .     315 

notice  of  retirement  must  be  given  by 315 

manner  of  giving  notice  of  retirement 316,  321 

41 


642  INDEX. 

Section 
RETIRING   PARTNER  —  Continued. 

difference  in  liability  of,  as  to  old  and  new  customers     .     .     .  317,  317  n. 

rule  as  to  notice  of  retirement 317 

^vhere  knowledge  is  equivalent  to  notice 318 

consenting  to  a  use  of  his  name  by  the  old  partners 318 

where  a  dormant  partner 320 

notice  of  retirement  by,  must  be  reasonable 321 

what  circumstances  dispense  with 322 

must  be  given  to  whom 323 

by  notoriety 322 

sufficient  lapse  of  time  may  supply  want  of  notice 322 

cases  in  which  a  jury  might  infer  knowledge  of  the  retirement    .     .  322 
whether  discharged  from  liability  by  co-partner's  agreement  to  pay 

debts 324 

right  of  action  against  remaining  partners  for  breach  of  contract  to 

pay  the  debts 324 

when  discharged  by  creditors 325,  326 

agreement  between  him  and  those  who  remain,  of  no  effect  as  to 

creditors 324 

should  be  included  in  any  action  against  the  firm,  for  a  debt  con- 
tracted while  he  was  a  partner 324 

execution  against  the  firm  may  be  satisfied  from  property  of  .     .     .  324 

where  held  only  as  surety  for  the  firm  debt 327 

where  a  creditor  retains  the  old  securities  against  the  firm      .     .     .  327 

where  a  creditor  expressly  retains  his  rights  against 327 

the  creditors  receiving  interest  from  the  new  firm  will  not  neces- 
sarily discharge , 328 

facts  from  which  a  jury  might  find  an  implied  assent  to  discharge  of  328 
liability  of,  for  trust  money  used  in  the  partnership  by  one  partner, 

with  the  knowledge  of  all 329 

when  discharged  by  appropriation  of  payment 330 

when  a  partner  puts  into  the  firm  the  money  of  a  stranger,  this  does 

not  make  the  stranger  a  partner 329 

liability  of,  for  existing  debts 331 

not  liable  for  debts  created  after  his  retirement 331 

when  money  is  paid  after  his  retirement,  right  of  the  new  firm  to 

appropriate  it 331 

not  bound  by  an  appropriation  of  payment,  fraudulent  or  injurious 

as  to  him = 331 

where  the  new  firm,  for  adequate  business  causes,  appropriated  the 

funds  of  the  old  firm  to  the  payment  of  new  debts 331 

when  permitted  to  prove  his  claim  against  a  bankrupt  partner    .     .  379 
where  he  has  a  covenant  with  the  remaining  partner  to  pay  all  the 
debts,  and  the  remaining  partner  becoming  bankrupt,  he  pays 

them,  may  prove  them  against  the  bankrupt's  estate    ....  380 
who  leaves  his  property  in  the  possession  or  at  the  disposal  of  the 

firm,  liability  of 397 

must  give  notice  of  his  retirement,  and  of  the  purposes  and  limita- 
tions under  which  he  leaves  his  property  in  the  firm    ....  397 
leaving  some  of  his  property  with  the  firm,  and  giving  notice  that 
the  property  so  left  is  his,  and  not  left  for  the  firm  to  obtain 
credit  on,  may  protect  it  from  future  creditors 397 


INDEX.  643 

Section 

RIGHTS  OF  PARTNER, 

to  choice  of  copartner 106 

to  property I77 

ROMAN   LAW   OF   PARTNERSHIP o 

partnership  recognized  as  entity  by 4 

power  of  partner  to  dissolve  partnership  by 307 


S. 
SAILOR, 

not  partner  because  of  sharing  profits  of  voyage ^      69 

SALARY, 

partner  may  sue  copartner  at  law  on  agreement  to  pay 191 

SALE, 

of  partner's  interest,  effect  of 9 

provision  of  articles  concerning 9 

on  execution  of  one  partner's  interest 304 

secret,  unaccompanied  by  possession,  is  prima  facie  fraudulent  and 

void  as  to  creditors  of  the  firm 395,  396  n. 

of  the  effect,  in  a  bankruptcy 405 

where  only  a  part  of  the  partners  are  bankrupt,  the  assignees  have 

no  right  to  sell 405 

but  the  court  will  decree  a,  if  the  assignees  request  it  for  a  good 

cause 405 

may  be  decreed  as  a  preliminary  proceeding,  or  means  of  making 

account 420 

(See  Assigning  and  Transferring  Property.) 
SALE    OF    PARTNERSHIP   PROPERTY. 

(See  Dissolution.) 
SCOPE  OF  BUSINESS, 

partner  acting  within,  binds  firm 85,  85  n. 

apparent 85  n. 

act  beyond,  does  not  bind  firm 86 

SEAL, 

whether  necessary  on  partnership  agreement 6 

power  of  partner  to  affix 122,  123,  124,  125 

belongs  to  the  common  law,  while  partnership  belongs  to  the  law- 
merchant     123 

when  regarded  by  courts  as  surplusage 123 

liability  of  partner  who  affixes 124 

SECRET  PARTNERS, 

who  are 28 

the  word  "  Co."  not  necessary  to  bind  all  the  partners 28 

why  liable 28 

where  announced  to  a  customer,  without  his  own  consent  ....       28 

where  he  permits  himself  to  be  made  known 28 

liable  upon  all  the  acting  partner's  contracts,  made  within  the  scope 

of  the  partnership  business 80,  81 

(See  Dormant  Partner.) 


644  INDEX. 

Section 
SECURED  CREDITORS, 

proof  in  bankruptcy  by 386 

SECURITIES, 

"  trusts  "  to  invest  in 440,  445 

SECURITY, 

several  security  of  one  partner,  accepted  by  a  creditor  holding  the 

joint  security  of  the  firm,  does  not  discharge  the  firm  .     ...       89 
where  a  partner  disposes  of  security  belonging  to  the  firm,  for  his 

own  debt 136 

SELL, 

power  of  partner  to 108 

SELLER, 

of  goods  to  one  who  orders  them  sent  to  another,  who  is  in  fact  his 

partner 88 

{See  Partners.) 

SEPARATE  CREDITOR.     {See  Private  Creditor.) 
SERVANT, 

not  partner  because  of  sharing  profits 69 

SERVICE   OF   PROCESS, 

against  firm,  how  made 118 

SET-OFF, 

of  partner's  debt  against  claim  of  partnership  not  allowed  ....     262 
except  by  assent  of  partners 262 

of  partnership  debt  against  claim  of  partner 262 

except  when  reduced  to  judgment 262 

SETTLED   ACCOUNT.     {See  Account  Stated.) 
SETTLEMENT   BETWEEN   PARTNERS. 

{See  Account  Stated.) 
SETTLING   PARTNER, 

power  or 289,  289  n. 

{See  Liquidating  Partner.) 
SEVERAL   CREDITORS.     {See  Creditors  of  Partner.) 
SEVERAL  PROPERTY.     {See  Property  of  Partnership.) 
SHARE, 

in  partnership,  transfer  of " .     .     .     .     107 

in  joint  stock  company 107 

{See  Joint  Stock  Company.) 
SHAREHOLDER.     {See  Joint  Stock  Company.) 
SHARES, 

agreement  to  cultivate  farm  on,  not  partnership 61  n. 

SHERIFF, 

office  of,  cannot  be  held  in  partnership 39  n. 

SHIPBROKERS, 

partnership  of 37  w. 

SHIPS, 

partnership  of  owners  of 37  n. 

joint  owners  of,  whether  partners 76 

SIGNATURE.     {See  Partners,  and  Power  of  Partners.) 
SILENT    PARTNER, 

is  one  who  takes  no  active  part  in  the  business  of  the  firm      ...       30 

whether  his  name  be  made  known  as  a  partner  or  not 30 


INDEX.  .  645 

Section 
SKILL.    {See  Partkkrship  and  Partnership  Property.) 

SLEEPING   PARTNER, 

what  is 31 

SMUGGLING, 

partnership  for,  illegal 8 

SOCIAL   CLUBS, 

not  partnerships 60 

SOLVENT   PARTNERS, 

effect  of  bankruptcy  of  a  partner  upon 370 

hold  the  effects  and  property  in  somewhat  the  same  way  that  surviv- 
ing partners  do 370 

cannot  get  the  firm  property  out  of  the  hands  and  possession  of  the 
assignees  of  the  bankrupt,  the  right  to  possession  being  the 
same 370 

continuing  the  business  without  winding  up  the  concern,  do  so  at 

their  own  peril 373 

have  possession  of,  and  full  power  over,  the  partnership  effects    .     .     377 

hold  the  effects  of  the  firm  as  trustees  for  all  interested       ....     377 

committing  actual  or  constructive  fraud,  liable  in  damages,  or  it  may 

be  avoided  by  those  whom  it  injures 377 

rights  of,  against  the  estate  of  a  bankrupt  partner 378 

cannot  prove  against  the  joint-fund  in  competition  with  joint-credi- 
tors, but  ma}'  with  several  creditors 399,  .399  n.,  402 

when  rights  of,  against  their  insolvent  partners  are  prior  to  the  sev- 
eral creditors  of  the  insolvent 402 

cannot  resist  a  bill  by  the  assignees  of  the  bankrupt  for  a  share  in 
the  profits  of  a  subsequent  trading,  on  the  ground  that  the  as- 
signees did  not  require  an  immediate  settlement 404 

SPECIAL   PARTNER, 

definition  of 35 

need  not  give  notice  of  withdrawal 320  n. 

may  examine  accounts 423 

name  of,  must  be  included  in  certificate 424 

liability  of,  if  certificate  is  defective 424 

must  see  that  all  the  requirements  of  the  statutes  respecting  limited 

partnerships  are  complied  with 424 

if  he  withdraw  any  part  of  the  capital,  and  the  firm  becomes  in- 
solvent, he  is  liable  to  the  creditors  for  the  amount  so  with- 
drawn, with  interest 425 

where  the  general  partner  withdraws  some  of  the  capital,  without  the 

consent  or  knowledge  of  the 425 

if  his  name  is  used  in  any  contract  with  his  consent,  or  if  he  take  an 
active  part  in  the  formation  of  any  contract,  he  is  liable  as  a 
general  partner 426 

when  and  in  what  manner  he  becomes  liable  as  a  general  partner     427  n. 

liable  as  general  partner  in  all  things,  except  those  in  which   the 

statute  expressly  limits  his  liability 427 

bound,  after  dissolution,  for  the  future  debts  of  the  firm,  unless 
notice  is  given,  or  it  ceases  by  limitation  of  time  or  act  of  the 
law 428 

notice  should  be  given,  in  case  of  death  or  bankruptcy 428 


646  INDEX. 

Section 
SPECIAL   PARTNER— Conf/nuec?. 

if  he  make  himself  generally  liable,  after  dissolution,  to  the  holders 
of  notes,  the  holders  cannot  come  in  and  claim  the  joint  assets 

equally  with  the  j)revious  creditors  of  the  firm 428 

holders  of  such  notes  should  join  all  the  partners  in  a  suit  ....     428 
not  liable  as  general  partner  because  real  estate  had  been  purchased 
by  the  general  partners,  and  paid  for  by  the  firm,  and  the  title 

taken  in  the  names  of  all  the  partners 429 

liable  as  general  partner,  where  there  was  a  mistake  made  in  the 

publication  of  a  certificate 429 

(See  Limited  Partnership.) 
SPECIAL   PARTNERSHIP, 

relates  only  to  a  single  transaction,  or  the  use  of  one  thing      ...       40 
where  a  note  or  bill  is  signed  or  indorsed  by  two  or  more  persons     .       40 
SPECIFIC   PERFORMANCE, 

of  articles  of  co-partnership 162,  205 

of  agreement  to  form  partnership 163,  205  n. 

(See  Equity.) 
STAGE-DRIVING, 

partnerships  for 37 

STANDARD  OIL  TRUST 443,  446 

STATES, 

are  foreign  to  each  other  in  respect  to  bankrupt  laws 374 

STATUTE, 

28th  &  29th  Vic.  ch.86,  provides  that  lending  money  to  a  firm,  the 
lender  to  receive  a  certain  share  in  the  profits,  does  not  make  him 

liable  as  a  partner 45 

of  Kentucky,  promissory  notes  have  all  the  legal  effect  of  bonds  under 

seal 123  n. 

9  Geo.  4,  ch.  14,  on  limitations 126  n. 

of  New  Hampshire,  concerning  actions  between  copartners     .     .     .     196 
of  Pennsylvania,  April  14,  1838,  concerning  abatement  of  actions 

against  partners 200  n. 

of  reputed  ownership 395 

STATUTE   OF   FRAUDS, 

whether  partnersliip  agreement  is  within 6 

STATUTE   OF   LLMITATIONS, 

power  of  partner  to  waive 126,  127 

in  actions  between  partners 228,  228  n. 

STATUTES, 

forbidding  certain  partnerships 8  n. 

allowing  married  women  to  do  business 20 

allowing  actions  in  firm  name 250 

permitting  limited  partnerships 421,  422 

foi'bidding  "  trusts  " 454,  455 

STEALING, 

partnership  for,  illegal 8 

STIPULATIONS, 

as  to  retrospective  effect  of  contract  of  partnership   .     .  ,     .     .       12 

between  partners,  how  far  they  affect  third  parties 84 

{See  Partner.) 


INDEX.  647 

Section 
STIPULATIONS  —  Continued. 

between  partners  exempting  some  of  the  firm  from  liability  of,  no 

effect  as  to  creditors 87 

between  partners,  violation  by  one,  effect  of 87 

STOCK.     {See  Partnership  Property.) 
STOCKHOLDER, 

in  defective  corporation,  whether  partner 56,  57 

in  joint  stock  company  is  liable  as  partner 434 

has  not  as  great  power  as  general  partner 434  n. 

may  transfer  his  interest 435 

STOCKS, 

"  trusts  "  to  invest  in 440,445 

STRANGER.     {See  Dilectus  Personarum,  and  Partners.) 
STYLE   OF   FIRM.     {See  Firm-Name.) 
SUBMISSION.     {See  Arbitration.) 
SUB-PARTNER, 

what  is 36,  106  71. 

right  of,  to  demand  account 406 

SUB-PARTNERSHIP, 

duration  and  eifect  of 282 

SUCCESSOR, 

power  of  deceased  partner  to  appoint 353 

liability  of  one  appointed  by  deceased  partner  as 354,  356 

SUCxAR   TRUST,  443 

SUIT, 

arising  out  of  partnership,  jurisdiction  of 13 

nominal  partner  as  party  to 96 

against  partners  for  tort  is  joint  and  several 105 

{See  Action;  Equity.) 
SURCHARGE, 

what  it  is 411  n. 

SURETY, 

no   partner  may  become  surety  for  a  debt,  and  thereby  bind  the 

firm 144 

SURVIVING   PARTNER, 

power  of,  to  transfer  property  in  payment  of  debts Ill 

injunction  against  or  for 215 

power  of,  over  partnership  real  estate 274  n. 

powers  and  interests  of 344,  344  n. 

at  the  death  of  a  partner,  has  an  exclusive  right  of  possession  and 
management  of  the  firm  property  and  business  for  closing  the 
same 344,  344  n. 

if  the  authority  of,  for  winding  up  the  concern,  be  unduly  exer- 
cised, the  remedy  is  by  applying  to  a  court  of  equity  for  the 
appointment  of  a  receiver 344  n. 

where  the  articles  provide  what  shall  be  done  if  a  partner  dies     .     .     344 

has  a  right  to  collect  all  debts  due  to  the  firm,   and  to  sell  the 

property  of  the  firm 345,  345  n. 

rights  of,  to  possession  of  the  partnership  property 344  n. 

has  a  lien  on  the  real  estate  of  the  firm  for  indemnity  against  firm 

debts 345  n. 


648  INDEX. 

Section 
SURVIVING   PARTNER  —  Continued. 

is  from  the  death  of  a  partner,  trustee  for  all  concerned  in  the 

partnership 345 

may  not  sell  to  nor  buy  the  property  of  the  firm  himself  ....  345 
power  of,  to  arrange  and  settle  all  the  debts  of  the  firm  ....  345 
equity  will  interfere,  in  cases  of  negligence  or  gross  mistake  by  .     .     345 

interest  of,  in  partnership  property 345  n. 

set-off  of  individual  debt  in  action  by 345  n. 

of  firm  debt  in  action  by 345  n. 

accountable  to  estate  of  deceased  partner  for  fraud 345  n. 

for  using  assets 346  n. 

may  only  claim  his  share  of  the  firm  property,  after  the  creditors 

have  all  been  satisfied 345 

is  not  bound  to  continue  the  business 346 

equity  will  restrain  the,  from  continuing  busiueos  under  the  ci'edit, 

and  risking  the  effects  of  the  old  firm 346 

liability  of,   to  estate  of    deceased   when    business  is   continued    346, 

346  n.,  355 
where  the  surviving  partners  continue  business  under  the  credit  and 

risk  the  effects  of  the  old  firm,  they  will  be  bound  to  account 

for  the  profit  as  belonging  to  the  firm 346 

if  they  incur  a  loss,  they  are  charged  with  interest  on  the  funds 

they  use 346 

but  if  they  make  a  profit,  which  is  credited  to  the  firm,  they  may 

be  allowed  some  compensation  for  their  services 346 

do   not  bear  more   than  their   share  of   the   losses  resulting   after 

the   death  of    the   deceased   from    transactions    entered   into 

before 346 

may  be  allowed  for  their   time  and  expenses  under  certain  cir- 
cumstances   346 

may  retain  the  good-will  of  the  firm,  without  payment  on  their 

part 181  n,  341 

have  no  right  to  take  the  effects  of  the  firm  at  a  valuation  ....  348 
creditors  of  the  firm  can  bring  their  actions  only  against  ....  349 
actions  to  collect  a  partnership  debt  must  be  brought  in  the  name 

of  the 349 

holding  claims  against  the  deceased  partner  is  treated  like  other 

partners 351 

when  the  deceased  has  made  the  surviving  partner  his  executor  .     .     352 
(See  Equity.) 
SURVIVORSHIP, 

of  title  upon  death  of  partner 344,  345 

of  actions 349 


T. 

TAVERN-KEEPERS, 

firm  of,  is  non-trading 85  n. 

TENANTS  IN   COMMON, 

whether  partners 76 


INDEX.  649 

Section 
TENANTS  IN  COMMON  ~  Continued. 

liability  of  tenant  in  common  to  his  co-tenant  for  the  destruction 

of  the  common  property 226 

land  conveyed  to  partners  as 274 

TERM   OF   PARTNERSHIP 280,  281,  282,  283 

TEST   OF   PARTNERSHIP il,  et  secj. 

right  to  account  is  not 53 

intention  to  form  partnership  is 54 

THEATRE, 

partnership  to  manage,  non-trading 85  n. 

THIRD   PERSONS, 

partners  as  to 80 

TIME, 

when  partnership  begins 12 

TORT, 

partners  liable  for  tort  of    one   partner    in    course    of    business 

100,  et  se<].,  105 
in  order  to  render  partners  liable  for  the  torts  of  each  other,  they 

must  have  been  committed  in  the  partnership  business     .     .     .     100 
where  money,  procured  by  fraud,  becomes  partnership  stock,  the 

firm  not  liable,  without  their  consent  to  the  fraud 102 

no  contribution  for  payment  of  judgment  founded  on    ...     o      198  7i. 
demand  of  the  firm  grounded  on  the  tort  of  a  member  thereof    .     .     203 

between  partners 225 

where  the  torts  are  personal 225 

trover  will  not  lie  by  one  partner  against  his  copartner 226 

remedies  of  partners  against  third  persons  for 241 

instances  of,  in  which  all  the  partners  must  join 241 

against  only  a  part  of  the  members  of  a  firm 241 

damages  recoverable  for,  by  firm 242 

TRADE, 

restraint  of,  illegal 451,  452 

TRADE-MARK, 

is  firm  property 182 

when  right  to  use,  passes  on  sale  of  business 182  n. 

TRADE   NAME, 

of  the  use  and  right  of 182,  182  n. 

false  or  injurious  use  of 182 

(See  Firm  Name.) 
TRANSFER, 

of  interest  in  partnership 106,  107 

of  property  by  partner 108 

of  shares  of  joint-stock  company 107,  432,  435 

where  a  statute  prescribes  certain  forms  for,  they  must  be  com- 
plied with 435  n. 

when  transferee  would  not  be  a  partner,  nor  have  any  claim  against 

the  company  to  become  such 435 

a  transferee  may  require  an  account  and  settlement  so  far  as  to 

ascertain  his  rights  and  the  value  of  his  share 435 

transferee  has  no  right  to  any  particular  thing  in  special,  nor  a 

division  of  the  effects 435 


650  INDEX. 

Section 
TRANSFER  —  Continued. 

when  the  company  might  refuse  to  accept  transferee,  as  a  partner, 
although  the  stockholders  transferred  his  share  agreeably  to  the 

rules  of  the  company 435 

transferee  not   bound  to  become  a  partner,  although  the  company 

were  willing  to  receive  him 435 

{See  Assignment.) 
TRANSFEREE, 

of  interest  of  one  partner  does  not  become  a  partner,  without  the 

consent  of  the  other  partners        lOO,  112 

may  require  an  account  and  settlement lOG  n.,  112 

TRANSFERRING    PROPERTY, 

right  of,  extends  to  choses  in  action 108  n. 

one  partner  may  bind  his  firm  by  assenting  to  the  transfer  of  a 

debt  due  on  account 108  n. 

right  of,   not  affected  by  a  secret   act  of    bankruptcy  previously 

committed  by  another  partner 108  n. 

nor  by  the  fact  that  the  jiroceeds  of  transfer  have  not  come  to  use 

of  the  firm 105  ?i. 

no  difference  as  to  right  of,  between  partnership  for  general  pur- 
poses and  one  for  special  purposes 108  n. 

right  of,  does  not  extend  to  real  estate  of  the  firm 108 

where  done  in  fraud  of  other  partners,  still  valid  as  to  innocent 

transferee 108 

qualifications  of  a  partner's  right  to  transfer  his  interest  in  the 

property  of  the  partnership 112 

where  one  partner  transfers  his  interest  in  a  chose  in  action  to  his 

copartner 231 

TRUST, 

breach  of,  by  partner,  firm  liable  for 104 

where  implied  as  to  holder  of  legal  title  to  real  estate,  in  favor  of  a 

partnership 265,  265  n. 

TRUST   CERTIFICATES, 

position  of  holders  of 445,  446,  447 

transfer  of „ 447 

TRUSTS,  COMMERCIAL 437 

function  of 438 

in  form  of  corporation 439 

for  investment 440 

to  purchase  and  improve  land 440 

car  trusts        441 

voting  trusts        442 

to  carry  on  business 443 

legal  nature  of 445 

advantages  and  disadvantages  of 448 

legality  of 449 

whether  corporations  can  form 450 

affecting  necessaries  of  life 452 

effect  of  declaring,  illegal 453 

statutes  affecting 454,  455 

TRUSTEE, 

office  of,  cannot  be  held  in  partnership 39 


INDEX.  651 

Section 
TRUSTEE  —  Continued.  ^ 

where  a  partner  is,  and  uses  the  trust  money,  with  the  consent  of 

the  firm,  in  the  business 104 

where  one  trustee  forged  the  names  of  his  co-trustees  to  a  power 

authorizing  his  copartners  to  sell,  firm  liable 103 

where  one  of  a  firm,  a  trustee,  with  the  knowledge  of  the  other 

partners,  applies  the  trust  fund  to  the  use  of  the  partnership, 

firm  liable 104 

if  trust  money  be  put  into  trade  without  authority,  the  cestui  que  trust 

may  either  take  a  share  of  the  profits  or  the  interest    .     .     .      104  n. 

how  far  partners  are 158 

surviving  partners  are,  for  all  parties  in  any  way  interested  in  the 

partnership 345 

surviving  partners  as,  cannot  sell  to,  nor  buy  property  of,  the  firm 

themselves 345 

of  deceased  partner,  when  liable  personally  as  partner 356 

of  commercial  "  trust  "  is  partner 446 

(See  Executors.) 
TRUSTEE  PROCESS.     (See  Garxishmext.) 


U. 

UNIVERSAL  PARTNERSHIP, 

what  is 40,  40  n. 

strictly,  can  be  none 153 

USAGE   OF   TRADE, 

partner's  authority  limited  by 85,  85  n. 

USURY, 

receipt  of,  does  not  make  creditor  partner 70 

when  principal  is  at  hazard,  there  can  be  none 70,  n. 

receipt  of,  by  one  partner,  binds  firm,  when 105 


V. 

VALUATION, 

taking  share  at 348 

(^ee  Bankruptcy  and  Surviving  Partner.) 
VESSELS.     (See  Ships.) 
VOLUNTARY   ASSIGNMENT.      {See   Assignment   for    Benefit 

OF  Creditors.) 
VOLUNTARY   ASSOCIATIONS, 

are  not  partnerships 60 

VOTING   TRUSTS 442 


W. 

WAGES.     (See  Partners.) 

WAIVER, 

courts  of  equity  sometimes  imply  from  the  facts 164 

of  provisions  in  the  articles 164 


652  INDEX. 

Section 
WAR, 

effect  of 22 

dissolves  partnership  between  citizens  of  hostile  countries  ....       22 
effect  of,  on  right  of  partnership  containing  alien  enemy  to  sue  .     .     232 
{See  Dissolution  and  Alien.) 
WARRANTY, 

by  a  partner,  effect  of 144 

WIDOW.    (See  Real  Estate.) 
WINDING   UP, 

the  concern  by  one  partner 287 

in  absence  of  agreement 288 

power  of  liquidating  partner  to  do  all  acts  necessary  for    .     .    294 
WITNESS.    (See  Evidence.) 
WRITING, 

not  necessary  to  constitute  a  partnership 6 

(See  Partnership  and  Articles.) 


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